Instructions For Schedule H (Form 990) - 2016 (Page 5 of 23) in pdf

statements that describes the bad debt

filing organization's bad debt expense or

Line 6. “Coalition building” includes, but

expense.

“accounts receivable,” "allowance for

isn't limited to, participation in community

doubtful accounts," or similar

coalitions and other collaborative efforts

Line 1. Indicate if the organization

designations, provide the exact wording of

with the community to address health and

reports bad debt expense in accordance

the footnote or footnotes, or report the

safety issues.

with Statement 15.

page number(s) in which the footnote or

Line 7. “Community health improvement

footnotes appear in the attached audited

Note. Statement 15 hasn't been adopted

advocacy” includes, but isn't limited to,

financial statements.

by the AICPA. The IRS does not require

efforts to support policies and programs to

If the organization's financial

organizations to adopt Statement 15 or

safeguard or improve public health,

statements include a footnote on these

use it to determine bad debt expense or

access to health care services, housing,

issues that also includes other

financial assistance costs. Some

the environment, and transportation.

information, report in Part VI only the

organizations may rely on Statement 15 in

Line 8. “Workforce development”

relevant portions of the footnote. If the

reporting bad debt expense and financial

includes, but isn't limited to, recruitment of

organization is a member of a group with

assistance in their audited financial

physicians and other health professionals

consolidated financial statements, the

statements. Statement 15 provides

to medical shortage areas or other areas

organization can summarize that portion, if

instructions for recordkeeping, valuation,

designated as underserved, and

any, of the footnote or footnotes that

and disclosure for bad debts.

collaboration with educational institutions

apply. If the organization's financial

Line 2. Use the most accurate system

to train and recruit health professionals

statements don't include a footnote that

and methodology available to the

needed in the community (other than the

discusses bad debt expense, “accounts

organization to report bad debt expense. If

health professions education activities

receivable,” "allowance for doubtful

only a portion of a patient’s bill for services

reported in Part I, line 7f).

accounts," or similar designations, include

is written off as a bad debt, include only

a statement in Part VI that the

Line 9. “Other” refers to community

the proportionate amount attributable to

organization's audited financial

building activities that protect or improve

the bad debt. Include the organization’s

statements don't include a footnote

the community's health or safety that

proportionate share of the bad debt

discussing these issues and explain how

aren't described in the categories listed in

expense of joint ventures in which it had

the organization's financial statements

lines 1 through 8 above.

an ownership interest during the tax year.

account for bad debt, if at all.

Refer to the instructions to Part I, line 7,

Describe in Part VI the methodology

Section B.

columns (a) through (f), for descriptions of

used in determining the amount reported

the types of information that should be

on line 2 as bad debt, including how the

In this section, (a) combine allowable

reported in each column of Part II.

organization accounted for discounts and

costs to provide services reimbursed by

If the organization is filing a group

payments on patient accounts in

Medicare, (don't include community

return or has a disregarded entity or an

determining bad debt expense.

benefit costs included in Part I, line 7), (b)

ownership interest in one or more joint

combine Medicare reimbursements

Line 3. Provide an estimate of the

ventures, the organization may find it

attributable to such costs, and (c) combine

amount of bad debt reported on line 2 that

helpful to complete Part II separately for

Medicare surplus or shortfall. Include in

reasonably is attributable to patients who

itself and for each disregarded entity, joint

Section B only those allowable costs and

likely would qualify for financial assistance

venture in which the organization had an

Medicare reimbursements that are

under the hospital's financial assistance

ownership interest during the tax year, and

reported in the organization's Medicare

policy as reported in Part I, lines 1 through

group affiliate. The organization should

Cost Report(s) for the year, including its

4, but for whom insufficient information

combine the amounts from all such tables,

share of any such allowable costs and

was obtained to determine their eligibility.

according to the combined instructions in

reimbursement from disregarded

Don't include this amount in Part I,

Purpose of Schedule, and include the

entities and joint ventures in which it

line 7. Organizations can use any

combined information in Part II.

has an ownership interest. Don't include

reasonable methodology to estimate this

any Medicare-related expenses or

amount, such as record reviews, an

Part III. Bad Debt,

revenue properly reported in Part I, line 7f

assessment of financial assistance

Medicare, & Collection

or 7g.

applications that were denied due to

Practices

incomplete documentation, analysis of

In Part VI, the organization should

demographics, or other analytical

describe what portion of its Medicare

Section A. In this section, (a) report

methods.

shortfall, if any, it believes should

combined bad debt expense; (b) provide

Describe in Part VI the methodology

constitute community benefit, and explain

an estimate of how much bad debt

used to determine the amount reported on

its rationale for its position. As described

expense, if any, reasonably could be

line 3 and the rationale, if any, for

below, the organization also can enter in

attributable to persons who likely would

including any portion of bad debt as

Part VI the amount of any Medicare

qualify for financial assistance under the

community benefit.

revenues and costs not included in its

organization’s financial assistance policy;

Medicare Cost Report(s) for the year, and

and (c) provide a rationale for what portion

Line 4. In Part VI, provide the footnote

can enter a reconciliation of the amounts

from the organization's audited financial

of bad debt, if any, the organization

reported in Section B (including the

statements on bad debt expense, if

believes is community benefit. In addition,

surplus or shortfall reported on line 7) and

the organization must report whether it has

applicable, or the footnotes related to

the total revenues and costs attributable to

adopted Healthcare Financial

“accounts receivable,” "allowance for

all of the organization's Medicare

Management Association Statement No.

doubtful accounts," or similar

programs.

designations. Alternatively, report the

15, Valuation and Financial Statement

Presentation of Charity Care and Bad

page number(s) on which the footnote or

Line 5. Enter all net patient service

Debts by Institutional Healthcare

footnotes appear in the organization's

revenue (for Medicare fee for service

Providers (“Statement 15”) and provide

most recent audited financial statements,

(FFS) patients) associated with the

which must be attached to this return. If

the text or page number of its footnote, if

allowable costs the organization reports in

the footnote or footnotes address only the

applicable, to its audited financial

its Medicare Cost Report(s) for the year,

Instructions for Schedule H

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Instructions For Schedule H (Form 990) - 2016 Page 5

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