Hospital Community Benefit Dashboard

This number shows the total amount hospitals spent on Community Benefit, Community Building, and Community Health Improvement Plan (CHIP) activities, after removing any CHIP expenses that were also counted under Community Benefit or Community Building.

Hospitals with 501(c)(3) nonprofit status do not have to pay federal income taxes and are often also exempt from certain state and local taxes, including those on income, property, and some purchases. They can borrow money at lower interest rates, similar to government agencies. In addition, people who donate to these hospitals can receive tax deductions on their federal tax returns.

To keep these benefits, hospitals must provide services that help their communities. These are known as Community Benefit—a clearly defined set of activities outlined by the Internal Revenue Service (IRS). The IRS has created specific categories for community benefit programs, each with detailed definitions and accounting rules.

Although there is no federal rule requiring a minimum or maximum amount hospitals must spend on community benefits, they are required to complete a Community Health Needs Assessment (CHNA) every three years. This helps identify the most important health issues in the area. Based on the CHNA, hospitals must then develop a Community Health Improvement Plan (CHIP)—also called an Implementation Strategy—to outline how they will address those needs.

Hospitals report their community benefit spending each year using Schedule H (Form 990). In Part I of this form, they must break down their expenses by category to show how they supported the community. The categories are:

(1) Unreimbursed costs of treating Medicaid patients: These costs occurs when a hospital gets paid less than it costs to care for Medicaid patients. This shortfall is different from a “contractual allowance,” which represents the full gap between what the hospital charges and what the government actually pays. For example, if a hospital spends $1,000 to treat a Medicaid patient but only receives $700, the $300 difference is an unreimbursed cost. The IRS provides a standard method for calculating these shortfalls, but hospitals may use their own approved methods instead. Those hospital-specific methods are not made public.

• Differences in hospital reporting and State calculation of the unreimbursed costs of treating Medicaid patients are noted throughout this report. The two measures used, IRS Form 990 Schedule H and the State’s calculation of the percentage of the cost of treating Medicaid patients that is covered by Medicaid payments, include different factors and cannot be directly compared.

(2) Cost from other means-tested Programs: These are costs related to government health programs where people qualify based on their income or assets. One example is the State Children’s Health Insurance Program (SCHIP), a federal program that gives money to states to help provide health insurance for families with children who may not qualify for Medicaid but still need help affording coverage.

(3) Financial Assistance at Cost: also known as Charity Care. This category includes costs related to financial assistance, which are free or discounted healthcare services given to people who qualify based on the hospital’s financial assistance policy and cannot afford to pay for all or part of their care. Financial assistance does not include:

• Bad debt or unpaid bills the hospital expected to collect but didn’t
• The cost of care for patients who did not pay their bills
• The difference between what it costs to provide care under Medicaid, Medicare, or other income-based programs and what the hospital gets paid
• Discounts for patients who pay their bills quickly or in full
• Price reductions that are part of agreements with insurance companies or other third-party payers

(4) Subsidized Health Services: These are costs related to important health services that a hospital provides even though they lose money doing so. The loss is calculated after removing any losses from bad debt, financial assistance, Medicaid, or other government programs—those are counted in other parts of the report.

To count as a subsidized health service, the hospital must offer the service because the community needs it. A service is considered needed if:

• It wouldn’t be available in the area without the hospital,
• There wouldn’t be enough of the service to meet the community’s needs, or
• The government or another nonprofit would have to take over providing it.

Examples of subsidized health services include:

• Inpatient care like neonatal intensive care, addiction recovery, and psychiatric units
• Outpatient care like emergency rooms, clinics in low-income areas, and home health programs

These services do not usually include support departments like radiology, lab work, or anesthesiology. However, physician clinics and skilled nursing facilities can count as subsidized health services if they meet the criteria above.

(5) Cash and in-kind Contribution: These are donations that a hospital gives to healthcare organizations or community groups to support specific community benefit activities. The hospital must clearly state in writing how the donation will be used. Cash contributions are direct money donations. In-kind contributions are non-cash donations, such as:

• Staff time spent helping the community while still being paid by the hospital
• Use of hospital space (like meeting rooms) given to nonprofit community groups
• Donated items like food, equipment, or supplies (measured by how much they cost the hospital)

(6) Community Health Improvement and Community Benefit Operations: Community Health Improvement refers to programs or activities that a hospital supports or pays for with the specific goal of improving the health of the community. These programs usually do not bring in money from hospital visits, although small fees or sliding scale payments may sometimes be charged.

Community Benefit Operations include:

• Work related to completing Community Health Needs Assessments (CHNAs),
• Running and managing community benefit programs,
• Fundraising or applying for grants to support these programs.

Hospitals cannot report programs as community benefit if they are mainly used for marketing or help the hospital more than the community. For example, programs do not count if they:

• Are mainly designed to attract more patients with private insurance,
• Are only done to meet licensing or accreditation requirements (unless they also respond to a community health need),
• Only serve hospital staff or doctors.

To be counted, the program must respond to a clear community need that was identified in a Community Health Improvement Plan (CHIP) or CHNA.


(7) Research: This category includes the cost of studies or investigations aimed at creating new knowledge that can be shared with the public. The goal is to improve understanding of health, illness, and healthcare.

Examples of research activities include:

• Studying how the body works and what causes diseases
• Testing how safe and effective treatments are, such as in clinical trials
• Lab-based research
• Research on health outcomes, disease patterns (epidemiology), or how well treatments work
• Studies on behavior, healthcare access, or disease prevention
• Research on changes in the healthcare system
• Sharing findings with others, such as publishing in medical journals

Hospitals can report the cost of research they fund themselves or research funded by tax-exempt organizations or government agencies.

(8) Health Professions Education: This category includes the cost of educational programs that help people become licensed or certified health professionals. It also includes continuing education needed to keep a state license or professional certification. These programs can lead to a degree, certificate, or other required training under state law. Examples include nursing programs, medical training, and continuing education for doctors or therapists.

Programs that are only for the hospital’s own employees or medical staff do not count, and scholarships given only to those individuals are also excluded. However, if the main goal of a program is to educate health professionals in the wider community, it can be included. Costs for training medical residents and interns can be included too, even if they are officially listed as employees on tax forms (like the W-2).

For detailed information on Community Benefit categories and specific examples, please refer to the IRS 990 Schedule H instructions, available at: https://www.irs.gov/instructions/i990sh

Community building activities help strengthen the community's ability to improve health. These activities often focus on the root causes of health problems, also called social determinants of health, like education, housing, clean air, and access to healthy food.

Here are the main types of community building activities:

• Physical Improvements and Housing: This includes building or fixing housing for people in need, removing harmful materials from homes, improving neighborhoods, providing housing after hospital stays, housing for low-income seniors, and creating or maintaining parks and playgrounds.

• Economic Development: This include helping small businesses in underserved areas or creating jobs in places with high unemployment.

• Community Support: Examples include childcare programs, mentoring for youth, support groups, violence prevention programs, and public health emergency planning like disease tracking or training the community to prepare for disasters.

• Environmental Improvements: These are efforts to improve the local environment, such as cleaning polluted air or water, safely removing waste, or protecting the community from environmental risks.

Note: Hospitals cannot include costs from following laws that apply to their own buildings or businesses unless:

• The activity is done mainly to improve community health,
• It addresses an environmental issue that affects the community’s health, and
• The hospital spends more on the activity than it gets back (operates at a loss).
• Activities done mostly for marketing purposes also do not count.

• Leadership Development and Training for Community Members: This includes training in conflict resolution, civic and cultural skills, language skills, or becoming a medical interpreter.

• Coalition Building: Working with other community organizations to address local health and safety concerns.

• Community Health Improvement Advocacy: Supporting policies and programs that help protect or improve public health, access to healthcare, housing, the environment, and transportation.

• Workforce Development: Helping recruit doctors and health professionals to underserved areas and working with schools to train future healthcare workers.

• Other: Any other activity that helps protect or improve the community’s health and safety. Examples include programs that support food security, nutrition, and other important social needs.

The federal government requires hospitals to complete a Community Health Needs Assessment (CHNA) and develop a Community Health Improvement Plan (CHIP), also called an Implementation Strategy. These plans help hospitals identify and respond to the most important health needs in the communities they serve.

Hospitals must report to the Connecticut Office of Health Strategy (OHS) on their progress in carrying out their CHIP, including how much money they have spent on related efforts.

Community Benefit, Community Building, and CHIP activities often overlap and are not considered separate or exclusive from one another.

These are hospital expenses used to address a community need, but they were not reported to the IRS because they do not meet the official IRS definitions for Community Benefit or Community Building. Even though they aren’t counted in those categories, they still support the hospital’s Community Health Improvement Plan (CHIP).