1. CBISA™ Financial Defaults and the IRS 990 Schedule H A resource for Finance
For any CBISATM questions, contact Customer Support: (419) or
Use “enter” on your keyboard, or click your left mouse button to move through the screens

3. Planning for Community Benefit
The information provided in this presentation does not constitute legal or tax advice. The material is provided for informational/educational purposes only.

4. Planning for Community Benefit
How does Finance help in the planning for Community Benefit?
Review/explain the financial assistance policy
Establish standardized methods and policies
Develop average rates for salaries and indirect costs
Advise and provide oversight and support (what counts and how to count it)
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5. Planning for Community Benefit
Review/explain the financial assistance policy
Community benefit professionals and reporters need to understand the financial assistance policy.
Who will be reporting on the program? Finance (if the program is part of the financial assistance program, i.e., charity care) or the community benefit team?
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6. Planning for Community Benefit
Establish standardized methods and policies
When policies and procedures are in place, the job of collecting, reporting and tracking community benefit becomes much more efficient. Finance can help set some standardized practices and policies.
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7. Planning for Community Benefit
Develop average rates for salaries and indirect costs
CBISA uses average salary rates for departments and up to four (4) group rates plus indirect cost percentages for programs that take place in the hospital (or facility) and those that take place in the community.
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8. Planning for Community Benefit
Advise and provide oversight and support (what counts and how to count it)
Community benefit programs or activities provide treatment and/or promote health and healing as a response to identified community needs.
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9. Planning for Community Benefit
For a program to “count”:
It must address a documented community need, and
It must have at least one of these community benefit objectives:
Improve access to health care services
Enhance health of the community
Advance medical or health care knowledge
Relieve/reduce the burden of government/other community efforts to improve health
Source: Catholic Health Association Guide for Planning & Reporting Community Benefit 2012 Edition

10. Planning for Community Benefit
A program does not count as community benefit, if:
The program is primarily for marketing purposes
The program or donation is unrelated to health or the hospital’s mission
An objective “prudent layperson” would question whether the program truly benefits the community (the program benefits, or appears to benefit, the organization more than the community)
The program represents a community benefit provided by another entity or individual
Access to the program is restricted to employees or physicians affiliated with the hospital
The activity represents a normal “cost of doing business” or is associated with the current standard of care
Source: Catholic Health Association Guide for Planning & Reporting Community Benefit 2012 Edition

11. Other Means-Tested Government Programs
Planning for Community Benefit
Financial Assistance,
at cost
Community Health Improvement
Health Professions Education
Subsidized Health Services
Research
Financial & In-kind Contributions
Community Building Activities
Community Benefit Operations
Medicaid
Other Means-Tested Government Programs
Categories A-G
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12. Other Means-Tested Government Programs
Planning for Community Benefit
Financial Assistance,
at cost
Subsidized Health Services
Finance specifically provides the numbers (persons served, expenses and offsetting revenue) for Financial Assistance, Medicaid and Other Means-Tested Programs. Also, because those three costs may also be included in Subsidized Health Services (Category C), Finance must remove any double counting entries and determine whether the service is still subsidized.
Medicaid
Other Means-Tested Government Programs
Categories A-G
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13. Financial Defaults
The information provided in this presentation does not constitute legal or tax advice. The material is provided for informational/educational purposes only.

14. Financial Defaults: Fiscal Year
Select the active fiscal year from the dropdown list
Enter in the applicable fiscal year starting and ending dates on the Reporting Unit/Financial information page
Hint: To access the Reporting Unit/Financial page, choose Options/Org Defaults. Highlight the reporting unit, and click on “Edit”
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15. Financial Defaults: Expenses, Revenues & Indirect %’s
Enter total functional expenses (for IRS 990H reporting), operating expenses and revenues, and indirect cost method percentages
Hint: The amounts entered at the beginning of the year will be estimates. You will want to update the dollar amounts with final audited numbers prior to running your community benefit reports and 990H reports.
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16. Financial Defaults: Indirect Method
After entering the indirect cost method percentages:
1. The Administrator/Coordinator will set the default method at the Program level
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17. Financial Defaults: Indirect Method
2. Select the applicable method of calculation for each occurrence
Hint: The Occurrence indirect cost will default to the method chosen on the Program/General screen, but may be changed, as needed.
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18. Financial Defaults: Salary Defaults/Group Rates
Enter the salary defaults
Reporting Unit-wide average fringe benefit percent. Applied to all Occurrences that are added AFTER the percent is entered and the form is saved. Use Fringe % tool to apply Fringe Percent for a specific date range
Defined in
Custom Terms
Reporting Unit-wide average hourly pay rate. Used on Occurrences when department is left at “none apply”
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19. Financial Defaults: Fringe Percent
Enter the appropriate date range, the Fringe percent, then apply.
CBISA will let you know how many records were updated.
Hint: If you enter occurrences into a fiscal year BEFORE you set the Fringe percent default, you will want to use this tool to update those records. Occurrences entered AFTER the default is set will automatically use the correct Fringe percent entered on the Reporting Unit Financial page.
©Lyon Software 2014

20. Financial Defaults: Salary Defaults/Group Rates
Define up to four standard salary group rates
Hint: To access Custom Terms, choose Options/Edit Defaults. Open Custom Terms by clicking on the tab. Highlight each Average Hourly Pay Rate term, click “Edit,” enter in a “substitution” (named standard group) and “Save”. Administrators/Coordinators have access to Edit Defaults.
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21. Financial Defaults: Salary Defaults/Dept. Rates
Update the average rate for each department
Hint: You may highlight multiple departments at one time (use the “control key” or “shift key”) and update the rate information for each department that has the same average rate. Finance users may only update rates.
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22. Financial Defaults: Salary Defaults/Dept. Rates
Hint: At the beginning of a new fiscal year, you may choose to “bring forward” the average salary rates from the previous year. You may bring forward one, more than one, or all rates by using the multi-select option (control key or shift key).
©Lyon Software 2014

23. IRS 990 Schedule H Part I
The information provided in this presentation does not constitute legal or tax advice. The material is provided for informational/educational purposes only.

24. IRS 990H Who Must File?
“An organization that answered “Yes” on Form 990, Part IV, line 20a must complete and attach Schedule H to Form 990.”
Source: Instructions for Schedule H (Form 990) Instructions, Hospitals

25. IRS 990H Part I Financial Assistance Questions
Source: Schedule H (Form 990) Hospitals

26. CBISA Screen: IRS Questions/Part I 1a-6b
Choose “Add” to activate the question page
To answer the questions on Part I of the IRS 990H (lines 1a-6b), access the Financial Services Module and choose IRS 990 Questions, Part I tab
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27. IRS 990H Part I #7 Table of Quantifiable Community Benefit
Report on the Table (lines 7a-7k) at cost, the organization’s financial assistance and certain other community benefits.
Use the organization’s most accurate costing methodology (cost account system, cost-to-charge ratio, or other) to calculate the amounts reported on the table.
Source: Instructions for Schedule H (Form 990) Instructions, Hospitals
CBISA™ gives you the systematic methodology to collect and complete the data for lines 7a-7k in:
Financial Services Module (lines 7a-7c)
Programs Module with Occurrences (lines 7e-7i)
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28. IRS 990H Part I #7 Table of Quantifiable Community Benefit
Columns (a) “Number of activities or programs” and (b) “Persons served” are optional
Column (c) “Total community benefit expense” means the total gross expense of the activity incurred during the year… includes both direct costs and indirect costs.
Column (d) “Direct offsetting revenue” means revenue from the activity during the year that offsets the total community benefit expense of that activity... includes any revenue generated by the activity or program…also includes restricted grants or contributions that the organization uses to provide a community benefit, such as a restricted grant to provide financial assistance or fund research.
Source: Instructions for Schedule H (Form 990) Instructions, Hospitals

29. IRS 990H Part I #7 Table of Quantifiable Community Benefit
Column (e) “Net community benefit expense” is Total community benefit expense” (column c) minus “Direct offsetting revenue” (column d). If the calculated amount is less than zero, report such amounts as a negative number.
Column (f) “percent of total expense” is based on column (e) “net community benefit expense,” rather than column (c) “total community benefit expense.”
Source: Instructions for Schedule H (Form 990) Instructions, Hospitals

30. IRS 990H Part I #7 Table of Quantifiable Community Benefit
Financial Services
Programs/Occurrences
Source: Schedule H (Form 990) Hospitals

31. CBISA Screen: Ratio of Patient Costs to Charges
Choose “Add” to activate the date entry page
To calculate a ratio of patient care costs to charges, access the Financial Services Module and choose Ratios screen
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32. CBISA Screen: Financial Assistance, at Cost
1. Click “Add”
2. Enter Data
3. Click “Save”
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33. CBISA Screen: Medicaid, Net Costs
1. Click “Add”
2. Enter Data
3. Click “Save”
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34. CBISA Screen: Means Tested Programs, Net Costs
1. Click “Add”
2. Enter Data
3. Click “Save”
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35. Enter Qualifying Joint Ventures
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36. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category A & G Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
©Lyon Software 2014

37. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category B Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
©Lyon Software 2014

38. Programs and Occurrences
For category B “Health Profession Education” programs, make any offsetting adjustments on the occurrence screen.
Step 1: Choose the Program from the browse box on the control panel
Step 2: Open the Occurrence screens by clicking on the link
Step 3: Choose the applicable occurrence from the browse box
Step 4: Enter any applicable offsets
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39. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category C Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
©Lyon Software 2014

40. Programs and Occurrences
For category C “Subsidized Health Services” programs, make any offsetting adjustments on the occurrence screen.
Step 1: Choose the Program from the browse box on the control panel
Step 2: Open the Occurrence screens by clicking on the link
Step 3: Choose the applicable occurrence from the browse box
Step 4: Make any necessary edits to avoid “double counting” issues.
©Lyon Software 2014

41. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category D Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
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42. Specific Offset for Category D Programs
Programs and Occurrences
Specific Offset for Category D Programs
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43. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category E Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
©Lyon Software 2014

44. Enter any benefit received from contribution in “Other”
Programs and Occurrences
Enter any benefit received from contribution in “Other”
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45. CBISA™ Reports & Listings
Reports to complete each applicable section of the IRS Form 990 Schedule H and the corresponding supporting worksheet.
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46. IRS 990 Schedule H Part II Part III and Part VI
The information provided in this presentation does not constitute legal or tax advice. The material is provided for informational/educational purposes only.

47. IRS 990H Part II: Community Building Activities (F)
Programs/Occurrences
Source: Schedule H (Form 990) Hospitals

48. IRS 990H Part II Community Building Activities
“An organization that reports information in this Part must describe, in Part VI how its community building activities promote the health of the communities it serves.”
Physical improvements and housing
Economic development
Community support
Environmental improvements
Leadership development and training for community members
Coalition building
Community health improvement advocacy
Workforce development
Source: Instructions for Schedule H (Form 990) Instructions, Hospitals

49. Persons Served, Expenses, and Offsets
Programs and Occurrences
Enter Category F Programs
Data is entered by Coordinators and Reporters
Attach Statistical Occurrence forms capturing
Persons Served, Expenses, and Offsets
©Lyon Software 2014

50. IRS 9990H Part III: A, B, and C
Source: Schedule H (Form 990) Hospitals

51. CBISA Screen: IRS Bad Debt
2. Choose your method
1. “Add” to activate the data entry screen
3. Enter the data and “Save” the record
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52. CBISA Screen: IRS Medicare
1. “Add” to activate the data entry screen
2. Enter your data
3. “Save” the record
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53. CBISA Screen: IRS Questions for Bad Debt, Medicare, Collection Practices
“Add” activates the data entry screen
Choose “Yes” or “No” from the dropdown or for question 8, choose the appropriate answer by clicking on the corresponding radio button.
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54. IRS 9990H Part VI: Supplemental Questions
Source: Schedule H (Form 990) Hospitals

55. CBISA Screen: IRS Questions Supplemental Questions
“Add” activates the data entry screen
Enter text into each free form description box
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56. Summary
The information provided in this presentation does not constitute legal or tax advice. The material is provided for informational/educational purposes only.

57. Summary: Numbers of Community Benefit
Some basics about the numbers of community benefit
Measured on the basis of cost (actual financial, not opportunity)
Avoid double-counting
Include indirect costs
Use the most accurate cost-accounting methods
Don’t offset by restricted contributions
Use “proportionate share” for qualifying joint ventures
©Lyon Software 2014

58. Community Benefit Professional
Summary: Team Members’ Duties
Community Benefit Professional
Community Health Improvement Services (Part I, 7e)
Research (Part I, 7h)
Cash Contributions (Part I, 7i)
In-kind Contributions (Part I, 7i)
Community Benefit Operations (Part I, 7e)
Community Building Activities (Part II)
Case for Community Building as Community Benefit (Part VI)
©Lyon Software 2014

59. Summary: Team Members’ Duties
Finance
Ratio Patient & Costs to Charges (IRS Worksheet 2)
Financial Assistance (Part I, 7a)
HFMA Statement 15 Applicability
Medicaid (Part I, 7b)
Other Means-Tested Public Programs (Part I, 7c)
Health Professions Education-costs & offsets (Part I, 7f)
Subsidized Health Services-costs & offsets (Part I, 7g)
Double Count Adjustments (Part I, 7f, 7g)
Bad Debt (Part III, Section A)
Medicare (Part III, Section B)
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60. Summary: Team Members’ Duties
Others
Financial Assistance Policy Questions (Part I & Part VI)
Financial Assistance Policies & Billing Directives Questions
Definition of Community (Part VI)
Collection Practices (Part III, Section e)
©Lyon Software 2014

61. Lyon Software…striving to make social accountability reporting a streamlined process…