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November 30, 2018 11:00 PM

InDepth: A flaw in Form 990 Schedule H can render a key metric useless

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    A Modern Healthcare analysis of Schedule H in more than 1,500 Internal Revenue Service Form 990s found inconsistencies or errors in the section providers use to report the percentage of their expenses used for community benefit, even though in most instances they were following IRS' instructions.

    In about 5% of the forms examined, the Schedule H did not accurately represent how much of a provider's expenses went to benefit the community.

    The flaw in Schedule H

    While the example above at least reports the negative community benefit, in other instances the net community benefit was left blank.

    Check selected hospitals' community benefit calculations

    Modern Healthcare calculated the net community benefit and the benefit as a percentage of total expenses for more than 1,500 hospitals in California, Florida, Illinois, New York and Texas as a demonstration of the problem. We then compared the calculated results with the values reported in Schedule H, Line 7 to identify hospitals with a 990 that calculated net negative community benefit.

    How we analyzed the data

    Modern Healthcare used data from Community Benefit Insight to download and examine Internal Revenue Service Form 990s for individual hospitals from California, Florida, Illinois, New York and Texas, which can be found in the tool above. Examined were close to 2,100 Form 990s downloaded from the IRS site. Of those, close to 1,600 Form 990s were for single hospitals for 2013 through 2017 tax years. Two additional hospitals where net community benefits could not reliably be calculated with the information given were excluded.

    For a separate analysis of about 400 Form 990s for Illinois hospitals, some information was entered by hand from PDFs obtained through Guidestar, while ProPublica's Nonprofit Explorer was used to check calculations.

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    The problem with Schedule H

    Questions loom over Sutter Health's community benefit spending

    Chicago's West Side, a community in need

    Feel free to comment on this article below or share additional thoughts with our editors at [email protected].

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    • News
      • Current News
      • Providers
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      • Safety & Quality
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      • Transformation
        • Patients
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      • ESG
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      • Regional News
        • Midwest
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      • Digital Edition (Web Version)
    • Blogs
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      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
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      • Data & Insights Home
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