Standardized accounting allows organizations to assess their community benefit activities over time and permits multihospital systems to aggregate and analyze information from their facilities more reliably. Standardized accounting of community benefit also allows policymakers, regulators and the public to compare hospital community benefit efforts accurately and improves the acceptance of reported information. Community benefit accounting standards are well-defined by the Internal Revenue Service in its instructions to its Form 990 Schedule H.
Important Change to 2023 IRS Form 990 Schedule H Instructions
The Internal Revenue Service (IRS) made a change to the 2023 IRS Form 990 Schedule H Instructions (see page 19) allowing hospitals to report as community benefit activities or programs that are required for licensure or accreditation if they respond to a community need, enhance public health or relieve the burden of government to improve health. CHA had requested this change in a May 17, 2023 letter to the IRS to ensure that current hospital efforts to screen for social needs and help patients find resources to address those needs could continue to be reported as community benefit.
Resources
- Accounting Worksheets (Please note that this Excel spreadsheet has several worksheets. Maximize the document to see all the worksheet tabs.)
- What Counts as Community Benefit
- What Counts Q & A Library
- Resource to value meeting space in-kind donation — Use this excel spreadsheet to value the cost of in-kind meeting space donations. Prepared by Verite Healthcare Consulting.
- IRS Form 990, Schedule H and Instructions
- Establishing the Value of Tax Exempt Status
- What Counts as Community Benefit
- Community Benefit Categories reference guide
- Restricted Donation Sample Letter (Lyon Software)
Community Benefit Reporting Resources
Community Benefit Reporting: Indirect Costs
This resource provides guidance to calculate and apply indirect costs to community benefit activities and programs.
Community Benefit and Finance/Tax Staff: Establishing an Infrastructure for Accurate Reporting
This resource sets out the importance of establishing an effective community benefit reporting infrastructure and describes 13 infrastructure elements including dedicated staff, written policies and procedures and staff training.
Community Benefit Reporting: Accounting Primer
A review of relevant accounting principles and summary of accounting methods for reportable community benefit categories. It identifies common under-reporting and over-reporting issues.
Community Benefit Reporting: Health Professions
This resource discusses common reporting issues including how to assure all reportable health professions education programs are identified, understanding what is and is not reportable, and when precepting nursing and other allied health students is reportable as a community benefit expense.
Community Benefit Reporting: Research
This document discusses common research reporting issues including accounting for research provided by the hospital versus other entities, research that is fully funded, types of studies that are counted and not counted as community benefit, and research that is partially funded by for-profit sources.
Community Benefit Reporting: Subsidized Services
This category is frequently under-reported because the services can be hard to identify. The new resource provides steps to identify and report clinical product lines that are subsidized by the hospital because they are needed by communities.