Capital PPS transition period affects timing differences.

Abstract

The Health Care Financing Administration's new capital payment system means hospitals face timing differences in their financial statements. A hospital's 10-year transition into the new system could involve a switch from the hold-harmless payment method to the fully prospective method. To maximize the recoverability of deferred assets and liabilities, hospitals should understand the details of both methods and how changes in third-party payment programs can affect timing differences.