Small and Rural Hospitals and IRS 990 Schedule H: AHA Teleconference Nov 5, 2008

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1 Small and Rural Hospitals and IRS 990 Schedule H: AHA Teleconference Nov 5, 2008 Douglas W. Lyon, CPA President User enter on your keyboard, or click your left mouse button to move through the screens 1

2 The New Community Benefit Inventory of Social Accountability Background and Context 2

3 Background and Context 990H will push interest in Community Benefit to virtually all hospitals (all who file a 990, for sure) 3

4 Background and Context Hospital staffs will quickly embrace a team effort / team approach for compelling reasons 4

5 What Qualifies (Counts) as a Community Benefit? Charity Care Losses on Certain Public Programs Hundreds of Community Benefit programs and services 5

6 Implementing a Community Benefit Inventory Program at Your Hospital 6

7 Introduction You re required to do a 990 Schedule H now but it s not so bad! 7

8 Background Community Benefit tracking and reporting has never been mandatory.until this year with the IRS Schedule H. Many hospitals have tracked and reported Community Benefit, even though it was not mandated. Over 1,300 that we re totally sure of, they use our CBISA Online software as their tool. Probably another 1,000 use a combination of excel, access or other tools. 8

Many hospitals have tracked and reported Community Benefit, even though it was not mandated.

9 Background Half of our country s not for profit hospitals have been tracking it already The rest, including CAHs and other rural hospitals, now will be joining the group 9

10 CBISA Software Gives hospitals flexibility in how much effort to expend in the tracking and reporting initiative A streamlined process that minimizes the number of staff persons involved and the frequency that these staff persons report their Community Benefit information. 10

process that minimizes the number of staff persons involved and the

11 Where to Start Small and rural hospitals, like Glendive, can effectively track their Community Benefit without significant investment in the process. Here s how Glendive started and how your hospital can start 11

Benefit without significant investment in the

12 Objectives The twin goals of the process are always: 1. Generate information regarding the IRS s 990 Schedule H. 2. Generate information to be used to communicate and educate community members on your community service - a variety of interested parties and constituencies- for a wide variety of reasons. 12

Generate information to be used to communicate and educate community members

13 To Start 1. Identify someone to be overall responsible for the Community Benefit tracking and reporting process Can be from Finance, but not usually Often a manager /director from Community Health, Community Education, Mission or Public Relations Designate him/her as Community Benefit Coordinator ( Champion ; point person) 13

reporting process Can be from Finance, but not usually Often a manager /director

14 To Start 2. Identify someone in Finance to be responsible for: Charity Care Medicaid Other means-tested public programs (such as SCHIP or county welfare) Large Subsidized health programs (such as trauma services or standalone clinics) Large health professions education programs (such as clinical affiliations, School of Nursing, etc.) Finalizing Schedule H for the

public programs (such as SCHIP or county welfare) Large Subsidized health programs (such as

15 To Start 3. Identify major Community Benefit programs that are already in place. Examples include: Self-help Programs Support Groups Screenings Scholarship Programs Emergency/ Trauma Services Research (of any kind) Cash Donations Grants to Community Groups In-kind Donations 15

Examples include: Self-help Programs Support Groups Screenings

16 Sometime During the Year In the CBISA Online software, the Community Benefit Coordinator will do the following during the year: 1. Enter 6 or 8 facility defaults for use during the this 09 year, e.g. Average pay rates e.g. by department Percentage factor for recording fringe benefits Allocation factor for applying indirect costs Budgeted total expenses and revenues for 2009 Work with Finance on these each year. 16

g. by department Percentage factor for recording fringe benefits Allocation factor for applying indirect

17 Sometime During the Year 2. Enter a simple record for each community involved department in your hospital, e.g., contact and average salary rate 3. Enter program records (or at least simplified records) on the major community programs identified above. Some information to record includes: Description and objectives Sponsoring department Outside partners, if any Targeted audience Projected outcomes and how to measure them 17

18 At Year s End In CBISA Online, the Community Benefit Coordinator will enter the annual statistics for each of the major community programs. These statistics include: # of persons served Costs and expenses Program revenue offsets, e.g., fees or other program revenue 18

19 At Year s End Finance person will enter, in CBISA Online, the annual statistics for: Charity Care Medicaid Other means-tested public programs Large subsidized health programs Large health professions education programs, if any (special screens are created in CBISA Online for this data entry) The statistics for Charity Care and Public programs also include persons served, program costs and program revenues. 19

means-tested public programs Large subsidized health programs Large health professions education

20 At Year s End Finance will run the reports used for completing the 990 Schedule H: All 8 IRS worksheets Community Benefit summary - Part I Community Benefit statistics - Part II Medicare and Bad Debt numbers - Part III Supplemental Information - Part VI 20

21 At Year s End Community Benefit Coordinator will run reports necessary for describing your community service to your communities: All of your community service efforts Your outreach efforts in certain neighborhoods Your community involvement with/for women/ children/ the needy, etc. 21

22 In Subsequent Years 1. Enter defaults for the upcoming year 2. Identify and add new community programs 3. At end of year, enter annual statistics for each program 4. Finance enter annual statistics for Charity Care and the means-tested public programs 5. Community Benefit Coordinator run 990 H reports and record Community Benefit reports. 22

23 Questions for Doug 23

24 24

VIII. FORM 990, SCHEDULE H, HOSPITALS

VIII. FORM 990, SCHEDULE H, HOSPITALS A. Overview of Schedule H, Hospitals Form 990, Schedule H, Hospitals, will be used beginning with 2008 tax years to report information by an organization that operates