Community Benefit

Medicaid Losses

Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.

Question: Can each organization within a system count its Medicaid shortfall and not net out shortfalls and gains at the system level?

Recommendation: CHA's community benefit guidelines recommend that Medicaid shortfalls and gains from all multiple organizations within a system be netted out when reporting at the system level.


Question: Should the losses from Medicaid managed care be reported as community benefit?

Recommendation: Yes, the IRS Instructions for Form 990, Schedule H say to report "revenue associated with Medicaid recipients enrolled in managed care plans." Therefore, in Part I, line 7b of Schedule H you should report the expense of Medicaid (including managed care plans) in column (c) and report the revenue in column (d). The net of revenue and expenses (usually a loss) is reported in column (e). Instructions for Worksheet 3 provide detailed instructions on how to calculate Medicaid expense and revenues.

(December 2009)