Hospital Tax-Exempt Policy: A Comparison of Schedule H and State Community Benefit Reporting Systems

Document Type

Journal Article

Publication Date



Frontiers in Public Health Services and Systems Research


Volume 2, Issue 1

Inclusive Pages

Article 3


The Patient Protection and Affordable Care Act (ACA) revises federal tax exemption standards for nonprofit hospitals by clarifying and augmenting their community benefit obligations. The ACA amendments followed the 2009 launch of Schedule H – the form on which hospital community benefit, financial, and institutional activities are reported and which must be appended to each facility’s annual Form 990 nonprofit institution information return. Schedule H effectively creates a nationwide, standardized, facility-specific, transparent, and fully publicly accessible reporting system covering the nation’s more than 2,900 nonprofit hospitals. Schedule H delineates financial assistance and bad debt, and requires identification of community health improvement and community building. Many states have attempted to capture similar information regarding nonprofit hospitals’ community benefit activities through their own reporting systems. We analyzed state statutes and reporting systems for a sample of 24 states. We found that, in general, state laws lack the clarity of the IRS approach in terms of how community benefit is defined, categorized and reported. In contrast to Schedule H, state laws tend to be broadly drawn, with considerable variability in terms, less delineation among bad debt and financial assistance, and variability in treatment of community health improvement and community building.

Peer Reviewed


Open Access