AHA Seeks Modification from IRS on Community Benefit Reporting

WASHINGTON (March 5, 2010) - Today, the American Hospital Association (AHA) urged the Internal Revenue Service (IRS) to improve the new hospital community benefit reporting form - Schedule H to Form 990 - to better reflect the benefits nonprofit hospitals provide to their communities.  The AHA cited new research that examines how the new form does not fully recognize the community benefit of nonprofit multi-hospital systems. 

The AHA has long supported providing more useful information to the public and policymakers about the benefits hospitals provide to their communities and has worked closely with the IRS to develop Schedule H.  However, today's study questions whether the new Form will accurately reflect the benefit hospital systems - representing nearly 60 percent of hospitals nationally - provide.  

The research by Brad Gray, Ph.D. and Ashley Palmer, MPP with the Urban Institute, which is highlighted in the March Trustee magazine, found that nonprofit multi-hospital systems will face consequential reporting issues because many will file multiple and seemingly unconnected Schedule H's.  As a result, cross subsidies used for community benefit activities will likely be obscured.  Results also will be skewed because entities other than hospitals will be included in the information reported. 

The study's authors conclude that the initial Schedule H filings will be "disappointing to those hoping for a reliable tool to accurately capture and compare community benefits..."  

"The majority of nonprofit hospitals are part of a multi-hospital system. By understanding the community benefit that these systems provide we can better recognize how communities are being served and share this good work with the public," said Rich Umbdenstock, president and CEO, of the American Hospital Association.  "However, today's study shows that changes need to be made to Schedule H to make it a useful and reliable tool when looking at community benefit reporting.  Accurately capturing and comparing community benefit is the intent of the IRS; yet, without changes the role of systems will be obscured by Schedule H." 

The survey was conducted at the request of the AHA by Brad Gray, Ph.D., senior fellow and Ashley Palmer, MPP, research associate, with the Urban Institute in Washington, D.C.  The survey was conducted through in person interviews and an Internet survey of more than 200 nonprofit multi-hospital systems. 

For more information about the report and a copy of the AHA's letter to the IRS please visit www.aha.org.

About the AHA

The AHA is a not-for-profit association of health care provider organizations that are committed to health improvement in their communities.  The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks and other providers of care.  Founded in 1898, AHA provides education for health care leaders and is a source of information on health care issues and trends. 

Contact:           Matt Fenwick, (312) 422-2820

Elizabeth Lietz, (202) 626-2284