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A/R From Third-Party Payors - A GAAP Refresher Print E-mail
Written by Jeffrey B. Kramer, CPA   
Monday, 12 March 2012 15:25

Generally Accepted Accounting Principles (or GAAP) govern how healthcare entities prepare their financial statements. GAAP is not a single accounting rule, but rather the aggregate of many rules on how to account for various transactions.

Most healthcare entities participate in payment programs that pay less than full charges for services rendered. Accordingly, there is often a delay in time between the date of medical service and the payment date. Making matters more complicated, many payments are subject to billing reviews, retroactive adjustments or other queries which may occur over a considerable period of time. As such, the lengthy period of time between rendering services and reaching final settlement, compounded by the complexities and ambiguities of reimbursement regulations, makes it difficult to estimate the ultimate amount of revenue earned from these programs.

GAAP accounting standards require service revenue and the related patient accounts receivable, including amounts due from third-party payors, to be reported net of contractual and other adjustments. Since amounts ultimately collectible will not be known until some future date, which may be months or years after services are provided, healthcare entities need to make estimates in order to record revenue and related patient receivables in the financial statements. The basis for such estimates may range from relatively straightforward calculations to highly complex judgments based upon assumptions about future events and decisions.

Accounting standards recognize that estimates are inherently uncertain and that outcomes may not ultimately occur as anticipated. Accordingly, such estimates are reevaluated each time financial statements are prepared. Any differences between original and current estimates are generally reported in the income statement in the period that the revisions are made rather than as an adjustment to the prior period.

Article by Jeffrey B. Kramer, CPA partner in charge of GSK Healthcare Accounting Advisors. Mr. Kramer can be reached at or 954.989.7462.
The Dysfunctional Medical Practice Print E-mail
Written by Wilma N. Torres, CPC   
Monday, 06 February 2012 07:28

Several years ago, we were engaged to transform a dysfunctional medical practice. No matter where we turned, there were issues, the largest of which was that the last patient appointment was set at 4:30 p.m. but the staff rarely left the office before 7:30 each night. Lunch was a juggling exercise because the morning patients were walking out as the afternoon patients were walking in. Understandably, patient frustration ran high and employee morale was almost nil. This series will explore four issues that contributed to the chaos and how they were resolved.                            

Click HERE to read Part I.  Click HERE to read Part II. 

Click HERE to read Part III.   Click HERE to read Part IV.

Click HERE to read part V. 

Learn more about the author, Wilma N. Torres, CPC.
Last Updated on Monday, 05 March 2012 10:59
Risk Contracting, v.2.0 Print E-mail
Written by Lawrence Schimmel, M.D., FACS   
Thursday, 26 January 2012 00:00

In the late 80s and through the 90s risk contracting was seen throughout our Florida market. Primary Care physicians or healthcare entrepreneurs working with a physician assumed partial or full risk for providing care to a subset of a health plan’s enrollees. The “risk taker” would then capitate specialty care and other services to minimize their risk. Success or failure depended on the ability of the primary care giver to manage the patient and control outpatient and hospital resources. Success if viewed through the bottom line depended on performing the right services at the right time in the right setting. Unfortunately, some risk takers viewed underutilization as a sure way to enhance the bottom line and quality of care issues would then arise. HEDIS reporting and NCQA accreditation requirements were measured to insure “quality care”. In some instances instead of full risk, “shared risk” arrangements developed between plan and risk taker and we can also remember the financial incentives for primary care physicians that were set in place to assure HEDIS compliance and patient satisfaction.

Does this all sound like something you have been hearing a lot about lately??

Let’s be clear, an ACO is little more than a risk contract with a lot of the bells and whistles now available to us with technology. There is nothing magical and mystical about this entity. The government has recently eliminated the need to take risk for those who choose to create and ACO and allows you as an ACO up to 50% of the savings. Should you choose to take risk you would be entitled to 60% of the savings. Who would want to take risk for an additional 10%?

So what we have is an entity with 5000 Medicare lives that will contract with providers, hospitals, and pharmacy and ancillary services to provide care to a specific set of patients. Should your cost of care over a period of time be less than that a similar group of non-ACO patients you will receive 50% of the savings. Your reporting requirements are tied into quality indicators that the government has identified which also tie into the meaningful use criteria as required in the HITECH Act for EHRs. Risk contracting v2.0 is the development of the ACO. At this time many patients are still cared for in our community under risk contracts from plan to provider. Those patients are part of some type of Medicare Advantage Plan. 

Why are ACOs being talked about so much? Large parts of our Medicare population are free agents, not part of any Medicare Advantage plan. Those are the patients that are targeted for ACOs. To the extent a primary care physician joins an ACO the patient will not really know any difference. The physician will refer to specialists and hospitalize as needed and all ancillary services will still be provided. The patient for all practical purposes will not notice any difference. Internally, all of the physicians, hospitals, ancillary services within a specific ACO will be linked electronically for reporting and financial purposes. Since the primary care doctor is the one who manages the care of his or her Medicare patients, the key component of any ACO is putting them together to meet the minimum criteria (5000 unaffiliated Medicare patients). This is very similar to the old-fashioned risk contracting of the 80s and 90s packaged differently. Since the final rules from CMS a few months ago regarding ACOs, risk is not even a requirement anymore. The battle about who should control the patient is now beginning. All of the stakeholders that are involved are jockeying for control of the patient and management of the ACO. Whether it is the managed care organization, the hospital, the physician, or the healthcare entrepreneur that prevails is yet to be determined. v. 3.0 is not far behind. Stay tuned.

Dr. Schimmel is a Principal at Marcum Healthcare.  You may contact the author at or 305.995.9801.

Last Updated on Monday, 13 February 2012 10:09
Meaningful Use Paying Off Print E-mail
Written by Digital Wire Service   
Thursday, 19 January 2012 00:00

According to the 2009 HITECH Act, physicians are eligible to receive up to $44,000 in total incentives per physician from Medicare for "Meaningful Use" of a certified Electronic Health Record (EHR) starting in 2011. Physicians reimbursed by Medicaid can receive up to $63,750 starting in 2011 based on state-defined guidelines. In July 2010, the Center for Medicare and Medicaid Services (CMS) released their rule for the Stage 1 Meaningful Use requirements that physicians need to meet in order to receive their Meaningful Use incentives.  A growing number of physicians are receiving their initial stimulus payments by demonstrating Meaningful Use.  Click HERE to read more.
Last Updated on Wednesday, 25 January 2012 18:41
FICPA Health Care Industry Conference 2012 Print E-mail
Written by Digital Wire Service   
Tuesday, 03 January 2012 00:00

Orlando, FL

Thursday, April 26, 2012 - Friday, April 27, 2012

Click HERE to learn more. 

The FICPA would like to thank the following sponsors for their support of the 2012 Health Care Industry Conference: 

ADP, AllTrust Insurance, CP Capital Securities, Inc., Crowe Horwath, LLP, Danna-Gracey, Deloitte & Touche, Elavon, Inc., Ernst & Young, FHIcomunications, Fifth Third Bank, Grant Thornton, HFA Partners, iAstros Healthcare Solutions, JPMorgan Chase, Kenneth Michael & Associates, Kerkering, Barberio & Co., KPMG, LarsonAllen, LLP, Mallah Furman & Company, PA, Moore Stephens Lovelace, P.A, Price Waterhouse Coopers.
Last Updated on Saturday, 28 January 2012 11:41
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