1. (a) Annual report of the community benefits plan.

   1. (1) The annual report of the community benefits plan may be filed with the department on a hospital or hospital system basis.
   2. (2) For fiscal years ending prior to January 1, 1998, a nonprofit hospital or hospital system shall file an annual report of the community benefits plan, as required by Health and Safety Code, §311.046 as it existed prior to 1997 legislative amendments made by SB 788, with the department no later than 120 days after the hospital's or hospital system's fiscal year ends. For fiscal years ending on or after January 1, 1998, a nonprofit hospital or hospital system shall file an annual report of the community benefits plan with the department no later than April 30 of the following year.

   3. (3) The nonprofit hospital's or hospital system's annual report of the community benefits plan must include, at a minimum:

      1. (A) the hospital's or hospital system's mission statement;
      2. (B) a disclosure of the health care needs of the community that were considered in developing the community benefits plan;
      3. (C) a disclosure of the amount and types of community benefits, including charity care, actually provided. Charity care shall be reported as a separate item from other community benefits;
      4. (D) a statement of its total operating expenses computed in accordance with generally accepted accounting principles for hospitals from the most recent completed and audited prior fiscal year of the hospital; and
      5. (E) a completed worksheet that computes the ratio of cost to charge for the fiscal year referred to in subparagraph (D) of this paragraph and that includes the same requirements as Worksheet 1-A adopted by the department in August 1994 for the 1994 "Annual Statement of Community Benefits Standard."
   4. (4) For fiscal years ending prior to January 1, 1998, the nonprofit hospital's or hospital system's annual report of the community benefits plan must include the items listed in paragraph (3)(A), (B) and (C) of this subsection. For fiscal years ending on or after January 1, 1998, the nonprofit hospital's or hospital system's annual report of the community benefits plan must include the items listed in paragraph (3)(A)-(E) of this subsection.
   5. (5) For fiscal years ending on or after January 1, 1998, in addition to the annual report of the community benefits plan, a nonprofit hospital or hospital system shall file a completed worksheet as required by paragraph (3)(E) of this subsection no later than ten working days after the date the hospital or hospital system files its Medicare cost report.

2. (b) Annual statement of community benefits standard.

   1. (1) The annual statement of community benefits standard may be filed with the department on a hospital or hospital system basis.

   2. (2) For fiscal years ending prior to January 1, 1998, a nonprofit hospital or hospital system shall file an annual statement with the department no later than 120 days after the hospital's or hospital system's fiscal year ends. For fiscal years ending on or after January 1, 1998, a nonprofit hospital or hospital system is required to file an annual statement with the department no later than 120 days after the hospital's or hospital system's fiscal year ends; however, the department will accept the annual statement as part of the acceptance of the annual report of the community benefits plan. The annual statement filed under this subsection shall be based on the most recently completed and audited prior fiscal year of the hospital and shall state which of the standards for providing community benefits has been satisfied. A nonprofit hospital or hospital system may elect to provide community benefits according to any of the following standards:

      1. (A) charity care and government-sponsored indigent health care are provided at a level which is reasonable in relation to the community needs, as determined through the community needs assessment, the available resources of the hospital or hospital system, and the tax-exempt benefits received by the hospital or hospital system, and other factors that may be unique to the hospital or hospital system, such as the hospital's or hospital system's volume of Medicare and Medicaid patients;
      2. (B) charity care and government-sponsored indigent health care are provided in an amount equal to at least 100% of the hospital's or hospital system's tax-exempt benefits, excluding federal income tax; or
      3. (C) charity care and community benefits are provided in a combined amount equal to at least 5.0% of the hospital's or hospital system's net patient revenue, provided that charity care and government sponsored indigent health care are provided in an amount equal to at least 4.0% of net patient revenue.
   3. (3) For purposes of satisfying paragraph (2)(C) of this subsection, a hospital or hospital system may not change its existing fiscal year unless the hospital or hospital system changes its ownership or corporate structure as a result of a sale or merger.
   4. (4) A nonprofit hospital or hospital system shall use the annual statement of community benefits standard form and accompanying worksheets developed by the department for reporting under this section. Hospitals electing to report on a system basis shall consolidate the individual hospital information into a single annual statement of community benefits standard form for the system. A separate set of worksheets shall be completed for each individual hospital included in the system.
   5. (5) The department will accept written revisions of the annual statement of community benefits standard for 30 days after the filing date.
   6. (6) A nonprofit hospital that has been designated as a disproportionate share hospital under the state Medicaid program in the current fiscal year or in either of the previous two fiscal years shall be deemed in compliance with these standards.
   7. (7) A hospital that satisfies paragraphs (2)(A) or (6) of this subsection shall be excluded in determining a hospital system's compliance with the standards provided in paragraph (2)(B) and (C) of this subsection.

   8. (8) Under the Tax Code, §171.063(a)(4), a requirement that a nonprofit hospital provide charity care and community benefits in order to be exempt from franchise tax may be satisfied by a donation of money to the Texas Healthy Kids Corporation established by the Health and Safety Code, Chapter 109, provided that:

      1. (A) the money is donated to be used for a purpose described by the Health and Safety Code, §109.033(c); and
      2. (B) not more than 10% of the charity care required under any provision of the Tax Code, §171.063(a), may be satisfied by the donation.

3. (c) Reporting.

   1. (1) The department shall notify nonprofit hospitals in writing that the annual report of a community benefits plan and the statement of community benefits standard must be filed in accordance with these rules.
   2. (2) Nonprofit hospitals changing to a hospital system reporting basis shall report for a continuous period of time.
   3. (3) All hospitals or hospital systems shall report as required under this title if the hospital or hospital system, for the previous fiscal year, reported as a nonprofit hospital or hospital system under §13.15 of this title (relating to Survey Forms).
   4. (4) All hospitals or hospital systems shall report any change of ownership which may effect the nonprofit status of the hospital or hospital system to the Bureau of State Health Data and Policy Analysis at the department.

   5. (5) Each nonprofit hospital or hospital system shall report the following information to the department:

      1. (A) the hospital's mission statement;
      2. (B) a disclosure of the health care needs of the community that were considered in developing the hospital's community benefits plan pursuant to §311.044(b) of Chapter 311;
      3. (C) a disclosure of the amount and types of community benefits, including charity care, actually provided. Charity care shall be reported as a separate item from other community benefits;
      4. (D) a statement of its total operating expenses computed in accordance with generally accepted accounting principles for hospitals from the most recent completed and audited prior fiscal year of the hospital;
      5. (E) a completed worksheet that computes the ratio of cost to charge for the fiscal year referred to in subparagraph (D) of this paragraph and that included the same requirements as Worksheet 1-A adopted by the department in August 1994 for the 1994 "Annual Statement of Community Benefits Standards";
      6. (F) the amount of charity care provided;
      7. (G) the amount of government-sponsored indigent health care provided;
      8. (H) the amount of community benefits provided;
      9. (I) the amount of net patient revenue and the amount constituting 4.0% of net patient revenue;
      10. (J) the dollar amount of the hospital's or hospital system's charity care and community benefits requirements met;
      11. (K) the amount of tax-exempt benefits provided, if the hospital is required to report tax-exempt benefits under subsection (b)(2)(A) or (B) of this section; and
      12. (L) the amount of charity care expenses reported in the hospital's or hospital system's audited financial statement.
4. (d) Posting of sign. Nonprofit hospitals shall prepare a statement notifying the public that the annual report of the community benefits plan is public information, that it is filed with the department, and that it is available on request from the Bureau of State Health Data and Policy Analysis, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756. The statement must indicate the report's availability date and be posted in prominent places throughout the hospital, including, but not limited to, the waiting areas of the emergency room and the admissions office. Nonprofit hospitals shall also print the statement in the patient guide or other materials that provide the patient with information about the hospital's admissions criteria.
5. (e) Charity care notice. Each hospital shall provide, to each person who seeks any health care service at the hospital, notice, in appropriate languages, if possible, about the charity care program and how to apply for charity care. Such notice shall also be conspicuously posted in the general waiting area, the waiting area for emergency services, in the business office, and in such other locations as the hospital deems likely to give notice of the charity care program.
6. (f) Exemptions. A nonprofit hospital is exempt from the reporting requirement in subsection (c) of this section if the hospital is located in a county with a population under 50,000 and in which the entire county or the population of the entire county has been designated as a "health professional shortage area" during the current or any previous fiscal year and has continued to maintain that designation.

7. (g) For purposes of this section only, a nonprofit hospital shall include a nonprofit hospital as defined in §13.13 of this title (relating to Definitions) and:

   1. (1) a Medicaid disproportionate share hospital; or
   2. (2) a public hospital that is owned or operated by a political subdivision of municipal corporation of the state, including a hospital district or authority.

Source Note:The provisions of this §13.17 adopted to be effective February 23, 1994, 19 TexReg 921; amended to be effective February 28, 1996, 21 TexReg 1282; amended to be effective May 10, 1998, 23 TexReg 4269.