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- Schedule H
Charity Care at Cost (Part I, line 7a) |
| DISCUSSION:The only place the IRS instructions describe charity care is in the Part 1, line 1 instructions. Complete Worksheets 1 and 2 for this line.  You may wish to begin with Worksheet 2 unless the hospital uses a cost accounting methodology, rather than a cost-to-charge ratio for calculating costs. If you use a
cost accounting methodology, the calculations for Worksheet 2 may be unnecessary. The cost accounting methodology must be equivalent to the approach in the worksheet and the related instructions.
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| NARRATIVE REQUIRED: No |
| Worksheet 1 (Click here for Worksheet 1 instructions) |
| Gross patient charges | ||
| 1. | Amount of gross patient charges written off pursuant to charity care policies | 1. _______________ |
| Total community benefit expense | ||
| 2. | Ratio of patient care cost to charges (from Workshop 2, if used) | 2. _______________ |
| 3. | Estimated cost (multiply line 1 by line 2, or obtain from cost accounting) | 3. _______________ |
| 4. | Medicaid provider taxes | 4. _______________ |
| 5. | Total community benefit expense (add lines 3 and 4; enter on Part I, line 7a, column (c)) | 5. _______________ |
| Direct offsetting revenue | ||
| 6. | Revenues from uncompensated care pools or programs (enter on Part I, line 7a, column (d)) | 6. _______________ |
| 7. | Net community benefit expense (subtract line 6 from line 5; enter on Part I, line 7a, column (e)) | 7. _______________ |
| 8. | Total expense (enter amount from Form 990, Part IX, LIne 25, column (A), and include the organization's share of joint venture expenses.) |
8. _______________ |
| 9. | Percent of total expense (divide line 7 by line 8; enter on Part I, line 7a, column (f)) | 9. _______________% |
| Worksheet 2 (Click here for Worksheet 2 instructions) |
| Patient Care Cost | |||
| 1. | Total operating expense | 1. _________ | |
| Less Adjustments | |||
| 2. | Non-patient care activities | 2. _________ | |
| 3. | Medicaid provider taxes | 3. _________ | |
| 4. | Total community benefit expense | 4. _________ | |
| 5. | Total community building expense | 5. _________ | |
| 6. | Total adjustments (add lines 2-5) | 6. _________ | |
| 7. | Adjusted patient care cost (subtract line 6 from line 1) | 7. _________ | |
| Patient Care Charges | |||
| 8. | Gross patient charges | 8. _________ | |
| Less: Adjustments | |||
| 9. | Gross charges for community benefit programs | 9. _________ | |
| 10. | Adjusted patient care charges (subtract line 9 from line 8) | 10. _________ | |
| Calculation of Ratio of Patient Care Costs to Charges | |||
| 11. | Ratio of patient care costs to charges (divide line 7 by line 10; report on the applicable lines of Worksheets 1, 3, or 6) | 11. _______% | |