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Hospitals are facing an increase in exposure to federal auditors, investigators, and various government contractors that scrutinize many parts of hospital operations. These entities have the ability to analyze data [...]

The Centers for Medicare & Medicaid Services (CMS) recovery audit contractors (BAC) program looms large over healthcare facilities, and with good reason: Of the nearly $1 billion in overpayments recovered [...]

The Centers for Medicare and Medicaid Services' (CMS) permanent recovery audit contractor (RAC) program will begin its nationwide rollout this year, and is required to be in place in all [...]

How can point-of-service collection be considered a success if you don't collect? Just ask Lorraine Schnelle, executive vice president, Bridgefront, whose organization provides online training in revenue cycle management, among [...]

For acute-care hospital billing, each field on the UB-04 claim form is important, but few carry as much compliance risk as the "service units" field, which is found at field [...]

This study examines the association between cost-system functionality, managers' beliefs about the relevance and usefulness of cost data, and actual financial performance using a sample of 277 US hospitals. Results indicate that managers' evaluations of the relevance and usefulness of cost data are positively correlated with the extent to which systems can provide greater cost detail, better classify costs according to behavior, and report cost information more frequently. However, only the ability to supply cost detail is favorably associated with measures of financial performance, including operating margin, cash flow, and administrative expense. Interestingly, cost-system design was not associated with operating expense per admission, suggesting that accounting information had not yet been successfully used to manage clinical costs.

Hospitals are eligible for and receive Medicaid disproportionate share hospital (DSH) payments for caring for the indigent/uninsured; however, county hospitals may also be obligated to transfer these funds to the [...]

Revenue performance management requires an understanding of an integrated model that encompasses the people, processes, and systems that facilitate the flow of patient data along each step of the revenue [...]

Denied payment of claims submitted to managed care organizations is a problem that touches virtually all providers that participate in managed health plans. The impact of denied claims on operating [...]

Issues concerning the budgeting system used at a large public New Zealand hospital are examined, focusing on providing an analysis of the casemix technology used in the system. Topics include management reporting, the relationship between accounting data as inscription and the organization of accumulated knowledge, variance analysis, and remote management.

The application of activity-based costing (ABC) by the Valley View Hospital in Glenwood Springs, CO, is discussed. ABC is used to determine the total cost of operating room procedures by incorporating costs such as direct labor, supplies, equipment and administrative costs. Three cost reports are then generated for use by management in performance reviews, strategic planning and managed care contract negotiations and contract management., In today's health care environment, the hospital cost accounting system should accomplish three aims. The cost accounting system should accomplish cost efficiency without a negative impact on the quality of [...]

Changes in Medicare reimbursement have resulted in new hospital policies regarding patient classification and division of costs. In 1983, Medicare began using fixed rates to pay hospitals for inpatient care, but continued to reimburse outpatient care based on cost. A study of Washington State hospitals shows that subsequent outpatient services to Medicare patients, as compared to non-Medicare patients, greatly increased in an effort to improve the hospitals' financial earnings. Hospitals also increased overhead cost allocations to outpatient services departments after the Medicare changes, resulting in improved financial performance.

Service businesses required to use the accrual method of accounting do not have to accrue amounts that, in their experience, will be uncollectible. The Temporary Regulations that provide the appropriate formulas contain an inherent bias against taxpayers, such as hospitals, that do not write off their unpaid accounts receivable in short order The limitations of the formulas became an issue in the Tax Court for the first time in one of its Hospital Corporation of America opinions.

The chief financial officers (CFOs) of hospitals are overlooking the value of their hospitals' real estate assets despite the fact that real estate assets typically comprise between 35% and 50% of a hospital's assets. Statistics from the Center for Healthcare Industry Performance Studies indicates that hospitals have approximately $200 billion in real estate assets, which makes it critical that CFOs effectively manage those assets., CFOS OVERLOOK THE VALUE OF HOSPITALS' REAL ESTATE ASSETS Healthcare providers are sitting on billions of dollars in assets. Real estate holdings constitute 35% to 50% of a typical healthcare [...]

A study was conducted to examine the informativeness of operating statements for commercial nonprofit enterprises. Results show that users of the profit and loss statements of nonprofit hospitals might consider them to be significantly more informative if enough disclosures were provided about payments to physicians. To a certain extent, the true surpluses are underreported because quasi-dividends are treated as part of the controlling physicians' pay.

This article reexamines the use of costing information in hospitals. While previous research reports that hospitals are increasingly adopting costing methodologies, survey results indicate that costing systems and cost methodologies have not been widely implemented. A telephone survey of 94 hospital executives revealed only 26 percent routinely collect procedure-level costs and only 12 percent apply basic costing techniques described in prior health care management literature. It appears that despite cost accounting's benefits, immediate cost-control problems are answered with short-term, focused cost-cutting solutions. While these short-term measures allow hospitals to survive in the current environment, health care reform and other pressures to control revenue growth will make sophisticated cost management a necessity for hospitals in the near future., Hospitals are beginning to adopt cost accounting methodologies, but only on a limited scale. A survey reveals that 26% of 94 institutions regularly collect procedure-level costs, and only 12% use elementary costing techniques, settling for ad hoc methods instead. Cost accounting at hospitals will be mandatory in a reformed healthcare environment., With hospital costs on the rise, margins on the decline, increasing sophistication of managed care contracting, and new proposed national and state legislation, hospitals are undergoing cost-cutting, layoffs, and extensive [...]

Activity based costing (ABC) systems can help hospitals meet the challenges presented by integrated delivery systems and managed care. ABC systems allow hospitals to focus on product-line management, cost efficiency and continuous improvement. By emphasizing cost drivers and activity analysis, ABC systems can improve the measurement and understanding of costs. Information on the practical application of ABC systems is included., The glare from the lights of proposed health care reforms has left the whole health care industry on the defensive. Although it is difficult to predict the precise outcome of [...]

Objectives--To assess and improve the quality of care provided to women undergoing induced abortion. Design--Two rounds of prospective, criterion based case note review audit. Setting--Ten NHS gynaecology units throughout Scotland. […]

The Thomas Jefferson University Hospital in Philadelphia, PA, successfully used its cost accounting system to assess the financial impact of a new and costly drug called Zofran. The 700-bed medical center's clinical financial management system was utilized to identify three patient groups for the cost analysis. Costs and utilization data among the three groups were then compared, showing that the drug's introduction at the hospital did not effect any substantial increase in total hospital costs.

Hospitals will experience much difficulty in discharging their financial obligations unless they devote proper attention to accounts receivable management (ARM). Recognizing this and the effects of changes in healthcare reimbursement rules and practices on ARM, the Sisters of Charity of the Incarnate Word Healthcare System (SCH) launched a systemwide initiative aimed at achieving excellence in ARM. The program proved to be a resounding success. A large percentage of healthcare centers were able to meet the 1993 target for days revenue in AR one year in advance, days of gross revenue in gross AR were reduced by 15 days, while patient revenues rose by 15%

The accounting profession relies on random and unpredictable auditing techniques. The study examines whether predictable auditing is more effective as regards to Medicare audits in hospitals. The US Medicare programme was established in 1965 to allow financial reimbursements for hospitals. A sample of profit and non-profit making psychiatric hospitals were examined in between 1985-87. The results show that a predictable audit model has a 61% success rate in forecasting variables, such as bed size, the number of patients, ownership type and chain affiliation.

Many hospitals are in the process of changing to the new UB-92 format for electronically billing Medicare, and all hospitals must switch over by Apr 1994. Some are voluntarily changing to the even more advanced ANSI 837, a standardized format that may become mandatory in the future. The Workgroup on Electronic Data Interchange recommends its use by all payers and urges an end-of-1994 deadline. Each change requires reprogramming of hospitals' computer systems, so going directly to the ANSI 837 is more cost effective. Some facilities have already switched to the UB-92.

The effects of the implementation of the prospective payment system (PPS) on the hospital's accounting systems are examined. Results show that hospitals were positively affected by the PPS implementation. Ninety seven percent of hospitals experienced sophisticated changes in their cost accounting systems while 94% instituted cost and volume containment programs which enhanced efficiency and effectiveness of healthcare services. In addition, it was determined that the most commonly used and comprhensive standard cost systems in hospitals include microcosting, relative-value units, patient-acuity costing and cost-to-charge ratios.

The American Institute of Certified Public Accountants (AICPA) has released the Audit of Providers of Health Care Services, which outlines new reporting requirements for hospital providers and auditors. Reporting patient service revenues, an a controversal issue during the revision of the AICPA's hospital audit guide, is one of the new requirements. Initial reactions showed that hospital providers and auditors have not reached a consensus as to what is useful information and what the effects of the new audit guide will be.

Hospital billing and pricing practices are drawing increasing heat from lawmakers, employers--and consumers. In fact, these administrative functions are the leading cause of the public's dissatisfaction with hospitals today, experts [...]

The turn of the 20th century and the late 1960s and 1970s were marked with several transformations in accounting techniques for US hospitals. The development of accounting thought and practice as a result of these transformations is examined in a historical and social perspective. Data was derived from two Boston hospitals, Massachusetts General Hospital and Boston City Hospital. Cost control measures in accounting practices characteristic of the 1960s were also evident during 1983. This year was marked by cost effective accounting practices that were technologically innovative, as illustrated by Medicare's implementation of a prospective payment system for its diagnosis related group. Discursive structures were used in the analysis of these accounting transformations.

The relationships among government, industry, and accounting policy were investigated by studying the effects of merger and acquisition accounting in hospitals. Political antecedents, distributional consequences, and organizational consequences of accounting policies used by the Medicare health insurance system were studied. Organizational and political theory were used to explain the effects of state accounting policy in hospitals. The results indicated that Medicare capital payments were increased by approximately $2.4 million in 1981 by merger and acquisition accounting, and that cost-based contracting legitimized state welfare legislation and reproduced existing relations of production and distribution.