Does the organization use Federal Poverty Guidelines (FPG) to determine eligibility for providing discounted care to low income individuals? (Part I, line 3b)

This question and its instructions would benefit from further clarification by the IRS.

DISCUSSION: If your hospitals use the Federal Poverty Guidelines (FPGs) as the basis for determining patient eligibility for discounted care, you will need to answer this question.

If you have more than one hospital filing under this Schedule H or your hospital does not consistently use the same FPG, you will need to do a calculation to determine which FPG level applies to the most patients.

Here is a simplified sample calculation to guide you:

Hospital FPG Level # of Patients Receiving Discounted Care
Mercy 200% 100
Neighborhood 200% 100
Nearby 350% 150

Result: Since 200 patients received discounted care at 200% FPG and 150 patients received discounted care at 350%, the hospital would check the 200% box.

To determine the number of patients, the instructions say to use "contacts" or "encounters." While neither term is defined, it allows hospitals to count each time a patient is served. So, if the same patient is served 3 times at the hospital and provided with discounted care each time, the number of contacts or encounters would be 3.

NARRATIVE REQUIRED: No, but you may wish to consider providing some.

SPECIAL NOTE: For a hospital that bases eligibility criteria on factors or circumstances in addition to FPG that result in financial assistance beyond what would have been available using only FPG criteria, it is recommended that some narrative be included in Part VI line 1 where the narrative for question 3c is to be provided.

SAMPLE NARRATIVES:

In addition to providing free care to patients up to 200% of FPG, our hospital will provide free care under our catastrophic assistance program if a patient's bill exceeds X% of their annual income.

Our hospital grants charity care for medically necessary procedures related to a catastrophic event and limits a patient's responsibility for hospital charges to X% of their annual income.

Our hospital grants charity care for medically necessary procedures to any patient having net assets of less than $XX not including a personal residence.

Our hospital grants charity care for medically necessary procedures to any patient with family income under X% of the Federal Poverty Income Guidelines and having assets less than $XX not including a personal residence.


INSTRUCTIONS: Click here for the applicable IRS Schedule H instructions.

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