1. Douglas W. Lyon, CPA and Trina Hackensmith Presented by: Welcome! Wisconsin Hospital Association and Members 1

2. Background Historical Challenges to All NFP Hospitals  Are not-for-profits sufficiently charitable?  Should the playing field be level?  Is the “Community Benefit Standard” adequate? 2 ©Lyon Software, 2011

3. Heath Care Reform 3 PPACA Requirements for charitable hospitals:  Community health needs assessment  Implementation strategy  Financial assistance (FA) policy  Free emergency care to those meeting FA policy  Limit charges to those meeting FA policy  No extraordinary collection practices Julie Trocchio, Catholic Health Association, 2010

4. Topics for Today’s Webinar A Review of “What Counts” New Requirements – Health Reform and IRS Implementing a Community Benefit Program  identify who should be involved in the tracking/reporting process  Identify programs, collect data  report to your communities CBISA Survey™ and CBISA Online™ 4 ©Lyon Software, 2011

5. 5 A Review of “What Counts”

6. What is Community Benefit? Community benefit programs or activities provide treatment and/or promote health and healing as a response to identified community needs. For a program to “count”: 1.It must address a documented community need, and 2.It must have at least one of these community benefit objectives a)Improve access to health care services b)Enhance health of the community c)Advance medical or health care knowledge d)Relieve/reduce the burden of government/other community efforts 6 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition

7. What is Community Benefit? 1.It must address a documented community need 7 Health needs assessment survey Public health department Healthy Communities/Healthy People 2010 goals CDC Board or management Community leaders Research findings Source: A Guide for Planning & Reporting Community Benefit 2008 Edition

8. What is Community Benefit? 2. It must have at least one of these community benefit objectives a) Improve access to health care services 8 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition The program is available broadly to the public The program participants include vulnerable or underserved persons A barrier to access is reduced or eliminated If the program ceased to exist, the community would lose access to a needed service

9. What is Community Benefit? 2. It must have at least one of these community benefit objectives b) Enhance health of the community 9 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition The program is designed around public health goals and principles The program yields measurable improvements to health status The community’s health status would decline if the program ceased to exist A public health agency provides comparable services The program is operated in collaboration with public health partners

10. What is Community Benefit? 2. It must have at least one of these community benefit objectives c) Advance medical or health care knowledge 10 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition The program trains health professionals/students as they advance toward health profession degrees or other credentials The organization does not require trainees to join the staff Health professional continuing education programs are open to professionals in the community The program involves research, with findings available broadly to the public within a reasonable period of time

11. What is Community Benefit? 2. It must have at least one of these community benefit objectives d) Relieve/reduce the burden of government/other community efforts 11 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition The program relieves a government financial or programmatic burden Government provides the same or a similar service Government provides support of the activity If the program were closed, cost to government or another tax- exempt organization would increase The program receives philanthropic support through community volunteers or contributions

12. What is NOT Community Benefit A program does not count as community benefit, if:  The program is primarily for marketing purposes  A n objective “prudent layperson” would question whether the program truly benefits the community / The program benefits the organization more than the community  The program or donation is unrelated to health or the hospital’s mission  The program represents a community benefit provided by another entity or individual  Access to the program is restricted to individuals affiliated with the hospital  The activity represents a normal “cost of doing business” or is associated with the current standard of care 12 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition

13. What Qualifies (Counts) as a Community Benefit? 13 Charity Care, at cost Unreimbursed Medicaid Unreimbursed Costs-other Means-tested Government Programs Categories A-G A.Community Health Improvement B.Health Professions Education C.Subsidized Health Services D.Research E.Financial & In-kind Contributions F.Community Building Activities G.Community Benefit Operations

14. Questions and Recommendations 14 Community Health Improvement Q : We continue to wrestle with the decision about counting prenatal education and lactation services in the community… R : In most situations, we recommend that prenatal classes not be reported as community benefit because they are typically part of a hospital's comprehensive maternity program, and, while not legally or professionally required, is the current standard of care. Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

15. Questions and Recommendations 15 Community Health Improvement Q : All babies born in our facility are sent home with hats that are knit by our volunteers. If parents of limited means request booties, sleepers, quilts, receiving blankets, etc., we provide the parents with a bag of needed supplies. All these supplies are donated to us. Can we report as community benefit our employees' time to support this program? Our facility is paying the employees for their time. R : This is a lovely program but since these items are only for your own patients and are part of the services you provide them, the costs to support this program should not be reported as community benefit. Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

16. Questions and Recommendations 16 Community Health Improvement Q : When should care management be reported as community benefit? R : Visit the “What Counts Q & A” section on CHA’s website (www.chausa.org) for the complete answer to this and other questions.www.chausa.org Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

17. Questions and Recommendations 17 Health Professions Education Q : Should we report the cost to our organization to train chaplains? Our Clinical Pastoral Education (CPE) program receives federal reimbursement for three supervisor positions in our CPE program. R : We recommend reporting as community benefit the cost of the CPE program as long as the students are not required to work for your organization post training and you offset the cost of the CPE program with both the federal funds you receive and student fees. This cost should be reporting in the category of Health Profession Education. Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

18. Questions and Recommendations 18 Cash and In-Kind Contributions Q : Should we report the e xpenses for recreational fundraising events. R : The task force recommends that organizations consider the following guidelines when deciding whether to report fundraising costs for golf outings, galas and other entertainment-oriented events: Do not report any costs if the primary purpose of the event is marketing/public relations. Do not report costs related to entertainment aspects (green fees, prizes, food). Report other expenses associated with fundraising, such as staff time, if all of the proceeds go to community benefit. Be very conservative and be sure any expense reported passes the "laugh test.” Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

19. Questions and Recommendations 19 Cash and In-Kind Contributions Q : Our hospital provides 24/7 telemedicine services to community hospitals, primarily in EDs, to assist with the evaluation of patients with symptoms of an acute stroke… There is no charge to the community hospitals or patients for this service… regardless of their insurance coverage. R : We recommend first carefully analyzing why this program is being provided… If the primary purpose of the program is to address an identified community health need, we recommend reporting this as an "in– kind" contribution...You are providing the service to other organizations, not directly to patients, and services to other organizations should be reported in this category. Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

20. Questions and Recommendations 20 Community Building Activities Q : Our hospital participates in the Volunteer Income Tax Assistance (V.I.T.A) program with the IRS, a free tax preparation program open to individuals and their families who earn less than $46,000 a year… R : We recommend it be reported as "Community Building" in the category of "Community Support". We further recommend that your organization determine - to the extent possible - the actual cost to the organization for providing the service, for example, the employees' time if they participate on paid time. If your employees are not participating on paid time, then calculate the administrative expenses incurred to coordinate this activity. We do not recommend reporting what you might have charged. Community benefit equals actual expense not lost opportunity costs. Source: http://www.chausa.org/Pages/Our_Work/Community_Benefit/What_Counts/What_Counts_Q_and_A/Categories/

21. Questions and Recommendations 21 Community Benefit For the complete questions and answers to these and many other “what counts” questions, visit CHA’s website http://www.chausa.org/communitybenefit/ ©Lyon Software, 2011

22. IRS Requirements: Form 990 Schedule H 22

23. New IRS Requirement: Form 990 Schedule H What does Schedule H want to know?  Programs and Services Community Benefit Community Building  Policies Charity Care Billing and Collection Assessment  Other information Medicare Bad Debt Joint Ventures Facilities 23 ©Lyon Software, 2011

24. 990H Part I: Community Benefit 24 IRS Schedule H, 2009 Form

25. 990H Part II: Community Building 25 IRS Schedule H, 2009 Form

26. IRS Form 990H Part VI: Essays Part VI questions describe:  how the organization assesses the health needs  how the organization informs patients about financial assistance  the community the organization serves  how community building activities promote health of the communities  other ways the organization promotes the health of the community  (if part of a system) the role of the system and affiliates in promoting health 26 ©Lyon Software, 2011

27. 990H Part VI: Essay Questions 27 IRS Schedule H, 2009 Form

28. The three main team members in collecting, tracking and reporting community benefit: Finance Community Benefit Professional Communicators 28 IRS Form 990 Schedule H: The Team ©Lyon Software, 2011

29. The first 3 lines of Part I, Table 7 – lines 7a through 7c Charity Care Medicaid Other Means-Tested Programs 29 IRS Form 990 Schedule H: Finance ©Lyon Software, 2011

30.  IRS prescribed format  Allows for IRS specified fields such as Medicaid or provider taxes and uncompensated care pools.  Cost-based: cost accounting or ratio (with IRS prescribed numerator and denominator) CBISA™ Charity Care, Medicaid and Means-Tested Screens 30 IRS Form 990 Schedule H: Finance ©Lyon Software, 2011

31. The form itself (Part III) and instructions call for some limited information on: Medicare Bad Debt 31 They’re not Part I – Community Benefit – but they are items of interest to the IRS. IRS Form 990 Schedule H: Finance Part III ©Lyon Software, 2011

32.  Part I, Table 7, lines 7e through 7j  Part II Community Building Activities  Part VI Questions Further Information is collected by your community benefit professionals. 32 IRS Form 990 Schedule H: CB Professional ©Lyon Software, 2011

33. Each program must be qualified as a true community benefit, using the CHA Guide and the IRS instructions. (CHA and the IRS are in complete agreement on these definitions) There are often 100s of these CB programs in most hospitals, even CAHs and other smaller hospitals. 33 IRS Form 990 Schedule H: CB Professional Programs ©Lyon Software, 2011

34. Hospital staffs will quickly embrace a “team effort” / “team approach”, for compelling reasons The Team Approach 34 Coordinators Senior Leadership Finance PR & Marketing Reporters Board Members Tax & Legal ©Lyon Software, 2011

35. Three Easy Steps 35

36. Three Easy Steps 1. Create a team Who should be involved? 2. Identify and account for the Programs currently in place, assess needs, develop more programs What counts, what’s needed, and what do you collect? 3. Report to your communities How do you tell your story and who needs to know? 36 ©Lyon Software, 2011

37. Programs Titles e.g., Charity Care; Health Screenings; Mobile Van Types e.g., Charity Care; Medicaid; A – G Objectives e.g., increase access Community need e.g., can’t get to hospital Target audience(s) e.g., disadvantaged 37 Step 2: Qualify & Identify Existing Programs Collect the Required Data ©Lyon Software, 2011

38. Statistics Number of persons served Hospital costs Staff hours Supplies Other direct (if any) Indirect (if applicable) Offsets (program fees, net patient service revenue) 38 Step 2: Qualify & Identify Existing Programs Collect the Required Data Total Cost – Total Offsets = Net Community Benefit ©Lyon Software, 2011

39. Step 3: Tell Your Story Tell your story Through numbers Through narratives 39 ©Lyon Software, 2011

40. Results / Outcomes Can be related to community needs Can be related to program objectives Can (usually) be measured (numbers, ratios, percentages) Can always be described (anecdotal outcomes) 40 Step 3: Tell Your Story ©Lyon Software, 2011

41. Strategies for telling your story 1. Separate community benefit report 2. Community section in the annual report 3. 990 Schedule H 4. Internally Bulletin boards Newsletters Cafeteria table tents, etc 41 Step 3: Tell Your Story ©Lyon Software, 2011

42. 42 Resources/Checklists for Implementing an Effective Community Benefit Program

43. Resources: Implementing a Community Benefit Program Meeting the Federal Requirements:  What to report as community benefit  Community health need assessment  Implementation strategy  Financial assistance policies  Billing and collection policies 43 ©Lyon Software, 2011

44. 44 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition Community Assessment Checklist  Done at least every 3 years  Gets input from persons who represent broad interests of community  Gets input from persons with special knowledge of public health  Is made widely available to the public  Can be done with/by others Resources: Implementing a Community Benefit Program

45. 45 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition Resources: Implementing a Community Benefit Program Implementation Strategy Checklist  Adopted an implementation strategy to meet needs found in assessment  Description of how organization is addressing needs identified  Description of any needs not addressed and “reasons why such need are not being addressed”

46. 46 Financial Assistance Policies Checklist  Criteria for eligibility  Basis to what is charged patients  Method for applying for financial assistance  Measures to “widely publicize” the policy  Nondiscrimination in emergency care for eligible persons Source: A Guide for Planning & Reporting Community Benefit 2008 Edition Resources: Implementing a Community Benefit Program

47. 47 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition Billing and Collection Checklist  Limitation on what is charged to persons eligible for financial assistance  Prohibition against use of gross charges  No “extraordinary collection actions” until eligibility determination Resources: Implementing a Community Benefit Program

48. 48 Source: A Guide for Planning & Reporting Community Benefit 2008 Edition Catholic Health Association www.chausa.org/communitybenefit Association for Community Health Improvement (ACHI) www.communityhlth.org Resources: Other Organizations

49. Trends in Community Benefit 49  Moving from random acts of kindness to strategic thinking  Moving from fringe to core business  Moving from counting to evaluation  Moving from the basement to the boardroom  Professionalism, accountability, transparency Julie Trocchio, Catholic Health Association, 2010

50. CBISA Survey™ and CBISA Online™ 50

51. CBISA Online™ 51 Login to CBISA Online™ ©Lyon Software, 2011

52. CBISA Online™ 52 What’s New: Some Changes to CBISA Online™ in the last 12 months ©Lyon Software, 2011  Locking and Closing a Fiscal Year  IRS 990H Enhancements  Additional fields for IRS Bad Debt screens  Joint Venture screen  IRS Multi Reports  “Memo Only” fields for Restricted gifts/grants/support  Reporter Enhancements  “Publishing” feature  Copying Programs & Occurrences  Reports & Listing

53. CBISA Online™ 53 What’s New: Some Changes to CBISA Online™ in the last 12 months ©Lyon Software, 2011  Program Enhancements  “Targeted for” moved to Program/General screen  Community Benefit Objectives (4)  CBISA™ Customizations  Custom Report Generator  Email Users from the User Control Panel  “Bring Forward” Department rates

54. CBISA Online™ 54 ©Lyon Software, 2011 1.Complete your Program and Occurrence information 2.Complete your Financial Services numbers a) Charity Care b) Medicaid c) Other Means Tested d) IRS Medicare e) IRS Bad Debt 3.Check the box to send any narratives/stories from the Leadership Journal

55. CBISA Online™ 55 ©Lyon Software, 2011 Acknowledge the Snapshot request (ok) and import any Pending records Accept the Snapshot request

56. CBISA Survey™ 56 Login to CBISA Survey™ using the secure URL and the User Name and Password assigned to you by your State Administrator https://www.cbisaonline.com/wi_8901_survey ©Lyon Software, 2011

57. CBISA Survey™ 57 Choose each Activity in the Browse Box, then “add” the Occurrence. “Save” each new Occurrence. ©Lyon Software, 2011

58. CBISA Survey™ 58 “Add” and “Save” each applicable Financial Service Record: Charity Care, Medicaid, Other Means- Tested, Medicare, Bad Debt ©Lyon Software, 2011

59. CBISA Survey™ 59 Let’s you know your Association is requesting your data = ©Lyon Software, 2011 Edit your facility (Defaults, highlight your hospital name, click edit)

60. CBISA Survey™ 60 ©Lyon Software, 2011 …and you are done! Accept the Rollup Request

61. 61 Disclaimer: This webinar presentation Is not intended to constitute tax advice upon which your organization should rely. For qualified advice, consult with a tax professional.