To understand this dynamic, you need to know who the customer is.
One of the key questions arising from looking at financial statements is this: how do we “get to the bottom line” in healthcare? In our society and culture, we have a fascination with the term “net income,” but it may have little meaning for providers.
In healthcare, the first hurdle is that “customers” may or may not be the actual beneficiaries of the services. When a patient is covered by Medicare, Medicaid, or another third party, is the patient the “customer?” Current accounting guidance says that when a patient is covered by a third party, the true customer is that third party.
The next issue is determining what the agreed payment will be for the service. In healthcare, this occurs after the customer has left the facility. Providers often do not know for sure who the customer really is until long after the service is provided. Once a bill goes out, that is when the negotiation for the amount of the payment starts. In almost no case does the payment have anything to do with the amount charged for the service.
There is also a huge difference between net income and operating income in healthcare. Many providers have gone bankrupt while still showing net income on their financial statements.
Many times, these providers were offsetting losses on operations with income from shrinking investment funds. Swings in the investment markets can leave a provider in a hole they can’t escape.
Increasingly, I am seeing a variety of accounting adjustments related to operating income that seem to distort it. These include unrealized gains and losses on investments, revaluations of pension liabilities and adjustments, and self-funded healthcare liabilities for employees of a provider. I offer no solutions, but I hope as Medicare moves forward setting rates based to some extent on operating income reported on Medicare cost reports, we find a way to make sure that healthcare continues to “break even,” or even prosper.
EDITOR’S NOTE: Ms. Fernandes is the immediate Past President and Communications Chair for the International Federation of Health Information Management Associations (IFHIMA), and will be
On American Diabetes Association Alert Day, observed annually on the fourth Tuesday in March, we are reminded of the critical role that early detection and
Please log in to your account to comment on this article.
Uncover critical guidance. Kay Piper provides an interactive review on coding guidelines and more in the AHA’s third quarter 2025 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Uncover critical guidance. Kay Piper provides an interactive review on coding guidelines and more in the AHA’s second quarter 2025 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Uncover critical guidance on the ICD-10-CM/PCS code updates effective with discharges and dates of service on or after 4/1/2025. Kay Piper reviews and updates coders on Obesity, COVID-19, and ICD-10-PCS coding guidelines in the AHA’s first quarter 2025 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Physician queries are essential for accurate documentation and claims data, but they are increasingly scrutinized by payors, leading to denials and revenue leakage. This webcast, led by industry expert Cheryl Ericson, RN, MS, CCDS, CDIP, provides actionable strategies to craft compliant queries, reduce denials, and enhance revenue integrity. Attendees will gain insights into clinical validation queries, how to avoid common pitfalls, and learn best practices to defend against query denials. Don’t miss this opportunity to refine your query process and protect your organization’s financial health.
Providers face increasing Medicare audits when using skin substitute grafts, leaving many unprepared for claim denials and financial liabilities. Join veteran healthcare attorney Andrew B. Wachler, Esq., in this essential webcast and master the Medicare audit process, learn best practices for compliant billing and documentation, and mitigate fraud and abuse risks. With actionable insights and a live Q&A session, you’ll gain the tools to defend your practice and ensure compliance in this rapidly evolving landscape.
Dr. Ronald Hirsch dives into the basics of Medicare for clinicians to be successful as utilization review professionals. He’ll break down what Medicare does and doesn’t pay for, what services it provides and how hospitals get paid for providing those services – including both inpatient and outpatient. Learn how claims are prepared and how much patients must pay for their care. By attending our webcast, you will gain a new understanding of these issues and be better equipped to talk to patients, to their medical staff, and to their administrative team.
Hospitals face growing challenges in measuring observation metrics due to inconsistencies in classification, payer policies, and benchmarking practices. Join Tiffany Ferguson, LMSW, CMAC, ACM, and Anuja Mohla, DO, FACP, MBA, ACPA-C, CHCQM-PHYADV as they provide critical insights into refining observation metrics. This webcast will address key issues affecting observation data integrity and offer strategies for improving consistency in reporting. You will learn how to define meaningful metrics, clarify commonly misinterpreted terms, and apply best practices for benchmarking, and gain actionable strategies to enhance observation data reliability, mitigate financial risk, and drive better decision-making.
The 2025 Medicare Physician Fee Schedule brings significant changes to payment rates, coverage, and coding for physician services, impacting practices nationwide. Join Stanley Nachimson, MS., as he provides a comprehensive guide to understanding these updates, offering actionable insights on new Medicare-covered services, revised coding rules, and payment policies effective January 1. Learn how to adapt your practices to maintain compliance, maximize reimbursement, and plan for revenue in 2025. Whether you’re a physician, coder, or financial staff member, this session equips you with the tools to navigate Medicare’s evolving requirements confidently and efficiently.
Copyright © 2025 ICD10monitor. Powered by MedLearn Media.
Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more
Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
