Medicare eligible Americans 65 years of age and older, and Medicaid eligible Americans in the low income brackets chive health care coverage under these plans, requiring health care organizations and providers to comply with regulatory guidelines and set standards, necessary for reimbursement. In the asses, fee of service became popular as a method used by payers to control costs.
But, it wasn’t until 2005, when the Deficit Reduction Act authorized the Centers for Medicare and Medicaid Services (SMS), offered up to further control Medicare costs by going from quantity of services provided for reimbursement, to a value-based purchasing (BP) method, measuring quality of are standards, for reimbursement.
Then in 2010, when the Affordable Care Act (AC), this effort increased awareness regarding the need for access to care, affordability of care, and quality of services, and a plan of implementation was developed by the AC initiators to work toward effectively financing the nation’s health care system, designed to lower costs, while providing quality of care (Zealand, Mecum, Click, & Thomas, p.
1-2, 2014). As a Clinical Case Manager, this author understands the value of controlling costs.
These efforts enacted by payers require institutions to develop more efficient business models and delivery of care systems, and managed care efforts help to control costs. Hospitals are focusing on standardizing a health care system to reduce expenditure and ensure accountability, through the managed care approach. By employing case managers to monitor inpatient clinical criteria, and reduce costs related to delays of care, these services help to limit costs the hospital would have to absorb.
Also hospitals are ensuring proper ACID-II coding protocol and billing/reimbursement processes to help control the hospital’s verbal expenses and better manage the hospital’s finances. Furthermore, insurance companies, and employers are offering reduction is premiums for beneficiaries who maintain a healthy weight and participate in wellness programs, to lower their financial payout related to the costs the payer’s costs, associated with the high costs of preventable disease and illnesses. . Explain the ramifications of allowing/disallowing an individual to be able to sue his or her HOMO. A HOMO is an agreement of a prepaid price for health care insurance and medical care coverage (Zealand, Mecum, Click, & Thomas, p. 38, 2014). This agreement is a legally binding contract between two parties, and therefore beneficiaries should have a clear understanding of the coverage plan prior to signing.
The truth is, Homos are not be all inclusive, and may not cover the costs related to all health care options available today. However, a HOMO should not limit the opportunities to necessary care. In the event a physician’s recommends a plan of care not covered under a HOMO, it is important the provider upholds their responsibility to provide those services, and in the meantime the provider and the patient should utilize the Homo’s appeal process to address any disputes.
Although the Employment Retirement Income Security Act of 1974 protects Homos, and limits an individual from suing their provider for failure to provide care, there is cause for concern when profit stands in the way of necessary health care (Barrier, 1999). The ramifications of disallowing an individual to sue his or her HOMO can still put the organization at risk for a lawsuit, when care needed was denied and lack of care resulted in serious health consequence from the negligence of necessary care.
It is this author’s belief that no entities should stand in the way of an individual’s right to seek counsel, regardless of outcome. The ramifications of not suing a HOMO could demonstrate no evidence to support efforts to amend the current law, and without legal documents demonstrating the consequences related to denial of care, the rights of patients, to ensure a safe and effective health care, according to standards of practice, may be compromised. 3. What are each of the financial statements commonly called in for-profit health care organizations and in not for-profit care organizations?
Financial statements in for-profit health care organizations and in not for-profit care organizations are commonly called statements of, balance sheet reports, operations, changes in net assets, and cash flows (Zealand, Mecum, Click, & Thomas, p. 28-68, 2014). Statement of operations of not for-profit health care organizations: 1. What is the analogous for-profit statement called? What are the main sections of the statement of operations? The analogous for-profit statement is a traditional income statement, but in a health care organization, it is called the statement of operations.
The statement of operations does not show cash flow, yet it reports revenue and expenses of a specific time period. The main sections of the statement of operations include a heading, the body of the report, and footnotes related to key information. The body of the report contains the following data: Unrestricted Revenue, Expenses, Operating Income, Inoperative Items, Excess of revenue over expenses, and Excess of revenue over expenses, net of noncontributing interest (Zealand, Mecum, Click, & Thomas, p. 28-55, 2014). 2. What are revenues, gains, and other support?
Revenues, gains, and other support are figures contained in the unrestricted revenue section off statement of operations report. Revenue includes amounts earned by the health care organization, the gains apply to profit of sales greater than the break-even value, and the other support are appropriations from unrestricted donations, and governmental entities (Zealand, Mecum, Click, & Thomas, p. 53, 2014). 3. What are expenses and losses? Expenses are a part of a statement of operations that include the total data related to the following categories: Salaries and wages, Employee benefits,
Contract labor, Supplies, Purchased Services, Depreciation and amortization, Occupancy, Medical claims and capitation purchased services, Interest, and other expenses. Losses are part of a statement of operations that include the total amounts related to inoperative items from the following categories: Investment (loss) income, Change in market value to include interest rate swaps of cash payments, Loss from early extinguisher of debt, Gain on bargain purchase and inherent contribution, and Other, including income taxes (Zealand, Mecum, Click, & Thomas, p. 60, 2014). 4.
Funds released from restricted net assets to unrestricted net assets are presented in what section of the statement of revenue, expenses and other activities? The funds released from restricted net assets to unrestricted net assets are presented in the unrestricted revenue section of the statement of revenue, expenses and other activities (Zealand, Mecum, Click, & Thomas, p. 55, 2014). Statement of changes in net assets: 1 . What is the traditional name for this statement? The statement of changes in net assets is called the balance work sheet report (Zealand, Mecum, Click, & Thomas, p. 28, 2014). . What is the purpose of this statement?
The purpose of the balance work sheet report is to address the assets, the liabilities and the net assets at a given time, related to stockholder’s equity (Zealand, Mecum, Click, & Thomas, p. 33, 2014). 3. What are the main sections of this statement? The main sections of the balance work sheet report include the following: Title, Assets, Current assets, Assets limited or restricted, Nonoccurrence assets, Liabilities, Current liabilities, Nonoccurrence liabilities, and the Net assets, also known as equity (Zealand, Mecum, Click, & Thomas, p. 32, 2014). . Discuss the difference between permanently restricted and temporarily restricted net assets.
Assets are considered the resources of a health care organization, and are of interest to the stakeholders, must be shown on a health care organization’s financial records. Net assets are represented as, the unrestricted, the temporarily restricted, and the permanently restricted categories, and each asset has its own conditions for use. There are differences between the permanently restricted and the temporarily restricted net assets as it relates to the donors. Permanently restricted assets assess limitations set by the donors, such as an endowment that specifies the exact use.
Temporarily restricted net assets are subjected to conditions that relate to time of use, such as a donation of land with a condition that it cannot be sold during the first five years of ownership (Zealand, Mecum, Click, & Thomas, p. 48-49, 2014). Statement of cash flows of a not-profit health care organization: 1. What are its main sections? The main sections of the cash flow report include the cash flows from operating activities, the cash flows from investing activities, the cash flows from financing activities, and the net increase or decrease in cash and cash equivalent (Zealand, Mecum, Click, & Thomas, p. 8, 2014). The purpose of the statement of cash flow demonstrates the accrual financial statement’s reported activities, as earned, and expensed, or obligated, and converts it into actual cash flow (Zealand, Mecum, Click, & Thomas, p. 68, 2014). 3. Where in the financial statements would there be important explanatory information? Important explanatory information is included in the cash flow statement at the bottom of the report (Zealand, Mecum, Click, & Thomas, p. 8, 2014). 4. In what financial statement would one identify the purchase of long-term investments?
One would identify the purchase of long-term investments in the second section of the cash flow financial statement (Zealand, Mecum, Click, & Thomas, p. 71, 2014). 5. How does the accrual basis of accounting differ from the cash basis of accounting? The accrual basis of accounting differs from the cash basis of accounting for the following reasons. The accrual basis accounting records the actual activity of the health care organization, matching the earnings when they are gained, and expensed when they are received, regardless of when the cash is transferred.
Cite this Financial Management Week
Financial Management Week. (2018, May 09). Retrieved from https://graduateway.com/financial-management-week/