By INDU SPUGNARDI
May 18, 2020
CHA and Vizient have released a set of resources to help tax-exempt hospitals more accurately and efficiently report community benefit. The resources were developed in response to requests from hospital community benefit and finance professionals asking for more detailed guidance on how to report certain categories of community benefit expenses. These categories included expenses related to health professions education, research and subsidized health services.
CHA staff also heard from the field that health care organizations, particularly hospitals with many staff responsible for collecting community benefit data, health systems with multiple hospitals, and those undergoing mergers, could benefit from more formalized reporting processes that link the work of community benefit and finance staff.
Comprehensive and accurate reporting of community benefit is a vital function for tax-exempt hospitals. As Julie Trocchio, CHA's senior director of community benefit and continuing care, notes, "communities and policymakers want to know that tax-exempt hospitals are fulfilling their charitable obligations, that they are putting their resources towards activities that improve community health." Accurate reporting also helps hospitals meet important organizational goals, particularly as community health improvement is seen as a key component of helping organizations meet quality and cost expectations.
Trocchio also recognized the longtime partnership between Vizient and CHA in providing community benefit resources to all tax-exempt hospitals. "Community benefit is not just a Catholic health care issue; it is an important issue to all mission-driven health care organizations and we are thankful to be able to partner with Vizient in developing resources that help all tax-exempt hospitals meet the needs of their communities."
The resources were written by Keith Hearle, founder and president of Verite Healthcare Consulting. Prior to founding Verite, Hearle worked with The Lewin Group where he helped CHA develop its first resources around community benefit reporting in 1989. These reporting guidelines would eventually be adopted by the Internal Revenues Service in 2008 to develop the IRS Form 990 Schedule H for Hospitals. This form was developed by the IRS in response to calls from Congress for more transparency and accountability around the community benefit provided by tax-exempt hospitals. Since that time Hearle has helped CHA updated guidance around accounting and reporting community benefit as rules and regulations have changed.
These new resources build upon guidance provided in CHA's Guide for Planning and Reporting Community Benefit. That foundational resource provides a comprehensive approach to community benefit, including guidance on accounting and reporting. Given the high-level nature of the guidance in the guide, CHA has developed these new accounting and reporting resources to address the more specific concerns and needs of accounting and tax staff who support community benefit reporting. Additional accounting and reporting resources will be developed as more needs are identified.
The resources are available online at the CHA website and available free of charge to all. The resources include:
- 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 whether 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 CHA resource provides steps to identify and report clinical product lines that are subsidized by the hospital because they are needed by communities.