Part I requires reporting of financial assistance policies, the

availability of community benefit reports, and the cost of financial assistance and other community benefit activities and programs. Worksheets and accompanying instructions are provided at the end of the instructions to this schedule to assist in completing the table in Part I, line 7.

Line 1. A FAP, sometimes referred to as a “charity care policy,” is a policy describing how the organization will provide financial assistance at its hospital(s) and other facilities, if any. Financial assistance includes free or discounted health services provided to persons who meet the organization's criteria for financial assistance and are unable to pay for all or a portion of the services. Financial assistance doesn't include bad debt or uncollectible charges that the organization recorded as revenue but wrote off due to a patient's failure to pay, or the cost of providing such care to such patients; the difference between the cost of care provided under Medicaid or other means-tested government programs or under Medicare and the revenue derived therefrom; self-pay or prompt pay discounts; or contractual adjustments with any third-party payers.

Line 2. Check only one of the three boxes. “Applied uniformly to all hospitals” means that all of the organization's hospital facilities use the same FAP. “Applied uniformly to most hospitals” means that the majority of the organization's hospital facilities use the same FAP. “Generally tailored to individual hospitals” means that the majority of the organization's hospital facilities use different financial assistance policies. If the organization operates only one hospital facility, check “Applied uniformly to all hospitals.”

Line 3. Answer lines 3a, 3b, and 3c, based on the financial assistance eligibility criteria that apply to (1) the largest number of the organization's patients based on patient contacts or encounters; or (2) if the organization doesn't operate its own hospital facility, the largest number of patients of a hospital facility operated by a joint venture in which the organization has an ownership interest. For example, if the organization has two hospital facilities, use the financial assistance eligibility criteria used by the hospital facility that has the most patient contacts or encounters during the tax year .

Line 3a. “Federal Poverty Guidelines” (FPG) are the Federal Poverty Guidelines published annually by the U.S. Department of Health and Human Services. If the organization has established a family or household income threshold that a patient must meet or fall below to qualify for free medical care, check the box in the “Yes” column and indicate the specific threshold by checking the appropriate box. For instance, if a patient's family or household income must be less than or equal to 250% of FPG for the patient to qualify for free care, then check the box marked “Other” and enter “250%.”

Line 3b. If the organization has established a family or household income threshold that a patient must meet or fall below to qualify for discounted medical care, check the box in the “Yes” column and indicate the specific threshold by checking the appropriate box.

Line 3c. If applicable, describe the other criteria used, such as asset test or other means test or threshold for free or discounted care, on Part VI, line 1, of this schedule. An “asset test” includes (i) a limit on the amount of total or liquid assets that a patient or the patient's family or household can own for the patient to qualify for free or discounted care; and/or (ii) a criterion for determining the level of discounted medical care patients can receive, depending on the amount of assets that they and/or their families or households own.

Line 4. “Medically indigent” means persons whom the organization has determined are unable to pay some or all of their medical bills because their medical bills exceed a certain percentage of their family or household income or assets (for example, due to catastrophic costs or conditions), even though they have income or assets that otherwise exceed the generally applicable eligibility requirements for free or discounted care under the organization's FAP.

Line 5. Answer lines 5a, 5b, and 5c based on the organization's budgeted amounts under its FAP.

2 2025 Instructions for Schedule H (Form 990)

Line 5a. Answer “Yes” if the organization established or had in place at any time during the tax year an annual or periodic budgeted amount of free or discounted care to be provided under its FAP. If “No,” skip to line 6a.

calculating the amount entered in line 7, column (f), enter this bad debt expense on Part VI, line 1.

Line 5b. Answer “Yes” if the free or discounted care the organization provided in the applicable period exceeded the budgeted amount of costs or charges for that period. If “No,” skip to line 6a.

The following are descriptions of the type of information reported in each column of the table.

Line 5c. Answer “Yes” if the organization denied financial assistance to any patient eligible for free or discounted care under its FAP or under any of its hospital facilities' financial assistance policies because the organization's or the facility's financial assistance budget was exceeded.

Line 6. Answer lines 6a and 6b based on the community benefit report that the organization prepared for the organization as a whole during the tax year .

Line 6a. Answer “Yes” if the organization prepared a written report during the tax year that describes the organization's programs and services that promote the health of the community or communities served by the organization. If the organization's community benefit report is contained in a report prepared by a related organization, answer “Yes” and identify the related organization on Part VI, line 1. If “No,” skip to line 7.

Line 6b. Answer “Yes” if the organization made the community benefit report it prepared during the tax year available to the public.

Tip: Examples of how an organization can make its community benefit report available to the public are to post the report on the organization's website and to make a paper copy of the community health needs assessment (CHNA) report available for public inspection upon request and without charge at the hospital facility.

Lines 7a through 7k. Enter on the table (lines 7a through 7k), at cost, the organization's financial assistance (as defined in the instructions for line 1) and certain other community benefits (as defined in the instructions to Worksheets 1–8). Enter on line 7i contributions that the organization restricts, in writing, to one or more of the community benefit activities listed on lines 7a through 7h. Don't enter such contributions on lines 7a through 7h. To calculate the amounts to be entered on the table, use the worksheets or other equivalent documentation that substantiates the information entered consistent with the methodology used on the worksheets. Don't include bad debt in these amounts. Bad debt will be entered in Part III.

Tip: If the organization completed worksheets other than on a combined basis (for example, facility by facility, joint venture by joint venture), the organization should combine all information from these worksheets for purposes of entering amounts on the table. Only the portion of each joint venture or partnership that represents the organization's proportionate share, based on capital interest, can be entered on lines 7a through 7k. See Purpose of Schedule, earlier, for instructions on aggregation.

Use the organization's most accurate costing methodology (cost accounting system, cost-to-charge ratio, or other) to calculate the amounts entered on the table. If the organization uses a cost-to-charge ratio, it can use Worksheet 2, Ratio of Patient Care Cost to Charges, for this purpose. See the instructions for Part VI, line 1, regarding an explanation of the costing methodology used to calculate the amounts entered on the table.

If the organization included any costs for a physician clinic as subsidized health services in Part I, line 7g, enter these costs on Part VI, line 1.

If the organization included any bad debt expense on Form 990, Part IX, line 25, but subtracted this bad debt for purposes of

Column (a). “Number of activities or programs” means the number of the organization's activities or programs conducted during the year that involve the community benefit entered on the line. Enter each activity and program on only one line so that it isn't counted more than once. Entering in this column is optional.

Column (b). “Persons served” means the number of patient contacts or encounters in accordance with the filing organization's records. Persons served can be entered in multiple rows, as services across different categories may be provided to the same patient. Entering in this column is optional.

Column (c). “Total community benefit expense” means the total gross expense of the activity incurred during the year, calculated by using the pertinent worksheets for each line item. “Total community benefit expense” includes both “direct costs” and “indirect costs.” “Direct costs” means salaries and benefits, supplies, and other expenses directly related to the actual conduct of each activity or program. “Indirect costs” means costs that are shared by multiple activities or programs, such as facilities and administrative costs related to the organization's infrastructure (space, utilities, custodial services, security, information systems, administration, materials management, and others).

Column (d). “Direct offsetting revenue” means revenue from the activity during the year that offsets the total community benefit expense of that activity, as calculated on the worksheets for each line item. “Direct offsetting revenue” includes any revenue generated by the activity or program, such as payment or reimbursement for services provided to program patients.

“Direct offsetting revenue” 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. “Direct offsetting revenue” doesn't include unrestricted grants or contributions that the organization uses to provide a community benefit. Organizations may describe any inconsistencies from reporting in prior years in Part VI.

Examples. The organization receives a restricted grant from an unrelated organization that must be used by the organization to provide financial assistance. The amount of the restricted grant is entered as direct offsetting revenue on line 7a, column (d).

“Direct offsetting revenue” 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. “Direct offsetting revenue” doesn't include unrestricted grants or contributions that the organization uses to provide a community benefit. Organizations may describe any inconsistencies from reporting in prior years in Part VI.

The organization receives an unrestricted grant from an unrelated organization. The organization decides to use the grant to increase the amount of financial assistance it provides. The amount of the unrestricted grant isn't entered as direct offsetting revenue on line 7a, column (d).

Columns (e) and (f). Don't enter negative numbers. If the net community benefit expense is less than $0, enter “0.” Similarly, don't enter a negative percent in column (f), but enter “0.”

Group return filers. The “total expense” denominator for purposes of determining the percent of total expense for column (f) is the amount entered on Form 990, Part IX, line 25, column (A), of the group return.

Tip: Column (f), “Percent of total expense,” is based on column (e), “Net community benefit expense,” rather than column (c), “Total community benefit expense.” Organizations that enter amounts of direct offsetting revenue might also wish to enter total community benefit expense (Part I, line 7, column (c)) as a percentage of total expenses. Although this percentage cannot be entered in Part I, line 7, column (f), it can be entered on Schedule H (Form 990), Part VI, line 1.

2025 Instructions for Schedule H (Form 990) 3

Worksheets 1 through 8 give the definitions of community benefit to be used in completing Schedule H (Form 990), Part I, lines 7a through 7k. Use of the worksheets isn't required, and the organization can use alternative equivalent documentation, provided that the methodology described in these instructions (including the instructions for the worksheets) is followed. Regardless of whether the worksheets or alternative equivalent documentation is used to compile and enter the required information, such documentation should not be filed with Form 990 but must be retained by the organization to substantiate the information entered on Schedule H (Form 990). The worksheets or alternative equivalent documentation are to be completed using the organization's most accurate costing methodology, which can include a cost accounting system, cost-to-charge ratios, a combination thereof, or some other method.

If the organization is filing a group return or has a disregarded entity or an ownership interest in one or more joint ventures, the organization may find it helpful to complete the worksheets separately for the organization and for each disregarded entity, joint venture in which the organization had an ownership interest during the tax year, and group affiliate. In that case, the organization should combine all information from the worksheets for purposes of completing line 7. Complete the table by combining amounts from the organization's worksheets, amounts from disregarded entities or group affiliates, and amounts from joint ventures that are attributable to the organization's proportionate share of each joint venture, in the aggregation instructions under Purpose of Schedule, earlier.

See Worksheets 1 through 8 and specific instructions for the worksheets later in these instructions.