Question: When should recruitment of physicians be reported as community benefit and what can we count?
Recommendation: We recommend that some physician recruitment costs may be reported as community benefit/community health improvement in category A4: Social and Environmental Improvement Activities, even though "workforce development" appears in the IRS Form 990 Schedule H in Part II, Community Building because, recruitment for physicians in response to community health needs expands access and can improve community health and thus meet the criteria for community health improvement.
Report physician recruitment costs as community benefit only when the organization can document the extraordinary need for recruiting physicians. This can be demonstrated by:
- Community's official designation as a Health Professional Shortage Area or Medically Underserved Area.
- Findings of a community-need assessment, particularly identification of a need for access to primary or specialty care by low-income and other vulnerable persons.
- Physician shortage identified when compared with national recommendations.
- A physician is needed to provide a qualifying subsidized activity; for example, psychiatrists need to provide mental health services.
Be sure to apply the "prudent layperson" criteria. For example, do not include recruitment of a physician to support a profitable service. Also, we recommend that agreements with recruited physicians include responsibilities to care for underserved persons and populations. Routine recruitment costs incurred, such as human resource activities, are not considered community benefit.
Reasonable recruitment costs for targeted physicians (such as interview airfare/hotel, loan forgiveness (student loans and loans for starting practices), signing bonus, income guarantees) may be counted. Again, we recommend applying the "prudent layperson" criteria to any expenses counted as community benefit. In accounting for costs, such as loan forgiveness, report the cost in the year in which the expenditure is made.
(Updated November 2024)
Question: Our Physician Recruitment Program recruits and retains local physicians for critically needed medical specialties. The doctors come to practice in our area for a set number of years in exchange for monetary incentives, e.g., student loan repayment, home purchase down payments. The funding comes from the general budget of our parent corporation, (a 501(C)3 corporation ), not our hospital, (also a 501(C)3 corporation).
Is there a way, we could count this important contribution to our community in our hospital's Community Benefit reporting?
Recommendation:We recommend that you do not report this as community benefit on Schedule H, Part I, as the expense is not an expense of your hospital. We do recommend that you include this activity on your Schedule H, in Part VI Supplemental Information, Item 6, which asks, "If the organization is part of an affiliated health care system, describe the respective roles of the organizations and its affiliates to promoting the health of the community serviced?" Information about your organization's physician recruitment efforts could be reported here.
(Updated November 2024)