Question: I understand that the cost of patient financial assistance counts as community benefit. What about supporting activities, including enrollment assistance, presumptive eligibility screening and decision support tools for financial assistance, and maintaining, updating, and translating the financial assistance policy, plain language summary and application form, etc.? Do they all count as community benefit?
Recommendation: It could be reasonable for a hospital filing a Schedule H to report costs associated with financial assistance enrollment as providing a community health improvement service (Sch. H, Part I, line 7e), if the primary purpose for providing financial assistance enrollment is to improve access to health care services and improve health, and in response to a community health need for such services that has been established through a CHNA by the hospital or a similar process by a public health agency or community group.
We would recommend reporting the cost of enrollment assistance and the cost of presumptive eligibility screening and decision support tools as costs of providing financial assistance (Schedule H, Part I, line 7a), only if, 1. The primary purpose is to increase access to care; 2. The hospital has identified the need to provide low-income patients greater access to health care as a community need; and 3. Enrollment assistance, presumptive eligibility screening and decision support tools for financial assistance are applied at the beginning of the patient experience or revenue cycle rather than at the end of the revenue cycle (e.g., as a means of reclassifying bad debt write-offs into financial assistance). If all three are met, we recommend reporting as A3. Community Health Improvement Services: Health Care Support Services.
We do not recommend reporting the cost of developing, maintaining, and/or translating your financial assistance policy, plain language summary, and application as a community health improvement service expense. We consider these to be part of a hospital’s routine operations and do not consider them to be community health improvement services. However, if the hospital uses IRS Schedule H Worksheet 2 to determine its ratio of patient care cost to charges, for purposes of determining its cost of providing financial assistance reported on Schedule H, Part I, line 7a, then it could include these costs in “patient care costs” on Worksheet 2, line 1.
Note: Note: If a hospital were to treat the cost of enrollment assistance activities as A3. Community Health Improvement Service: Health Care Support Services, it should report that cost only on Schedule H, Part I, line 7e. To avoid double counting, when calculating the Ratio of Patient Care Cost to Charges in Worksheet 2, the hospital would probably need to deduct these costs from “total operating expense” in Worksheet 2 by including the cost of enrollment assistance activities as “total community benefit expense” and subtracting from "total operating expenses" as part of the calculation of patient care cost.
(Updated January 2025)