Community Benefit

Physician Residents/Student Time

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: How should I calculate the true cost of having residents/students?

Recommendation: We recommend that you follow the Schedule H Instructions which state that filing organizations are to use their most accurate costing method for community benefit. This method should be used to determine the direct and overhead costs of students, including faculty/attending time involved with supervising students (including interns and residents) and other related costs, such as the hospital's GME Office or equivalent. "Indirect costs" do not include the estimated cost of "indirect medical education." The cost amounts may be based on the Medicare Cost Report or another "more accurate" method that fully accounts for actual rather than "allowable" costs incurred. Indirect Medical Education revenue no longer is to be considered "direct offsetting revenue" to health professions education community benefit spending. Accordingly, there is no need to try to estimate Indirect Medical Education costs for purposes of Schedule H or for other community benefit reports.

(February 2011)