2008 Instructions For Schedule H (Form 990) Page 8
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15Worksheet 1. Charity Care at Cost (Part I, line 7a)
Keep for Your Records
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 Worksheet 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.
%
the organization in Part I, lines 7e, 7f, 7h,
Part I, lines 7a, 7b, 7c, and 7g, column
(c), if the organization has not relied on
and 7i, column (c), so these expenses are
Worksheet 2. Ratio of
the ratio of patient care cost to charges
not double-counted when the ratio of
Patient Care Cost to
from this worksheet to determine these
patient care cost to charges is applied.
expenses, but rather has relied on a cost
Charges
Also include in line 4 the total
accounting system or other cost
Worksheet 2 may be used to calculate the
community benefit expense reported on
accounting method to estimate costs of
organization’s ratio of patient care cost to
charges.
Worksheet 2. Ratio of Patient Care
Line 1. Enter the organization’s total
Cost to Charges
operating expenses (excluding bad debt
(may be used for
expense) from its most recent audited
other worksheets)
Keep for Your Records
financial statement.
Line 2. Enter the cost of non-patient
care activities. “Non-patient care
Patient Care Cost
activities” include health care operations
that generate “other operating revenue”
1. Total operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
such as non-patient food sales, supplies
sold to non-patients, and medical records
Less Adjustments
abstracting. The cost of non-patient care
activities does not include any total
2. Non-patient care activities . . . . . . . . . . . . . . .
2.
community benefit expense reported on
3. Medicaid provider taxes . . . . . . . . . . . . . . . . .
3.
Worksheets 1 through 8.
If the organization is unable to
4. Total community benefit expense . . . . . . . . . .
4.
establish the cost associated with
5. Total community building expense . . . . . . . . .
5.
non-patient care activities, the
organization can use other operating
6. Total adjustments (add lines 2 – 5) . . . . . . . . . . . . . . . . . . . .
6.
revenue from its most recent audited
financial statement as a proxy for these
7. Adjusted patient care cost (subtract line 6 from line 1) . . . . . .
7.
costs. This proxy assumes no markup
exists for other operating revenue
Patient Care Charges
compared to the cost of non-patient care
activities. Alternatively, if other operating
8. Gross patient charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
revenue provides a markup compared to
Less: Adjustments
the cost of non-patient care activities, the
organization can assume such a markup
9. Gross charges for community benefit programs . . . . . . . . . . . .
9.
exists when completing line 2.
10. Adjusted patient care charges (subtract line 9 from line 8) . . . . .
10.
Line 3. Enter the Medicaid provider
taxes paid by the organization included
Calculation of Ratio of Patient Care Costs to
on line 1, so this expenditure is not
Charges
double-counted when the ratio of patient
care cost to charges is applied.
11. Ratio of patient care cost to charges (divide line 7 by line 10;
report on the applicable lines of Worksheets 1, 3, or 6) . . . . . . .
11.
%
Line 4. Enter the sum of the total
community benefit expenses reported by
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