The Internal Revenue Service released instructions for the tax form used by not-for-profit hospitals to report revenue, expenses and operations. Federal tax officials overhauled the filing form, the 990, to improve transparency and oversight across the tax-exempt sector. In December 2007, the agency published a redesigned form that clarified and expanded disclosure of executive compensation and governance. It also requires hospitals to report free and discounted care and other subsidized services on a separate questionnaire, Schedule H, creating a national standard for disclosing community benefits.
The agency received nearly 120 comments on a draft of the instructions released in April, according to documents posted on its Web site. Among the major changes, tax officials narrowed the definition of key employees whose salary, benefits and expenses must be reported. It now includes: those with more than $150,000 compensation; those who had or shared control or influence comparable to an officer or board member or had authority or control for at least 10% of an organizations activities; and who, of those, were among the 20 highest-paid employees.
Physician clinics and skilled-nursing facilities are eligible as subsidized health services, the agency ruled. The IRS said it would consider for future changes expanded community-benefit reporting to include services provided by hospital affiliates. -- by Melanie Evans