COSO

At first glance, the healthcare patient check-in process seems straightforward. But when examined through the lens of your revenue cycle and patient experience, it’s one of the most important interactions for your team to get right.

Several key elements must be taken into consideration to create a smooth and simple patient check-in. Patient satisfaction is the tip of the iceberg. You want your patients to have a great experience that is efficient, easy-to-understand, and doesn’t create billing headaches for them later on. The good news is that the same techniques that give your patients a good experience also form the basis for an optimal revenue cycle. Developing this process starts with the undersurface elements that patients never see.

Scripting for patient access teams

Communicating clearly, consistently, and positively is important to put patients at ease, and to make sure that you collect the most accurate and up-to-date information from patients. Doing this correctly up front will save time and will prevent denials and associated workload and revenue loss. The best practice is to establish scripting for your patient access staff and provide training to make sure they are confident in the scripting provided. Here are some examples:

When confirming that patient information is up to date:

Say this: “To ensure your account is as accurate as possible, we require all patients to present a minimum amount of information.”

Not that: “Have there been any changes in your information since the last time you were here?”

Or when connecting a self-pay patient with a financial counselor:

Say this: “Before scheduling your appointment, I will connect with a financial counselor who can determine if you qualify for assistance and will help you understand your financial obligations.”

Not that: “We can’t schedule you until you speak with someone in Finance.”

Developing clear and efficient scripting will give your team the tools to communicate effectively and will help your patients feel like they are well taken care of.

Schegistration: What is it? 

What is “schegistration” anyway? Schegistration is the process of scheduling a patient appointment while also pre-registering the patient at the same time. By gathering and confirming information at the time of scheduling, the in-person check-in process will have fewer steps and will be quicker and easier for both the patient and your team.

Technology: Align your EHR with patient access workflows

Technology, specifically your Electronic Health Record (EHR), can either make your workflows more efficient, or can hinder your patient access staff. It’s important to align your technology platforms with your operational workflows, so it is seamless for your staff to enter and pull up information. It’s also important to have your staff trained regularly on your technology systems so they feel confident that they are using the system correctly and most efficiently.

Documentation: Write it down! 

When you develop new workflows to increase efficiency and the patient experience, it can be challenging for staff to make the change. In a busy office environment, it can also be difficult to train new staff effectively. To make it easy and to create consistency and continuity, it’s important to develop standard operating procedures and to document them thoroughly. Providing easy to understand instructions, including visuals of workflows, will reduce errors, promote standardization, and improve accountability.

Leadership: Reinforce best practice workflows

Keeping workflows optimized takes the whole team, beginning with leadership. The leaders of your patient access team should act as reinforcement when team members learn and complete best practice check-in workflows. Having documentation readily available and providing support and encouragement to team members will help keep your processes running smoothly.

Patient access team collaboration

Establish clear expectations to foster a supportive team environment and facilitate problem-solving and quick assistance. When scripting, workflows, and documentation are consistent, it’s easy for team members to help each other out and support each other when challenges arise.

The healthcare revenue cycle is an intricate system involving interdependent functions. Like an ecosystem, each component plays an important role in the system. The patient access process is just one piece of the puzzle. Optimizing your revenue cycle also includes looking at these areas: coding and compliance, billing, and denial management.

BerryDunn's audit, tax, clinical, and consulting professionals, focused on specific healthcare industry areas, understand the biggest challenges facing healthcare leaders, and are committed to helping you meet and exceed regulatory requirements, maximize your revenue, minimize your risk, improve your operations—and most importantly—facilitate positive outcomes. Learn more about our healthcare consulting team. 

Read this if your organization uses provider-based billing. 

Like an old car rusting in a field, provider-based billing is not something that gets much attention. Hospitals have set up departments to manage it, completed their attestations (or not), and then forgotten about it, leaving it to rust in the field. Provider-based billing is one of those things that is not a problem until it is. There are many reasons why hospitals may want to review their provider-based billing processes:

1. Facility updates are constant in healthcare and departments may have moved since their initial inceptions
2. Hospital acquisitions and mergers have changed ownership structures and may have removed grandfather status protections
3. When leadership changes, new leadership often assumes that everything was set up and is being billed correctly
4. Commercial payor guidance has and continues to change 
5. CMS provider-based rules have changed

Many hospitals move department locations and do not give much thought to the claim implications. Besides address, enrollment, and credentialing updates that may or may not be needed, the move may make the department ineligible to continue provider-based billing because it no longer meets the criteria under the updated regulations.

Attestations for smoother audits

Very few hospitals have a library where they can easily access all their attestations. Many providers don’t ever submit an attestation to Medicare as they are not required to do so. However, not having one opens the hospital to more risk if the department is ever deemed non-compliant with the regulations. If the hospital has a library of all attestations, an audit can be a quick and painless experience. The audit would involve:

• Confirming nothing has changed since the attestation in terms of location and structure
• Reviewing some claims to identify if charges are split and billed correctly
• Ascertaining if payor rules are being followed
• Checking that signage is correct in the lobby of provider-based locations.
• Reviewing the 855 form and confirming the required departments are listed

If an attestation is not available, the audit becomes more difficult. If the department is on the main campus and meets all the provider-based rules, the audit easily follows the above steps. If the department is not on the main campus, the audit becomes more challenging, as you would need to confirm:

• The department is located within 35 miles of the main campus
• If the department is or was grandfathered and doesn’t need to meet the requirements
• If an attestation should be completed
• How/when was the department created, and what other facts pertaining to its inception are relevant  

Difficulties arise when a hospital identifies that a department does not meet the current criteria and an attestation is not available. Simply stopping billing as provider-based billing is not sufficient as there are False-Claim Act and other compliance implications. Regardless of the remedy, identifying these issues on your own—as opposed to during an external audit—is certainly better. It will provide you time to fully research the situation and confirm if there is or is not really a concern. If it is confirmed that billing was incorrect, proactively self-disclosing the issues is certainly better than defending an audit. 

Proactive audits for peace of mind

You may be wondering why we are writing about provider-based billing now. The reality is that we are seeing more provider-based billing issues both with our clients and across the country. Hospitals are very busy and there is simply not enough time to worry about everything. This is an area where a quick audit can bring peace of mind and also force your teams to become reacquainted with the updated regulations and safeguard against future problems. 

BerryDunn has assisted several health systems with auditing and working through provider-based concerns. Our experts are available to support clients with questions or concerns about their provider-based departments. If you have questions about your specific situation, please don’t hesitate to contact us [LINK when live]. We’re here to help.

Non-profit financial statements include a wealth of important knowledge and can often be overwhelming. When sharing your financial statements with your board of directors or other stakeholders, it can be useful to simplify your financial statements so the key information stands out and unimportant information doesn’t cause confusion. In our work with independent schools and other non-profit clients, we’ve seen many ways that financial statements can be simplified to paint a clearer picture of your organization’s health.

Engage with stakeholders to improve your financial statements 

Boards, donors, creditors, and other stakeholders gain key insights to a non-profit's financial status through reading the financial statements, allowing them to make informed strategic decisions. These reports also allow for improving communication between organizations and their stakeholders. Financial reporting additionally provides historical knowledge that can assist with strategic planning and forecasting.

As a first step in improving the ease with which your financial statements can be read, proactively engage with your stakeholders to gather feedback on the effectiveness and clarity of your current financial statements. To do this, consider conducting informational sessions or webinars to explain changes and address questions. Make sure to understand the needs of your stakeholders and what financial statement items they are most interested in and tailor disclosures to address their concerns and the items that matter most to them.

Simplify your financial statement disclosures 

For any financial statements that are to be issued in accordance with US generally accepted accounting principles (US GAAP), there are a certain number of required disclosures. Subject to materiality, for each financial statement line item, there is a related disclosure, and any item in your financial information that is material should be disclosed. As a general rule, if a trial balance account is less than 5% of total revenue, it could be grouped into an “other” category instead of being presented as a separate financial statement line item. This can also be done on the statement of financial position, but using 5% of total assets or total liabilities. Removing these smaller items can put more focus on the important items within your financial statements.

Another way to simplify your financial statements is to consider removing some small, fixed assets from your statements. For example, the purchase of an office printer could technically be considered a fixed asset to be capitalized, but it’s likely not worth the effort—and it makes the financial statement look more complex than necessary. Consider implementing a financial statement capitalization policy that determines a dollar limit threshold for capitalizing fixed assets and expensing items under that threshold.

Remove disclosures once they’re no longer needed  

Other common items that can increase the length of financial statements are disclosures related to the implementation of new accounting policies. In the year of adoption, footnotes are required to explain the impact of the adoption. In following years, not as many disclosures are necessary and can be removed. Ensure that information that is remaining after the year of adoption is either required under US GAAP or is necessary to stakeholders. If it’s not, remove it.

Take ownership of your financial statements 

Although your CPA firm might assist with the preparation of the financial statements, the ultimate responsibility rests on your organization’s management team to produce financial statements in accordance with US GAAP and satisfy the needs of your stakeholders. Ensuring your financial statements are optimized opens a great opportunity for you to sit down with your audit team and discuss your needs. Contact us at any time to set up a meeting and learn more.

Read this if your organization is looking to make an elective pay election.

The Department of the Treasury and the IRS on March 5 released final regulations (TD 9988) on the elective pay election for certain energy tax credits under IRC Section 6417, added by the Inflation Reduction Act (IRA), which treats the credits as a  payment against federal income tax liabilities. 

The final regulations adopt the proposed regulations (REG-101607-23) with some modifications that clarify which applicable entities are eligible to make an elective pay election and how the election should be made. 

The IRS also updated the elective payment frequently asked questions based on the final regulations. Finally, the IRS issued Notice 2024-27, which requests additional comments on any situations in which an elective payment election could be made for a clean energy credit that was purchased in a transfer,  a sequence of events referred to as chaining.    

Background

The IRA introduced, for tax years beginning after December 31, 2022, the ability for some entities to monetize applicable tax credits via an “elective pay” election under IRC Section 6417. This allows applicable entities to treat certain credits as payment against their federal income tax liabilities and to receive a refund of any excess payment.  

Eligible credits and entities

The IRA specifies that only some credits and entities are eligible for the elective pay election under Section 6417. Applicable credits include: 

Eligible entities, referred to as “applicable entities,” include: 

• Tax-exempt organizations
• Any state, the District of Columbia, or political subdivision 
• An Indian tribal government or subdivision 
• Any Alaska native corporation 
• The Tennessee Valley Authority 
• Rural electric cooperatives
• An agency or instrumentality of certain applicable entities

Partnerships

While the final regulations bring clarity to the issue of determining which entities are eligible to make an elective pay election, they notably exclude partnerships from making such an election (except with respect to Section 45V, 45Q, and 45X credits). This exclusion has significant implications for the renewable energy sector, where projects are commonly structured as partnership entities to pool capital, diversify risk, and combine the expertise of various entity partners. 

During the comment period on the proposed regulations, several commenters advocated for the inclusion of mixed partnerships—that is, partnerships that consist of both applicable entity and non-applicable entity partners—as applicable entities to allow for an elective payment election equal to the applicable entity partner’s allocable credit. However, the Treasury and the IRS rejected those suggestions and adopted the regulations as originally proposed.

However, the final regulations do allow entities to make a valid election out of Subchapter K as a means for these entities to make an elective pay election. Feedback from commenters highlights the complexities and burdensome requirements that arise from making such an election out of Subchapter K, limiting its usefulness. The Treasury and the IRS acknowledged such challenges and simultaneously issued proposed regulations under Section 761 for renewable energy projects that validly elect out of Subchapter K. Under the proposed regulations, exceptions would allow certain unincorporated organizations to make an elective pay election. 

Tax-exempt grants and loans

The final regulations adopt special rules regarding qualified energy property acquired using certain tax-exempt grants and forgivable loans. The rules state that (1) tax-exempt amounts are includable in the basis of the property and (2) “no excess benefit” can be derived from the use of restricted tax-exempt amounts used towards acquiring investment-related credit property. 

The addition of the “no excess benefit” rule effectively limits the amount of the applicable credit that can be claimed such that the sum of any restricted tax-exempt amount(s) and the applicable credit does not exceed the cost of the investment-related credit property. This rule applies only to tax-exempt amounts that are restricted for the specific use of purchasing, constructing, reconstructing, erecting, or acquiring the investment-related credit property. The final regulations include examples to illustrate this rule.  

Making the election

To participate in the elective pay election, all credits must undergo a prefiling registration process and the applicable entity must secure a valid registration number. Credits can be registered as early as the first day of the taxable year in which the qualified energy property is placed in service. Any election received by the IRS without a valid registration number will be deemed ineligible. As currently established, a “short form” renewal process for multiyear credits such as the production tax credit is not available. A new registration must be submitted each year a credit is generated. 

Applicable entities that already file an annual tax return would continue to file that return with the appropriate tax credit form and Form 3800 completed. Applicable entities that do not file an annual information return with the IRS would utilize Form 990-T. Note that the elective pay election must be made on an originally filed return (including extensions) and cannot be made on an amended return. 

The final regulations also confirm that fiscal year organizations that do not normally have tax filing requirements may adopt a tax year-end different from its current accounting year-end. Such organizations are required to maintain adequate books and records of any differences between their normal fiscal year-end books and adopted tax year-end books. This provides increased opportunity for organizations that placed qualified energy property in service early in 2023 and otherwise would have been excluded from a tax credit benefit. 

Processing of payments

The Treasury and the IRS opted not to define a specific time frame for processing payment of an elective pay election, instead indicating in the preamble that the prefiling registration process is designed to verify certain limited information in advance and mitigate the risk of delayed payment processing by the IRS. 

The final regulations additionally confirm that applicable entities that choose to make this election will receive payment in one lump sum as opposed to multiple payments. Some commenters had suggested an accelerated payment mechanism that would enable applicable entities to submit the election as early as the placed-in-service date of the qualified energy property, thus enabling the IRS to provide pre-payment of a portion of the applicable credit based on a review of the prefiling registration information. Given that the elective payment amount is treated as made when a credit claim or the annual tax return is filed, the Treasury and the IRS concluded that it would not be possible to implement this mechanism. 

Written by Leah Turner, Aaron Wright, and Gabe Rubio. Copyright ©2024 BDO USA, P.C. All rights reserved. www.bdo.com

The Federal Deposit Insurance Corporation (FDIC) recently issued its fourth quarter 2023 Quarterly Banking Profile. The report provides financial information based on Call Reports filed by 4,587 FDIC-insured commercial banks and savings institutions. The report also contains a section specific to community bank performance. In fourth quarter 2023, this section included the financial information of 4,140 FDIC-insured community banks. BerryDunn’s key takeaways from the report are as follows:

Community banks’ full year net income down $2 billion from 2022.

Full-year net income declined 7.1% in 2023 to $26.6 billion from $28.6 billion in 2022. Quarterly net income for community banks declined 9.9% in fourth quarter 2023, a $650.2 million decrease from the prior quarter resulting in $5.9 billion in quarterly net income. Compared to fourth quarter 2022, net income had decreased $1.9 billion, or 24.7%. More than half (59.7%) of all community banks reported a decline in net income compared to third quarter 2023. Net income for community banks was impacted by higher noninterest expense, lower noninterest income, and increased loan loss provisions.

Community banks’ net interest margins (NIM) remain constant in the fourth quarter at 3.35%.

Despite remaining consistent quarter-over-quarter, NIM was down 36 basis points from the year-ago quarter. The yield on earning assets increased 88 basis points while the cost of funds increased 124 basis points. Despite the significant decline, the community banks’ NIM performance continued to prevail over the overall banking industry’s NIM of 3.28%, which declined three basis points in fourth quarter 2023. Despite the decline, the banking industry’s NIM remained three basis points above the pre-pandemic average NIM of 3.25%.

Loan  and lease balances continued to grow in fourth quarter 2023, with 76.2% of community banks reporting quarterly loan growth. 

Loan and lease balances continued to see widespread growth in fourth quarter 2023. Community banks saw loan growth in all major portfolios. Residential real estate loans exhibited the most growth from the third quarter at 1.9%, followed closely by nonfarm, nonresidential CRE loans at 1.6%. Total loans and leases grew 7.9% from one year ago. This year-over-year growth was also driven by residential real estate and nonfarm, nonresidential CRE loans, which showed growth year-over-year of 10.1% and 7.2%, respectively.

Community banking: When one door closes, another opens

With many calendar year-end institutions having wrapped up, or in the process of wrapping up year-end financial statement audits, it is starting to feel as if we can finally put a cap on 2023. What a year it was! Although the above analytics might not paint the rosiest of pictures, with full-year net income having slid 7.1%, there is still a lot to celebrate from 2023. On the financial side, loan demand continued to remain relatively strong, especially given the challenging rate environment, with loan balances having grown 7.9% from one year ago. Deposit balances, although not matching the growth in loans, also increased from one year ago, having increased 2.3%. Although inflation remained stubborn throughout 2023 and thus far through 2024, the prospects of a “soft landing” have grown for many, with unemployment remaining at historic lows. Recently, the Fed signaled they hope to cut interest rates three times in 2024, although this seems to be a moving target, given inflation’s persistence. 

Let’s not forget, 2023 marked the year of adoption of the current expected credit loss (CECL) standard for many institutions. This is a monumental change for institutions, which completely overhauls the way institutions think about their allowance for loan losses. Not only did allowance calculations get completely revamped, many now relying significantly on vendors and peer data but as a result, processes, internal controls, and documentation also changed significantly from the previous incurred loss methodology. It is fitting for all of us to take a deep breath, as it feels as if we’ve all held our breath for the last few years leading up to adoption. We made it. Most of us are finally on the other side of an accounting standard that was issued seven years ago—and was partly a response to a crisis that occurred 15 years ago. 

Although there may be future adjustments and iterations, the CECL standard is here to stay. So, once we take that deep breath, it’s time to dig back in and continue to refine and build upon the calculation and processes we’ve implemented in 2023. We’ve come to learn that, among other things, documentation is key under the CECL methodology, arguably more so than under the incurred loss methodology, and thus should continue to be a focus in 2024.

It may be hard to believe, but it’s been just over a year since the bank failures of March 2023. This was a scary time for the banking industry, as uncertainty set in as to whether your institution could be next. But, for many institutions, this event can be looked back on as a positive moment in 2023. This event brought the differences in banks, community vs. regional vs. global, to the spotlight, allowing community bankers to showcase their differences, highlighting how community-oriented your institutions really are.

So, with that, we give a salute to 2023 and look ahead to 2024. We’ve learned a lot and we have 2023, in part, to thank for that. If quarter one is any indication, we’re in for another rollercoaster of a ride in 2024. Artificial intelligence, including “Gen AI,” continues to dominate headlines, the Fed continues to humor the idea of cutting interest rates, and let’s not forget, 2024 is an election year. But what is a “normal” year anymore? If anything, the last few years have exemplified just how resilient the community banking space really is and have given us the tools and confidence to adapt to change in nearly real-time. In other words, bring it on, 2024. As always, BerryDunn’s Financial Services team will be right alongside you, navigating every rise, bump, and drop of this rollercoaster ride.