Finance

Article Dean Dorton

Success In Today’s Healthcare Industry Takes Great Accounting

Today’s healthcare industry faces numerous challenges, from the ongoing pandemic to sudden staffing shortages to declining revenues. And beyond these immediate forces, the healthcare industry as a whole is undergoing a transformation driven by things like technology, legislation, and consumer demand. So much changing all at once makes successes harder to sustain, even for providers and practitioners that have been secure in the past. An industry in flux will create new winners and losers. The question is how to stay on the winning side?

The Increasing Importance of Healthcare Accounting

Accounting is becoming increasingly important (and challenging) for everyone in healthcare. The economic disruption caused by the pandemic can’t be overstated. And while many providers have seen revenues fall, others have seen them surge, and in all cases they have defied expectations. Exceptional financial management becomes vital when costs and revenues continue to be unpredictable and forecasting of any kind feels unreliable.

Important as accounting may be, it comes with some significant challenges over and above those caused by Covid. There are massive compliance obligations at major hospitals, small medical offices, and everyone in between to keep data complete, secure, and transparent – and anything less leads to huge penalties. Keeping compliant while conducting accounting not just successfully but strategically becomes harder for anyone with multiple locations or multiple-entities of any kind. Other factors like staff turnover and manual processes only add to the hurdles of healthcare accounting.

It’s an overstatement to say that accounting determines success or failure in today’s (and tomorrow’s) healthcare industry. That said, every success will excel at accounting.

Effective Healthcare Accounting – 2 Key Components

More than just “getting good” at accounting, providers of all kinds will need to emphasize two key components. They help navigate turbulent, transformational times while being largely immune to staff and budget changes. Get these right:

  • Processes – The right accounting processes, policies, and procedures ensure that accounting meets the highest standards no matter who is conducting it or what’s happening around it. Clear and comprehensive policies will be important for keeping accounting compliant, efficient, and strategic even as the broader organization undergoes change. Policies will also keep accounting updated, integrated, and organized so that decision makers have the best financial insights available.
  • Tools – The right accounting software equips healthcare accountants with tools tailored to the challenges and opportunities of the present. More than a basic accounting toolkit, it has features relevant to the healthcare industry specifically and capabilities appropriate for any organization with mature financial responsibilities. Automation saves time, data integration extends visibility, and powerful analytics answer the unknown. This may mean replacing the outdated, under-powered, or irrelevant software in place right now.

Even knowing what needs to be done, improving accounting processes and tools won’t be easy for healthcare accountants with few resources to spare right now. That’s where Dean Dorton comes in. Our team includes experts in healthcare accounting, finance, and technology, any or all of whom can help healthcare providers take their accounting to where it needs to be – and beyond. Contact us.

Philip Massey,
Software Services Director
pmassey@ddaftech.com • 919.796.5408

Article Dean Dorton

On November 2, 2021, the CMS released the Calendar Year 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule. In this final rule, the civil monetary penalties (CMP) for noncompliance with the price transparency requirements will increase based on a bed count and some activities that present barriers to accessing machine-readable files will be prohibited.

The minimum CMP for noncompliance for hospitals with 30 or fewer beds will be $300 per day. An additional penalty of $10 per bed per day will be imposed to hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500. With these criteria, the minimum annual CMP will be $109,500 and the maximum CMP will be $2,007,500.

Many hospitals have been found to be noncompliant also with the requirement of access to machine-readable files, as CMS noted that some hospitals had embedded the file in websites without any ability for users to easily or directly download a single machine-readable file. CMS is now requiring that hospitals “must ensure the standard charge information is easily accessible, without barriers, including, but not limited to, ensuring the information is accessible to automated searches and direct file downloads through a link posted on a publicly available website.”

Price transparency rules of 2020 were delayed to 1/1/21, so CMS has the position that there is no reason for delay in complying. 

We are available to assist hospitals with meeting these Price Transparency requirements. Contact us for assistance.

Daniel Schoenbaechler, CPA, FHFMA
Healthcare Consulting Manager
dschoenbaechler@ddafhealthcare.com • 502.566.1097

Jay Swacker, CPA, CIA, CHC, CHDA
Healthcare Consulting Manager
jswacker@ddafhealthcare.com • 859.425.7691

Article Dean Dorton

The U.S. Department of Health and Human Services (HHS) is making $25.5 billion in new provider relief funding available to healthcare providers. The Health Resources and Services Administration (HRSA), an agency of HHS, administers the provider relief programs on behalf of HHS. HRSA is using a single application portal to make $8.5 billion in American Rescue Plan Act (ARP) Rural payments and $17 billion in Provider Relief Fund (PRF) Phase 4 General Distribution payments.

Providers must fall in to one of the following categories to be eligible:

a. Must have either directly billed, or owns (on the application date) an included subsidiary that has directly billed, their state/territory Medicaid program (fee-for service or managed care) or Children’s Health Insurance Program (CHIP) for health care-related services during the period of January 1, 2019 to December 31, 2020; or

b. Must be a dental service provider who has either directly billed, or owns (on the application date) an included subsidiary that has directly billed, health insurance companies or patients for oral health care-related services during the period of January 1, 2019 to December 31, 2020;

c. Must have either directly billed, or owns (on the application date) an included subsidiary that has directly billed, Medicare fee-for-service (Parts A and/or B) or Medicare Advantage (Part C) for health care-related services during the period of January 1, 2019 to December 31, 2020;

d. Must be a state-licensed/certified assisted living facility on or before December 31, 2020;

e. Must be a behavioral health provider who has either directly billed, or owns (on the application date) an included subsidiary that has directly billed, health insurance companies or patients for health care-related services during the period of January 1, 2019 to December 31, 2020;

f. Must have received a prior Targeted Distribution payment.

The application portal for Round 4 of provider relief funds opened this week. You can access it at the following website:

Application Portal

The deadline to complete the first step of the application process is no later than October 26, 2021.  Applications must undergo a number of validation checks before financial information is submitted so providers are encouraged to begin their application as soon as possible to ensure they are able to meet the deadline. Information on the documents and information needed to apply can be found in the resources following.

In order to streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application, and HRSA will use existing Medicaid, Children’s Health Insurance Program (CHIP), and Medicare claims data in calculating portions of these payments.

A sample application form can be found here:

Sample Application Form

The payment methodology for Phase 4 payments can be found here:

Payment Methodology

In addition to this, HHS released a series of new FAQ’s related to the provider relief funds.  A complete and up to date list of all FAQ’s can be found here:

FAQ

Please let us know if we can help you with anything provider relief fund related.

Lance Mann, CPA, CFE, CGMA
Assurance Director
lmann@deandortonstg.wpenginepowered.com • 502.566.1005

Adam Shewmaker, FHFMA
Healthcare Consulting Director
ashewmaker@ddafhealthcare.com • 502.566.1054

Article Dean Dorton

The Health Resources and Services Administration (HRSA) announced two important updates last week related to Provider Relief Funds (PRF) and Reporting Requirements:

  • $8.5 billion for providers that serve rural patients under the Medicare, Medicaid or Children’s Health Insurance Program (CHIP), and
  • $17 billion “for a broad range of providers who can document revenue loss and expenses associated with the pandemic.”
  • Implemented in order to help providers comply with PRF reporting requirements
  • Although HHS will not initiate collection activities or enforcement actions during the grace period, providers will still be out of compliance if reporting is not submitted by September 30, 2021
If you have questions about these two updates, please reach out to us for more information.

Questions? Contact Us!

Article Dean Dorton

Last week we reported that the Health and Human Services (HHS) Provider Relief Fund (PRF) Reporting Portal is open. Recipients of Provider Relief Funds must report on their use of these funds received prior to June 30, 2020 by September 30, 2021.  Today, HHS released new guidance for the audit requirements for PRF spending and lost revenue.  As a reminder, below is a table describing the deadline for using your Provider Relief Funds (and more information regarding reporting can be found here):

Deadlines for Use of Funds

Payment Received Period (Payments Exceeding $10,000 in Aggregate Received) Deadline to Use Funds
Period 1 Payments received April 10, 2020 to June 30, 2020 June 30, 2021
Period 2 Payments received July 1, 2020 to December 31, 2020 December 31, 2021
Period 3 Payments received January 1, 2021 to June 30, 2021 June 30, 2022
Period 4 Payments received July 1, 2021 to December 31, 2021 December 31, 2022

Audit Requirements

The new guidance released today clarifies that entities with fiscal years ending June 30, 2021 will be the first entities required to include Provider Relief Funds on their Schedule of Expenditure of Federal Awards (SEFA) and thus, be subject to audit of these funds. Entities with other fiscal year ends will include some or all of their Provider Relief funds on their next fiscal year end.

For example, if you are a December 31, 2021 year end, then you will include all funds from Periods 1 and 2 (described above) in your SEFA and your December 31, 2022 SEFA will include periods 3 and 4. Below are the specific FAQs that released by HHS. 

When should Provider Relief Fund expenditures and/or lost revenue be reported on a nonfederal entity’s Schedule of Expenditures of Federal Awards (SEFA)? (Added 7/15/2021)

Non-federal entities will include Provider Relief Fund expenditures and/or lost revenues on their SEFAs for fiscal year ends (FYEs) ending on or after June 30, 2021. Please refer to the 2021 OMB Compliance Supplement for additional information.

How will a non-federal entity determine the amount of expenditures and/or lost revenues to report on its SEFA for FYEs ending on or after June 30, 2021? (Added 7/15/2021)

A non-federal entity’s SEFA reporting is linked to its report submissions to the Provider Relief Fund Reporting Portal. Therefore, the timing of SEFA reporting of Provider Relief Fund payments will be as follows:

  • For a FYE of June 30, 2021, and through FYEs of December 30, 2021, recipients are to report on the SEFA, the total expenditures and/or lost revenues from the Period 1 report submission to the Provider Relief Fund Reporting Portal.
  • For a FYE of December 31, 2021, and through FYEs of June 29, 2022, recipients are to report on the SEFA, the total expenditures and/or lost revenues from both the Period 1 and Period 2 report submissions to the PRF reporting porta Provider Relief Fund Reporting Portal l.
  • For FYEs on or after June 30, 2022, SEFA reporting guidance related to Period 3 and Period 4 will be provided at a later date.

As discussed in the FAQs above, we will need to wait for the FY2021 OMB Compliance Supplement to be released later this summer for more information.

Questions? Contact Us!

Article Dean Dorton

As of the morning of July 1, 2021, the Health and Human Services (HHS) Provider Relief Fund (PRF) Reporting Portal is open. There are a few new resources of the portal that may help you through the Provider Relief Fund reporting process, which are also linked below. Further guidance was released to provide more detailed information on how to use the reporting portal.

Additional resources:

Reporting Time Periods (Updates – June 2021)

Provider Relief Fund recipients are required to report in each Payment Received Period in which they received one or more payments exceeding, in the aggregate, $10,000, as indicated in the table. Reporting must be completed and submitted to Health Resources and Services Administration (HRSA) by the last date of the reporting time period. Provider Relief Fund recipients that do not report within the respective reporting time period are out of compliance with payment Terms and Conditions and funds may be subject to recoupment.

Payment Received Period (Payments Exceeding $10,000 in Aggregate Received) Reporting Time Period
Period 1 Payments received April 10, 2020 to June 30, 2020 July 1, 2021 to September 30, 2021
Period 2 Payments received July 1, 2020 to December 31, 2020 January 1, 2022 to March 31, 2022
Period 3 Payments received January 1, 2021 to June 30, 2021 July 1, 2022 to September 30, 2022
Period 4 Payments received July 1, 2021 to December 31, 2021 January 1, 2023 to March 31, 2023

LanceMann, CPA, CFE, CGMA 
Assurance Director
lmann@deandortonstg.wpenginepowered.com • 502.566.1005