Accounting for community benefit and evaluating the impact of your implementation plan

How well are you connecting your CHNA to your community benefit reporting?

The requirement for not-for-profit hospitals to conduct a Community Health Needs Assessment (CHNA) is tied directly to the support of your community benefit reporting and tax-exempt status. A new requirement in the 501(r) Final Rules requires hospitals to “evaluate the impact” of their activities by demonstrating outcomes from initiatives as described in their prior implementation plan and to report on these activities every year on Form 990 Schedule H.

Increasing the pressure to ensure compliance and accuracy, the IRS announced in late August that it made the first revocation of tax-exempt status of a hospital for not fully complying with IRS code 501(r) requirements. The IRS has been actively auditing hospitals for 501(r) compliance over the past 12-18 months. During this time the IRS Exempt Organization Office completed 692 reviews and referred 166 hospitals for field examination. Further, heightened scrutiny by states and local municipalities of hospitals’ community benefit reporting has increased challenges to NFP hospitals’ sales and property tax exemptions.

Most hospitals struggle with keeping accurate accounting of community benefit activities and tracking measureable outcomes from their CHNA initiatives.

In this webinar, Baker Tilly NFP tax and CHNA experts revisit the importance and fundamental accounting of community benefit reporting and outline specific tactics to capture and report outcomes from your CHNA implementation plan to allow you to both comply with 501(r) and measure the effectiveness of your community benefit programs.

Key takeaways:

  • Understand 501(r) requirements regarding evaluation of the impact of community benefit activities derived from the hospital’s CHNA
  • Understand proper documentation and accounting for community benefit programs for accurate reporting
  • Distinguish between activities on Schedule H that can and cannot be counted toward community benefit to reduce discrepancies and maximize reportable activities and dollars
  • Understand the difference between capturing outputs vs. outcomes from initiatives and how to develop measureable action planning for community benefit programs

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For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.