Uncollectible Accounts within the Healthcare forum is inevitable, there are various types of uncollectible accounts; the difference is if the outcome the account will have on the business and how the uncollectible account is defined to avoid implications in accounting or retro repercussions during an audit. In this paper, I will discuss the difference between charity care and bad debt within the healthcare sector, additionally, I will confer the implications healthcare facilities face with gross uncollectibles when completed incorrectly, finally I will explain proper organizational methods of uncollectible accounts and the methods by which accounts should be placed. Charity care is defined services rendered with for no charge, little charge, In this paper, I will discuss the difference between charity care and bad debt within the healthcare sector, additionally, I will confer the implications healthcare facilities face with gross uncollectibles when completed incorrectly, finally I will explain proper organizational methods of uncollectible accounts and the methods by which accounts should be Bad Debt is the conventional term used in accounting; since the rules have changed for healthcare organizations, Bad Debt is referred to recorded as “Allowance for Bad Debt”. Bad is actually a term used to identify monies that are not collected for services in any discipline. Financial Services Personnel play a critical role in accounting processes due to accounting deals with cash flows, in turn, determines the financial position of the organization. The process by which recordings are made is essential to an organization, further proper processes within the Financial Services department impedes mistakes, and aid in combatting fraud. Financial Services Personnel play a crucial role in categorizing uncollectible accounts, generally when an uncollectible account is deemed uncollectible Financial Services Personnel use a method known as the direct write-off method, a method used to write-off bad debt after the organization has made all necessary attempts to collect the monies owed. Uncollectible accounts must be recorded, recording allows for accurate categorization and assist with accessibility during an audit. There are several ways recordings can take place keeping a journal or log or most preferably electronically. One essential component Financial Services Personnel must adhere to when categorizing uncollectible accounts is the allowances for uncollectible
...t them attain the services easily and at lower costs. In addition, these hospitals have the potential of managing effectively their cash flow. A fixed and proper payment system to the workers of the small health centers can m motivates them to avail quality services to the medical beneficiaries. Small hospitals can be able to have bonus payment in case they provide care in areas short of professional health. Hence, small hospital can implicate appropriately their method of payment. Conversely, there might be a risk possibility when it comes to accessing low amount due to the nature of the illness of the patients, the involvement of high cost of treatment amongst many other factors. In the vent that the overall health care costs are more than earlier anticipated, the hospital and the doctor shall receive less profits. This can have a negative impact on the hospital.
On the basis of the clinic’s previous collections experience, Dough was able to convert billings for medical services into actual cash collections. On average, about 20% of the clinic’s patients pay immediately for services rendered. Third-party payers pay the remaining claims, with 20% of the payments made within 30 days and the 60% remainder (of total billings) paid within 60 days. For monthly budgeting purposes, 20% are assumed to be collected one month after the billing month, and 60% are assumed to be collected two months after the billing month.
First, let us analyze General Practice Affiliates’ current financial position. The income and expenses report shows a net revenue of $230,250. The net revenue is obtained after expenses, including taxes, of the company have been subtracted from revenue (Paterson, 2014, p. 124). The balance sheet shows a $306,180 in retained earnings. Retained earnings represent stakeholders’ equity (Paterson, 2014, p. 128). Retained earnings are usually invested back in the form of inventory or debt payments (Albrecht, Stice, Stice , & Swain, 2008). General Practice Affiliates’ cash flow analysis shows that the practice invests in new equipment. However, General Practice Affiliates mainly used cash during 2012. The main source of cash from operations came from depreciation expense, which is not a reliable source of funding (Paterson, 2014, p. 130). Accounts receivable increased by $50,000, while accounts payable only increased by $10,000. In addition, cash flow analysis shows a balance sheet data that is affected by future transactions (Paterson, 2014, p. 128). General Practice Affiliates choose to stretch the time to pay suppliers instead of paying its bills. ...
Buchbinder, S. B., & Shanks, N. A. (2007). Managing Costs and Revenues. In (Ed.), Introduction to Healthcare Management ( ed., p. pp. -). : . []. doi: Retrieved from
As of April 1, 2010, many changes in the health care structure is changing. Many of these changes are reorganizing the responsibilities of who makes the decisions on how services are commissioned, the way money is spent and issuing more involvement from local authorities and opening up comp...
Any UK government is faced with a long list of health issues, this list would include macro questions such as the relationship of the National Health Service (NHS) to broader policies which might affect the health of the population and how to finance and staff health services. The NHS has gone through many stages of development in the last century, however the 1990 act introduced the most radical accounting control system since the birth of the NHS. Much accounting research has been developed on this topic and this paper will bring together some of their findings.
Varying in size, these companies act as a middleman between the patient and the medical facility finance office. All having slight variations, the abundance of insurers can cause confusion and often times incorrect billing. Insurance companies unlike individuals are able to negotiate a discounted payment with the hospital, but at a steep price. Of the considerable amount of money the United States put into the health industry, 35% of it went to paying for administration cost of both the insurer and the hospital (Brill,Steven, pg.34-43, Time). It should be no surprise then that the United States leads the world in every category of health care cost, often times charging twice more than the second most expensive country.
The stereotypical image correlated to the account mirrors that of a public accountant. An individual working as a public accountant can expect to work as an independent third party to a multitude of companies. As this third party it is their duty to oversee financial transactions to ensure that the statements of not only the company, but also its’ supporting companies, correctly correspond and match up to the position, results and cash-flow of the clientele. This general quota outlining a public accountants job description is not the same for a private accountant. The main difference between a public and private accountant is that unlike the public and its handle on a multitude of accounts, a private accountant specializes with a certain company or field. With this specialization, a private accountant tackles setting up a system that records the transactions within the business. The recordation of the transactions is then generated into statem...
In order to fully understand the uninsured and underinsured problem that hospital administrators face the cause must be examined. The health outcomes of uninsured individuals are generally worse than those who are insured. Uninsured persons are more likely to experience avoidable hospitalizations, diagnosed at later stages of disease, hospitalized on an emergency or urgent basis, and more seriously ill upon hospitalization (Simpson, 2002) Because the uninsured often lack an ongoing relationship with a health-care provider, they are less likely to receive preventive care and diagnostic tests (Kemper, 2002). Many corporations balance their budget through cost cuts and other moves, but have been slammed with an increasing load of uninsured patients, coupled with reduced payments from government and private insurance programs. In 2000, 564,476 uninsured patients came through Health and Hospitals Corporations health care centers, a 30 percent increase from 1996. In the same period, Congress reduced Medicare reimbursements to hospitals, while Medicaid reimbursements to primary care clinics remained basicall...
In the modern world of the health-care industry, it is vital that an organization’s financial statement analyses be kept up to date and reported accurately within the company. A financial analysis is an evaluative method of determining the past, current and projected performance of a company (Investopedia.com, 2016). Collectively, patients seek superior quality of health care services and integrity from professionals who work in the hospitals and serve the communities worldwide. Although the health care industry is rapidly changing as time progresses, providers still have an obligation to satisfy the patients and deliver excellent care to those in need.
Currently, an imbalance exists, leading to nonproductive tensions (Nolan, Bisognano, 2006).” Clinicians often see themselves defending patients and professional standards against the finance department. They see themselves as the protectors of quality. The finance professionals see themselves protecting the resources of the organization. The finance department usually provides supervisors with weekly or monthly cost reports of expenditures against the budget (McConnell, C, 2010). This is difficult for management because the clinicians see that they need new equipment to help the patients and the finance professionals see unnecessary spending that could be saved for something more important. Management must figure out how to decipher how to keep their clinicians happy and finance professionals happy. Management must figure out how to handle difficulty between staff members and ways to reduce the cost but keep the quality of care up especially with the budget the finance department have gave
After analyzing our most recent annual report from 2012. We noticed that our operational cost is approximately $20,000 over our revenue. Looking at our data from previous years, the $20,000 over-budget has occurred in the past. In 2010, Partners in Health had approximately $90,000 in unused funds which carry over at the end of ...
Health care system is a prominent subject all over the world. Every country wants to provide the best health facilities and services to their people. Even than there are so many lapse in the health care field? As regard to U.S there are also so many short comings in the health care organizations. I have gone through and studied the background of the health care system being run by clinics, primary health care centers, and hospitals etc. People has to pay very high charges on every visit to the doctor or surgeon for medical treatments, follow-up and as indoor patients. Theses health care organizations demand plenty money and other hidden expenditures from the patients which is some time beyond the reach of the patients.
The financial statements from Johns Hopkins Hospital (JHH) were used to calculate and analyze the meaning of the financial health of the organization from the years 2010-2012 (Appendix A). The following five major types of ratios were used: common size, liquidity, solvency, efficiency, and profitability
Marshall, D., McManus, W., & Viele, D. (2004). Accounting: What the numbers mean. [University of Phoenix Custom Edition e-text]. New York, NY: McGraw-Hill Companies.