Douglas W. Lyon, CPAand
Trina Hackensmith
Presented by:
Welcome!
Wisconsin Hospital Association
and Members
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Background
Historical Challenges to All NFP Hospitals
Are not-for-profits sufficiently charitable?
Should the playing field be level?
Is the “Community Benefit Standard” adequate?
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Heath Care Reform
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PPACA Requirements for charitable hospitals:
Community health needs assessment
Implementation strategy
Financial assistance (FA) policy
Free emergency care to those meeting FA policy
Limit charges to those meeting FA policy
No extraordinary collection practicesJulie Trocchio, Catholic Health Association, 2010
Topics for Today’s Webinar
A Review of “What Counts”
New Requirements – Health Reform and IRS
Implementing a Community Benefit Program
identify who should be involved in the tracking/reporting process
Identify programs, collect data
report to your communities
CBISA Survey™ and CBISA Online™
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A Review of “What Counts”
What is Community Benefit?
Community benefit programs or activities provide treatment and/or promote health and healing as a response to identified community needs.
For a program to “count”:
1.It must address a documented community need, and
2.It must have at least one of these community benefit objectives
a) Improve access to health care services
b) Enhance health of the community
c) Advance medical or health care knowledge
d) Relieve/reduce the burden of government/other community efforts
6Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
What is Community Benefit?
1. It must address a documented community need
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•Health needs assessment survey
•Public health department
•Healthy Communities/Healthy People 2010 goals
•CDC
•Board or management
•Community leaders
•Research findings
Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
What is Community Benefit?
2. It must have at least one of these community benefit objectives
a) Improve access to health care services
8Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
•The program is available broadly to the public
•The program participants include vulnerable or underserved
persons
•A barrier to access is reduced or eliminated
•If the program ceased to exist, the community would lose
access to a needed service
What is Community Benefit?
2. It must have at least one of these community benefit objectives
b) Enhance health of the community
9Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
•The program is designed around public health goals and
principles
•The program yields measurable improvements to health status
•The community’s health status would decline if the program
ceased to exist
•A public health agency provides comparable services
•The program is operated in collaboration with public health
partners
What is Community Benefit?
2. It must have at least one of these community benefit objectives
c) Advance medical or health care knowledge
10Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
•The program trains health professionals/students as they
advance toward health profession degrees or other credentials
•The organization does not require trainees to join the staff
•Health professional continuing education programs are open to
professionals in the community
•The program involves research, with findings available broadly
to the public within a reasonable period of time
What is Community Benefit?
2. It must have at least one of these community benefit objectives
d) Relieve/reduce the burden of government/other community efforts
11Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
•The program relieves a government financial or programmatic
burden
•Government provides the same or a similar service
•Government provides support of the activity
•If the program were closed, cost to government or another tax-
exempt organization would increase
•The program receives philanthropic support through community
volunteers or contributions
What is NOT Community Benefit
A program does not count as community benefit, if:
The program is primarily for marketing purposes
A n objective “prudent layperson” would question whether the program truly
benefits the community / The program benefits the organization more than the
community
The program or donation is unrelated to health or the hospital’s mission
The program represents a community benefit provided by another entity or
individual
Access to the program is restricted to individuals affiliated with the hospital
The activity represents a normal “cost of doing business” or is associated
with the current standard of care
12Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
What Qualifies (Counts) as a Community Benefit?
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Charity Care, at cost
Unreimbursed Medicaid
Unreimbursed Costs-other
Means-tested Government
Programs
Categories A-G
A. Community Health Improvement
B. Health Professions Education
C. Subsidized Health Services
D. Research
E. Financial & In-kind Contributions
F. Community Building Activities
G. Community Benefit Operations
Questions and Recommendations
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Community Health Improvement
Q: We continue to wrestle with the decision about counting prenatal education and lactation services in the community…
R: In most situations, we recommend that prenatal classes not be reported as community benefit because they are typically part of a hospital's comprehensive maternity program, and, while not legally or professionally required, is the current standard of care.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Community Health Improvement
Q: All babies born in our facility are sent home with hats that are knit by
our volunteers. If parents of limited means request booties, sleepers, quilts, receiving blankets, etc., we provide the parents with a bag of needed supplies. All these supplies are donated to us.Can we report as community benefit our employees' time to support this program? Our facility is paying the employees for their time.
R: This is a lovely program but since these items are only for your own
patients and are part of the services you provide them, the costs to support this program should not be reported as community benefit.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Community Health Improvement
Q: When should care management be reported as community benefit?
R: Visit the “What Counts Q & A” section on CHA’s website (www.chausa.org) for the complete answer to this and other questions.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Health Professions Education
Q: Should we report the cost to our organization to train chaplains? Our Clinical Pastoral Education (CPE) program receives federal reimbursement for three supervisor positions in our CPE program.
R: We recommend reporting as community benefit the cost of the CPE program as long as the students are not required to work for your organization post training and you offset the cost of the CPE program with both the federal funds you receive and student fees. This cost should be reporting in the category of Health Profession Education.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Cash and In-Kind Contributions
Q: Should we report the expenses for recreational fundraising events.
R: The task force recommends that organizations consider the
following guidelines when deciding whether to report fundraising costs for golf outings, galas and other entertainment-oriented events:
•Do not report any costs if the primary purpose of the event is marketing/public relations. •Do not report costs related to entertainment aspects (green fees, prizes, food). •Report other expenses associated with fundraising, such as staff time, if all of the proceeds go to community benefit. •Be very conservative and be sure any expense reported passes the "laugh test.”
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Cash and In-Kind Contributions
Q: Our hospital provides 24/7 telemedicine services to community
hospitals, primarily in EDs, to assist with the evaluation of patients with symptoms of an acute stroke… There is no charge to the community hospitals or patients for this service… regardless of their insurance coverage.
R: We recommend first carefully analyzing why this program is being
provided… If the primary purpose of the program is to address an identified community health need, we recommend reporting this as an "in–kind" contribution ...You are providing the service to other organizations, not directly to patients, and services to other organizations should be reported in this category.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Community Building Activities
Q: Our hospital participates in the Volunteer Income Tax Assistance
(V.I.T.A) program with the IRS, a free tax preparation program open to individuals and their families who earn less than $46,000 a year…
R: We recommend it be reported as "Community Building" in the
category of "Community Support" . We further recommend that your organization determine - to the extent possible - the actual cost to the organization for providing the service, for example, the employees' time if they participate on paid time. If your employees are not participating on paid time, then calculate the administrative expenses incurred to coordinate this activity. We do not recommend reporting what you might have charged. Community benefit equals actual expense not lost opportunity costs.
Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/
Questions and Recommendations
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Community Benefit
For the complete questions and answers to these and many other “what counts” questions, visit CHA’s website
http://www.chausa.org/communitybenefit/
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IRS Requirements: Form 990 Schedule H
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New IRS Requirement: Form 990 Schedule H
What does Schedule H want to know?
Programs and Services
• Community Benefit
• Community Building
Policies
• Charity Care
• Billing and Collection
• Assessment
Other information
• Medicare
• Bad Debt
• Joint Ventures
• Facilities
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990H Part I: Community Benefit
24IRS Schedule H, 2009 Form
990H Part II: Community Building
25IRS Schedule H, 2009 Form
IRS Form 990H Part VI: Essays
Part VI questions describe: how the organization assesses the health needs
how the organization informs patients about financial assistance
the community the organization serves
how community building activities promote health of the communities
other ways the organization promotes the health of the community
(if part of a system) the role of the system and affiliates in promoting health
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990H Part VI: Essay Questions
27IRS Schedule H, 2009 Form
The three main team members in collecting, tracking and reporting community benefit:
Finance
Community Benefit Professional
Communicators
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IRS Form 990 Schedule H: The Team
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The first 3 lines of Part I, Table 7 – lines 7a through 7c
Charity Care
Medicaid
Other Means-Tested Programs
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IRS Form 990 Schedule H: Finance
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IRS prescribed format
Allows for IRS specified fields such as Medicaid orprovider taxes and uncompensated care pools.
Cost-based: cost accounting or ratio (with IRS prescribed numerator and denominator)
CBISA™ Charity Care, Medicaid and Means-Tested Screens
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IRS Form 990 Schedule H: Finance
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The form itself (Part III) and instructions call for some limited information on:
Medicare
Bad Debt
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They’re not Part I – Community Benefit – but they are items of interest to the IRS.
IRS Form 990 Schedule H: Finance
Part III
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Part I, Table 7, lines 7e through 7j
Part II Community Building Activities
Part VI Questions
Further Information is collected by your
community benefit professionals.community benefit professionals.
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IRS Form 990 Schedule H: CB Professional
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Each program must be qualified as a true community benefit, using the CHA Guide and the IRS instructions. (CHA and the IRS are in complete agreement on these definitions)
There are often 100s of these CB programs in most hospitals, even CAHs and other smaller hospitals.
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IRS Form 990 Schedule H: CB Professional
Programs
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Hospital staffs will quickly embrace a “team effort” / “team approach”, for compelling reasons
The Team Approach
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Coordinators
SeniorLeadership
Finance
PR & Marketing
Reporters
Board Members Tax & Legal
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Three Easy Steps
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Three Easy Steps
1. Create a team
Who should be involved?
2. Identify and account for the Programs currently in place, assess needs, develop more programs
What counts, what’s needed, and what do you collect?
3. Report to your communities
How do you tell your story and who needs to know?
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• Programs
Titles e.g., Charity Care; Health Screenings; Mobile Van
Types e.g., Charity Care; Medicaid; A – G
Objectives e.g., increase access
Community need e.g., can’t get to hospital
Target audience(s) e.g., disadvantaged
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Step 2: Qualify & Identify Existing Programs
Collect the Required Data
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• Statistics
Number of persons served
Hospital costsStaff hoursSuppliesOther direct (if any)Indirect (if applicable)
Offsets (program fees, net patient service revenue)
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Step 2: Qualify & Identify Existing Programs
Collect the Required Data
Total Cost – Total Offsets = Net Community Benefit
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Step 3: Tell Your Story
• Tell your story
Through numbers
Through narratives
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• Results / Outcomes
Can be related to community needs
Can be related to program objectives
Can (usually) be measured (numbers, ratios, percentages)
Can always be described (anecdotal outcomes)
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Step 3: Tell Your Story
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• Strategies for telling your story
1. Separate community benefit report
2. Community section in the annual report
3. 990 Schedule H
4. Internally
• Bulletin boards
• Newsletters
• Cafeteria table tents, etc
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Step 3: Tell Your Story
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Resources/Checklists for Implementing an Effective Community Benefit Program
Resources: Implementing a Community Benefit Program
Meeting the Federal Requirements:
What to report as community benefit
Community health need assessment
Implementation strategy
Financial assistance policies
Billing and collection policies
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44Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
Community Assessment Checklist
Done at least every 3 years
Gets input from persons who represent broad interests of community
Gets input from persons with special knowledge of public health
Is made widely available to the public
Can be done with/by others
Resources: Implementing a Community Benefit Program
45Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
Resources: Implementing a Community Benefit Program
Implementation Strategy Checklist
Adopted an implementation strategy to meet needs found in assessment
Description of how organization is addressing needs identified
Description of any needs not addressed and “reasons why such need are not being addressed”
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Financial Assistance Policies Checklist
Criteria for eligibility
Basis to what is charged patients
Method for applying for financial assistance
Measures to “widely publicize” the policy
Nondiscrimination in emergency care for eligible persons
Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
Resources: Implementing a Community Benefit Program
47Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
Billing and Collection Checklist
Limitation on what is charged to persons eligible for financial assistance
Prohibition against use of gross charges
No “extraordinary collection actions” until eligibility determination
Resources: Implementing a Community Benefit Program
48Source: A Guide for Planning & Reporting Community Benefit 2008 Edition
Catholic Health Association
www.chausa.org/communitybenefit
Association for Community Health Improvement (ACHI)
www.communityhlth.org
Resources: Other Organizations
Trends in Community Benefit
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Moving from random acts of kindness to strategic thinking
Moving from fringe to core business
Moving from counting to evaluation
Moving from the basement to the boardroom
Professionalism, accountability, transparency
Julie Trocchio, Catholic Health Association, 2010
CBISA Survey™
and
CBISA Online™
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CBISA Online™
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Login to CBISA Online™
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CBISA Online™
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What’s New: Some Changes to CBISA Online™ in the last 12 months
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Locking and Closing a Fiscal Year
IRS 990H Enhancements Additional fields for IRS Bad Debt screens Joint Venture screen IRS Multi Reports “Memo Only” fields for Restricted gifts/grants/support
Reporter Enhancements “Publishing” feature Copying Programs & Occurrences Reports & Listing
CBISA Online™
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What’s New: Some Changes to CBISA Online™ in the last 12 months
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Program Enhancements “Targeted for” moved to Program/General screen Community Benefit Objectives (4)
CBISA™ Customizations
Custom Report Generator
Email Users from the User Control Panel
“Bring Forward” Department rates
CBISA Online™
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1. Complete your Program and Occurrence information
2. Complete your Financial Services numbers a) Charity Careb) Medicaidc) Other Means Testedd) IRS Medicaree) IRS Bad Debt
3. Check the box to send any narratives/stories from the Leadership Journal
CBISA Online™
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Acknowledge the Snapshot request (ok) and import any Pending records
Accept the Snapshot request
CBISA Survey™
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Login to CBISA Survey™ using the secure URL and the User Name and Password assigned to you by your State Administrator
https://www.cbisaonline.com/wi_8901_survey
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CBISA Survey™
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Choose each Activity in the Browse Box, then “add” the Occurrence. “Save” each new Occurrence.
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CBISA Survey™
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“Add” and “Save” each applicable Financial Service Record: Charity Care, Medicaid, Other Means-Tested, Medicare, Bad Debt
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CBISA Survey™
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Let’s you know your Association is requesting your data=
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Edit your facility (Defaults, highlight your hospital name, click edit)
CBISA Survey™
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…and you are done!
Accept the Rollup Request
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Disclaimer: This webinar presentationIs not intended to constitute tax advice upon which your organization should rely. For qualified advice, consult with a tax professional.