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At least 145 records · Page 8Linked to original sources
PubMed1996

Investing: reducing risks to enhance returns.

The financial assets of a healthcare organization can present many opportunities for investment. In order to develop a profitable investment program that avoids risky speculation, however, healthcare financial managers must fully understand the nature and risks of their organizations' investments. They must define and monitor their investment objectives, limitations, levels of acceptable risk and policies and conditions through a statement of investment policy and comprehensive investment guidelines.

Financial Audit↗
PubMed1996

A capital offense. 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 system's balance sheet, but few chief financial officers are actively managing those assets. In these turbulent times, how can CFOs neglect such a large chunk of their holdings?

Capital Financing↗
PubMed1996

Is your organization's tax-exempt status at risk?

Not-for-profit healthcare organizations benefit enormously from their tax-exempt status. But in recent years, the IRS, Congress, and state and local governments have begun scrutinizing these organizations in an effort to find potential sources of new tax revenue. Since the survival of an organization may depend on retaining its tax-exempt status, healthcare executives must be able to justify their organizations' status by developing a written charity care policy, promoting the concept of community benefit, reviewing physician recruitment and retention policies to identifying and reporting unrelated business income, and submitting a concise Form 990 tax return to the Federal government.

Charities↗
PubMed1997

Self-reporting Medicare and Medicaid overpayments.

Refunding a significant overpayment to the Medicare or Medicaid program can subject a healthcare organization to government scrutiny that can consume the time and energies of key staff members, risk potential litigation by shareholders, and possibly lead to severe sanctions. Delaying a refund, however, may precipitate even more costly consequences, such as triple damages and heavy monetary penalties. The government has stepped up its efforts to detect and punish fraud and abuse; therefore, providers should refund overpayments promptly. Failure to do so may constitute a crime, increase the likelihood of a whistleblower exposing the offense, or result in an increase in the amount of penalties imposed. Healthcare organizations can prevent overpayment abuses from occurring by following recommended procedures for making refunds, addressing underlying billing problems, and ensuring that senior management oversees the entire claims payment process.

Accounting↗
PubMed1997

Making unofficial inventory official. Financial managers who record and control unofficial inventory make the most of a valuable asset.

All healthcare organizations maintain supplies in their facilities that have not been booked as assets on their general ledgers. This unofficial inventory is often overlooked because it is not as significant a cost-driver as salaries and capital equipment. But unofficial inventory can affect an organization's bottom line when it is not reflected as an asset on statements of activities. Healthcare financial managers, working with their organization's materials managers, and other department personnel, can take steps to correct the problem of unofficial inventory by identifying locating, and controlling such inventory throughout the facility. Appropriate accounting procedures to handle the conversion of unofficial inventory to official inventory status also should be implemented.

Accounting↗
PubMedDate not supplied

Using APV (adjusted present value): a better tool for valuing operations.

Anyone who learned valuation techniques more than a few years ago is probably due for a refresher course. For the past 25 years, managers have been taught that the best practice for valuing assets-that is, an existing business, factory, product line, or market position-is to use a discounted-cash-flow (DCF) methodology. That is still true. But the particular version of DCF that has been accepted as the standard-using the weighted-average cost of capital (WACC)-is now obsolete. Today's better alternative, adjusted present value (APV), is especially versatile and reliable. It will likely replace WACC as the DCF methodology of choice among generalists. Like WACC, APV is used to value operations, or assets-in-place-that is, any existing asset that will generate a stream of future cash flows. Timothy Luehrman explains APV and walks readers through a case example designed to teach them how to use it. He argues that APV always works when WACC does-and sometimes when WACC doesn't, because it requires fewer restrictive assumptions. And APV is less prone to yield serious errors than WACC is. But, most important, general managers will find that APV's power lies in the managerially relevant information it provides. APV can help managers analyze not only how much an asset is worth but also where the value comes from.

Accounts Payable and Receivable↗
PubMed1997

Correct fair market value calculation needed to avoid regulatory challenges.

In valuing a physician practice for acquisition, it is important for buyers and sellers to distinguish between fair market value and strategic value. Although many buyers would willingly pay for the strategic value of a practice, tax-exempt buyers are required by law to consider only the fair market value in setting a bid price. Valuators must adjust group earnings to exclude items that do not apply to any willing seller and include items that do apply to any willing seller to arrive at the fair market value of the practice. In addition, the weighted average cost of capital (WACC), which becomes the discount rate in the valuation model, is critical to the measure of value of the practice. Small medical practices are assumed to have few hard assets and little long-term debt, and the WACC is calculated on the basis of those assumptions. When a small practice has considerable debt, however, this calculated WACC may be inappropriate for valuing the practice. In every case, evidence that shows that a transaction has been negotiated "at arm's length" should stave off any regulatory challenge.

Capital Expenditures↗
PubMed1997

Under the government microscope: how fraud and abuse allegations have taken the health care world by storm.

Hospitals are talking about it. Home health agencies are talking about it. Physicians are talking about it. The government and politicians are talking about it. And plenty of other people are talking about it, too. The subject is health care fraud and abuse, which often includes billing errors. As you may have heard, the United States Department of Justice has made fighting fraud and abuse within the nation's Medicare and Medicaid programs its No. 2 priority behind violent crime.

American Hospital Association↗