Question: What is the relationship between the emergency department, trauma center and air ambulance? How should expenses for these services be separated or combined to determine if there is a loss, to count as a community benefit Subsidized Health Service? Example: if the hospital is a level 1 trauma center, should trauma services be separated from other emergency department expenses or considered as one entity?

Recommendation: The following should be considered when reporting emergency services as a subsidized health service:

1. Review IRS instructions on what qualifies as a subsidized health service. (See Community Benefit Categories and Definitions in CHA's A Guide to Planning and Reporting Community Benefit).
2. When determining what information to use to calculate the subsidized loss, consider regulatory or practice standards for the service. For example, if operating a trauma center requires operating an emergency department, include the losses of both the emergency department and trauma center. If operating an air ambulance service requires having a trauma center, combine losses of those two programs.
3. Consider income that is generated from the service before reporting as a community benefit. For example, if a specific service (such as air ambulance) operates at a loss, but generates revenue (for example in the trauma center) it should be considered a cost of doing business, not a subsidized health service.
4. If an air ambulance is used to transport patients to other facilities and therefore is operated as a community service, those costs (expense minus fees collected) can be reported as community benefit.

(Updated November 2015)

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