FAR - NFP - HealthCare Orgs Flashcards
Types of HCOs
Hospitals, nursing homes, medical groups, clinics, home health agencies, rehab centers, HMOs, assisted living
HCO Legal structure
NFP:
- religiously affiliated
- community based
- private university
Private
- investor owned
- for profit
Public:
- Federal, state, municipal
- County/Parish
- Public University
HCO GAAP
NFP:
- FASB
- Contributions
- No equity
Private:
- FASB
- No contributions
Public:
- GASB
- Gov’t transactions
- Enterprise Fund (usually)
Gov’t Hospital Funds
- Unrestricted general fund
Donor - restricted fund:
- specific purpose
- plant replacement & expansion
- endowment
Revenues
Patient Service
- Daily Patient services
- Other nursing services
- Other professional services
Premium fees
- based on agreement to provide services for specific fee (medicare, HMOs, capitation fees)
Resident service fees
- equip rentals @ nursing home
Other revenues
- derived from ongoing activity other than patient services (visitor meals)
Net Patient revenues - Deductions / Adj.
Gross Patient Service Revenue
Less (deductions) :
- charity services
- contractual adjs
- uncollectible accounts (public HCO)
DON’T DEDUCT BAD DEBT EXPENSES
Charity Care
Services to persons who demonstrated inability to pay
Never expected to be collected
Not recognized as revenue, receivable, or bad debt
Contractual adjs
initially record revenue @ gross w/ contractual adjs recorded to contra-revenue
Bad Debts
NFP:
- revenues @ gross
- Bad debt expenses
Public:
- Revenues net of adj. for uncollectible amounts
- no bad debt expense
Gains
not part of primary activities:
- sales of invest. in secs
- sales of capital assets
- gifts/donations
Expense
Report by function
- nursing (patient care)
- professional (labs/radiology)
- general (dietary, nonmedical)
- fiscal (admission, acct)
- admin (executive)
- natural expense
NFP Healthcare Org Financials
1) Statement of Financial Position (B/S)
2) Statement of Operations
3) Statement of Changes in Net Assets
4) Statement of Cash Flows
Public (Gov’t) Hospitals Financials
1) Statement of Net Position (B/S)
2) Statement of Revenues, Expenses, & Changes in Net Position
3) Statement of Cash Flows
NFP Health Care Org Equity
1) Unrestricted Net Assets
2) Temp Restricted Net Assets
3) Perm. Rest. N/A
Public (Gov’t) Hospital Equity
1) Net Invest. in Capital Assets
2) Rest. Net Position
3) Unrest. Net Position
Gov’t Hospital - Statement of CFs
1) direct method required
2) 4 categories (similar to proprietary funds)
3) no distinction made between unrestricted & restricted CFs
Nongov’t NFP Hospital Reporting
- Follow FASB
Similarities w/ gov’t reporting found w/
- patient service revenues
- charity services
- deductions from revenues (except for bad debts)
- premium fee revenues
true/false
Cash Flows from Noncapital Financing Activities and Cash Flows from Capital and Related Financing Activities are required sections of the cash flow statement for governmental healthcare agencies.
Not-for-profit healthcare agencies report cash flows from financing activities (a single category)
True
capitation fees
Payments made to health care providers for comprehensive client coverage provided for a fixed fee; e.g., HMOs
How is charity care recognized in the financial statements of a not-for-profit hospital?
It is not recognized. (Not as revenues, receivable, or bad debt in the financial statements of a not-for-profit hospital.) Charity care is reported in the notes to the financial statements, however.
How are “contractual adjustments” reported by health care organizations?
Contractual adjustments are a contra account deducted from patient service revenues in deriving net patient service revenues, which is the first line in the statement of operations for a health care organization
