nonprofits

Who this applies to: Healthcare leaders across the industry, including C-suite executives, executive directors, owners, finance directors, compliance, revenue cycle, and administrators.

As BerryDunn’s Healthcare Practice Group lead, Lisa Trundy-Whitten is closely attuned to the healthcare industry. From challenges faced by healthcare organizations to the solutions BerryDunn’s experts can provide, Lisa shares thoughtful insights for healthcare leaders. 

Healthcare is moving from a volume-and-growth mindset toward one centered on value, productivity, and sustainability. As your organization prepares for 2027, this means focusing on financial discipline, operational redesign, and proving value. Rather than considering if you can expand a service, it’s time to ask if you can financially sustain delivery of the service. It’s time for organizations to scrutinize service-line profitability, labor productivity, payer contracts, and capital investments more closely.

Strengthen financial performance and 2027 readiness

As your leadership team plans for 2027, pause to assess where you are today. Before year-end, leaders should:

• Identify the factors driving margins and areas where performance is deteriorating. 
• Review trends in labor, supply, pharmacy, and purchased-service costs. 
• Evaluate cash flow, liquidity, and revenue cycle performance.
• Test whether 2027 budget assumptions are realistic. 
• Develop best case, expected case, and downside scenarios. 

Financial improvement should not occur in isolation. The shift toward accountable and value-based care makes the connection between quality, utilization, and financial performance increasingly important.

Address revenue cycle leakage

At year-end, focus on the revenue that your organization has earned but isn't collecting efficiently. That means taking a close look at:

• Denials and their root cause
• Authorization failures
• Coding and documentation issues
• Underpayments
• Accounts Receivable aging
• Clean-claim rates
• Charge capture
• Contract reimbursement compared with actual reimbursement 

Rather than simply asking whether revenue increased, ask whether you’re collecting all the revenue you’ve earned and where in the cycle you are losing it.

Prepare for reimbursement and regulatory changes 

The last quarter is an important time to determine how 2027 reimbursement changes could affect financial and operational planning. Review:

• Medicare and Medicaid payment changes
• Medicare Advantage changes
• Commercial payer contracts and upcoming renewals
• Value-based payment arrangements
• Prior authorization and denial trends
• Physician reimbursement changes
• Programs or legislative provisions scheduled to expire at year-end

This is especially important now because several healthcare programs and payment provisions are scheduled for year-end action, while CMS has also proposed significant changes to Medicare physician payment and accountable care. For organizations with significant Medicare Advantage exposure, 2027 deserves particular scrutiny. Major insurers have announced narrower networks and market changes in response to utilization, cost, and reimbursement pressures. These developments underscore the strategic importance of payer mix, as shifts in payer participation or enrollment can have a significant impact on revenue and long-term financial sustainability. The payer mix is OKbecoming a strategic issue, not just a finance department metric.

Look at workforce and productivity

Workforce remains one of the major strategic priorities identified by healthcare organizations. It’s time to move beyond concerns of whether you are adequately staffed and instead take an in-depth look at how effectively you are leveraging the staff that you have. Examine:

• Vacancy and turnover rates
• Overtime and agency utilization
• Compensation competitiveness
• Productivity by department and service line
• Leadership succession
• Recruitment pipelines
• Retention of critical clinical positions

Consider how jobs and workflows might be redesigned to reduce administrative burden. This might create a shift to more team-based care, different skill mixes, expanded use of technology, centralized administrative functions, and revising clinical workflows to better achieve operational goals.

Evaluate service-line and program profitability

Year-end is an excellent time to challenge the assumption that every existing service should continue operating exactly as it does today. This can lead to three different decisions: invest, redesign, or reconsider.

For each major service line, examine:

• Volume and contribution margin
• Staffing requirements and capital requirements
• Payer mix
• Referral patterns
• Market demand
• Strategic importance
• Capacity constraints

As healthcare organizations face continued pressure to make sharper choices about where to allocate scarce capital and management attention, taking a hard look at these areas is especially relevant.

Shift from AI experimentation to measurable value

Healthcare organizations have spent the last couple of years experimenting with generative AI. Now it’s progressing to implementation of AI, and increasingly to accountability. By year-end, you’ll want a clear answer to the question: What have our technology and AI investments accomplished?

For every significant AI initiative, measure:

• Hours saved
• Labor costs avoided
• Revenue generated
• Denials reduced
• Documentation improved
• Patient access improved
• Employee experience
• Clinical outcomes
• Implementation and maintenance costs

It’s time to evaluate your use of AI to determine whether you’re using these tools appropriately and generating a measurable return on the investment.

Adapt as care moves outside traditional settings

There is a broader shift toward more convenient, lower-cost, and digitally enabled care. While patients are embracing virtual health visits, organizations are continuing to invest in digital engagement and monitoring. The strategic question becomes: Which care truly needs to occur on site?

This has implications for:

• Outpatient services  
• Urgent care  
• Home-based care  
• Telehealth  
• Remote monitoring  
• Ambulatory surgery  
• Post-acute care  
• Hospital-at-home models 

Ask the right questions as you prepare for 2027

As your leadership team reviews capital allocation and strategic priorities for 2027, consider answering a difficult question: What are we going to stop doing in 2027?

Organizations often create long lists of strategic initiatives without eliminating lower-value work. Spend time evaluating strategic initiatives, stop work that no longer adds value, protect essential programs, invest in high-impact opportunities, and fix what isn't performing as expected.

I encourage you to replace your broad planning discussions about strategic initiatives for 2027 with more targeted questions that get to the heart of financial and operational sustainability:

1. Where are we generating the strongest financial returns?
2. Where are we experiencing financial losses?
3. Which payer relationships warrant scrutiny?
4. Where can technology genuinely reduce costs or improve capacity?
5. What work should we redesign rather than continue to staff traditionally?
6. Which services should we invest in, redesign, or reconsider?
7. What assumptions in our 2027 budget are most vulnerable?

Your answers should serve as a strategic guide to 2027 for your organization.

BerryDunn can help 

If you need support, reach out to us to discuss ways we can guide you and help you improve outcomes. I encourage you to explore our comprehensive breadth of services and learn about our team of experts across healthcare practices.  

Best, 

Lisa Trundy-Whitten

For a more in-depth discussion of these topics, download the comprehensive guide at the bottom of the article. 

Who this applies to: Professionals responsible for credit/risk, accounting, loan operations, and the C-suite at financial institutions.

Financial institutions have devoted significant time and resources to implementing the Current Expected Credit Losses (CECL) methodology. As CECL becomes part of the recurring financial reporting process, attention has shifted from implementation to ongoing governance, monitoring, and independent review. This article briefly summarizes our full guide on the differences between CECL model validation and CECL internal audit.  

What is a CECL model validation?

A CECL model validation is an independent assessment of the methodology and model used to estimate expected credit losses. Its principal objective is to determine whether the model is appropriate for its intended use, supported by sound reasoning, implemented correctly, and producing reasonable and reliable results. For a CECL estimate, validation may address conceptual soundness, model implementation and technical accuracy, and ongoing model performance.

What is a CECL internal audit?

A CECL internal audit evaluates the broader governance, risk management, compliance, and control framework surrounding the allowance estimate. While model validation asks whether the model is sound, internal audit asks whether the institution has an effective process for operating, reviewing, approving, and reporting the estimate. The review may include governance, data and reconciliation controls, access rights, management review controls, reporting, documentation, and remediation.

The most important difference: The questions being answered

The clearest way to distinguish between the two reviews is this: The model validator evaluates the substance of the estimate, while the internal auditor evaluates the process and controls by which the estimate is developed and reported.

Areas of overlap

Model validation and internal audit are distinct, but they are not completely separate. Both may review areas such as data quality and reconciliation, documentation, oversight, model changes, third-party service providers, model monitoring, findings and corrective actions, and policies and procedures. However, the two functions examine these areas through different lenses.

Why one review does not automatically replace the other

Relying only on model validation may leave governance and control risks unaddressed, while relying only on internal audit may miss flaws in the methodology, assumptions, calculations, or model performance. A sound oversight framework considers both model risk and control risk.

A practical illustration

Consider a community bank that applies a qualitative adjustment for worsening economic conditions. A model validation may identify that the adjustment is based on an economic indicator with little demonstrated relationship to the bank’s historical credit losses or creates a risk of double-counting. An internal audit may find that the allowance committee did not review and approve the adjustment as required. The example illustrates how a technically sound model can still have a deficient process, or a well-controlled process can still rely on an unsound model.

Independence and qualifications matter

Both CECL model validation and CECL internal audit should provide objective challenge to the CECL process. Reviewers should be independent from developing, operating, and approving the model, and they should have the appropriate expertise for the review. Institutions may use outside specialists when the necessary expertise or independence is unavailable internally, but management remains responsible for understanding the scope, reviewing the results, and addressing identified issues.

How frequently should each review occur?

Review frequency should be risk-based and reflect the institution’s size, complexity, portfolio composition, methodology, model risk, and prior findings. More frequent or extensive validation may be needed after significant model changes, data-quality issues, recurring findings, portfolio changes, or increased use of management judgment. Internal audit frequency should also reflect risk, and the validation cycle and audit plan should be coordinated to avoid duplication while addressing both model risk and control risk.

Questions management and directors should ask

Management, directors, and audit committee members should evaluate the institution’s CECL oversight framework by asking the right questions across three main areas: model validation, internal audit, and coordination between the two functions. Together, these categories help assess whether model risk and control risk are being addressed without unnecessary duplication.

Download the full guide to CECL model validation and internal audit: Understanding key differences

About the team

For institutions looking for the best value, with the right understanding of scope and combination of skills and expertise, BerryDunn’s dedicated financial services professionals can customize an approach to cover both. Learn more about our services or reach out to us through our Ask the Advisor form. For more insights and expertise, follow and connect with Susan Weber and David Stone on LinkedIn.

Change is inevitable for local governments. Leadership transitions, rapid technological advances, workforce challenges, economic pressures, and shifting community needs can all affect how a locality operates. Yet a strong strategic plan should be able to withstand those changes.

Most local government strategic plans are designed to guide decision-making for three to five years. That time frame provides enough stability to establish meaningful direction while allowing flexibility as conditions change.

The challenge is knowing when change requires an adjustment to the plan, when it calls for a thoughtful refresh, and when it signals the need for an entirely new planning process. The answer depends less on any single event and more on whether the plan continues to reflect the community's priorities and provides a realistic framework for achieving them. Most organizations don't need to choose between rigidly following an outdated plan and starting from scratch. In many cases, the right path lies somewhere in between. To determine whether an organization will refresh an existing plan or create a new one, ongoing evaluation is critical.

Effective strategic planning is an ongoing, multiyear process supported by performance measurement and reporting. The most successful organizations regularly review progress, communicate results, and assess whether their objectives continue to reflect community needs. Effective metrics help leaders understand where progress is being made, where challenges remain, and whether actions are producing meaningful outcomes.

Organizations that regularly discuss progress, celebrate successes, and connect daily work to strategic priorities are more likely to keep their plans relevant and actionable over time. Many strategic plans fail not because they were poorly designed, but because they gradually disappear from regular conversations. With a strategic plan in place, implementation, and regular progress reporting, the question becomes how an organization should respond as circumstances evolve: stay the course, refresh the existing plan, or begin a new planning process.

When to stay the course

Not every change requires a strategic planning reset.

A well-developed strategic plan should be resilient enough to weather organizational and leadership changes. When the vision remains relevant and the community's priorities remain aligned with the plan, staying the course may be the best decision.

Leadership transitions are often among the first events that prompt questions about strategic direction as they may bring fresh perspectives. However, leadership turnover alone does not necessarily mean the community's vision has changed. In many cases, incoming leaders build on foundation of priorities that were developed through strong community and organizational engagement.

The same principle applies to election cycles. Changes within a governing body may introduce new ideas and areas of emphasis, but strategic plans should remain grounded in organization and community priorities. When the long-term aspirations that are actionable, remain unchanged, the existing plan continues to provide valuable guidance.

When an existing plan needs a refresh

While the vision may stay the same, the path to achieving it sometimes needs to change.

Communities experiencing changes in economic conditions, demographic shifts, development patterns, or changing resident expectations often find themselves facing challenges that were not fully anticipated when their plan was created. Leaders should evaluate the community's most pressing needs and determine what remains realistic and achievable. In many of these situations, a refresh of the plan is enough. By updating strategic priorities, performance measures, implementation strategies, and timelines, organizations can help ensure their plans remain relevant while preserving the broader vision that continues to resonate with the community.

When to start over

When leaders find themselves questioning not just how to achieve the vision but whether the vision itself is still relevant, it may be time to start fresh.

A new planning process may be appropriate when community priorities have fundamentally shifted, when major external changes have altered the community's future direction, or when the original vision no longer reflects the realities facing the organization. When the public, leadership, or staff expectations have created an entirely different environment from the one that existed when the plan was first developed, then it can affect an organization's ability to execute its strategy.

Rapid growth, major development, workforce shortages, retention issues, and cultural challenges can limit an organization's ability to carry out its strategy. Increasingly, local governments recognize that organizational health plays a direct role in community outcomes.

External factors can create similar challenges. State mandates, funding uncertainty, economic fluctuations, and policy changes can significantly affect available resources and organizational priorities. These pressures may not warrant a complete restart, but they often require leaders to revisit assumptions and identify new objectives for achieving established goals.

A new strategic planning process allows organizations to revisit foundational questions, gather fresh perspectives from stakeholders, and establish a new roadmap for the future. As the destination changes, revising the map and route may be necessary.

Key takeaways

• A strong strategic plan should provide continuity and direction even when circumstances change.
• Leadership transitions and election cycles do not automatically require a new strategic plan.
• Refresh the plan when the vision remains relevant, but the approach needs to change.
• Consider a new planning process when community priorities or the long-term vision has profoundly changed.
• Regular evaluation, communication, and stakeholder engagement help keep plans relevant and actionable.
• Strategic planning works best when it is treated as ongoing practice rather than a one-time event.

BerryDunn can help

Ultimately, strategic planning is not about producing a document. It is about creating a framework that helps organizations make informed decisions, adapt to change, and move consistently toward a shared vision. The strongest plans provide enough structure to guide decision-making while remaining flexible enough to evolve alongside the communities they serve.

A neutral facilitator can help organizations navigate these discussions. By gathering input, guiding conversations, and building consensus without advancing a particular agenda, a facilitator can help communities create strategic plans that are actionable, reflective of shared priorities, and achievable.

BerryDunn's local government consulting team helps communities develop strategic plans that align stakeholder priorities, create organizational focus, and support long-term success. Whether your organization needs leadership and staff development guidance, a wide-ranging planning process, a strategic plan refresh, organizational development support, or change management assistance, our experienced consultants can help you build a roadmap for the future and turn vision into action. Learn more about our services and team.

Who this applies to: Leaders responsible for finance/accounting, risk management, compliance, operations, IT, and the C-suite at financial institutions.

The FMS East Coast Regional Conference recently brought financial professionals together in Annapolis, Maryland, for three days of learning, discussion, and networking. During the conference, we presented “The Future of Finance: How AI and Tech Can Transform,” a session focused on how artificial intelligence and automation are changing finance, accounting, risk, and operations within financial institutions.  

Our central message was straightforward: Financial institutions will not gain a lasting advantage simply by using AI. As these tools become more widely adopted, differentiation will come from how effectively leaders redesign processes, develop their people, strengthen governance, and improve decision-making.

Finance is moving from reporting to anticipating

Historically, many finance functions have concentrated on periodic reporting, manual reconciliations, historical analysis, and responding to issues after they occur. The emerging model is more continuous and forward-looking, with real-time visibility, automated monitoring, predictive insight, and proactive decision support.  

AI may help financial institutions move routine processing into the background while allowing finance professionals to spend more time interpreting information, advising leadership, and applying judgment. Potential applications include:

• Reconciliations
• Regulatory change monitoring
• Board-package preparation
• Vendor due diligence
• Internal audit planning
• Fraud detection
• Policy summarization
• Credit and liquidity analytics

Importantly, AI is not the same as traditional automation, which generally follows predetermined rules and structured inputs. AI-enabled solutions can work with structured and unstructured information and may generate, predict, summarize, or recommend. Those capabilities create meaningful opportunities, but they also introduce new risks.

Innovation must be matched with governance

Institutions considering an AI use case should ask several questions at the outset:

• Is the use case material?
• Who owns it?
• What data will the tool use?
• Could the output affect customers or members?
• What controls and monitoring will be necessary?
• What vendor risks are involved?

AI may introduce risks involving data quality, inaccurate or fabricated outputs, bias, cybersecurity, privacy, model drift, third-party vendors, overreliance, and governance. Addressing these risks begins with clearly defined ownership, appropriate board visibility, acceptable-use policies, approved tools, data restrictions, training expectations, and a documented risk assessment for each use case.

One of the most important principles from the session was to treat AI-generated outputs as assertions requiring evidence, not as facts. Depending on the use case, controls may include human review, performance testing, segregation of duties, source citations, third-party validation, exception management, and evidence retention.

What the case studies revealed

During the session, attendees worked through scenarios involving AI-assisted reconciliations, AI-generated board reporting, and regulatory change monitoring.

In the reconciliation scenario, an overly broad matching threshold caused the system to clear items incorrectly. In the board-reporting scenario, AI-generated commentary relied on an outdated ALCO assumption. In the regulatory-monitoring scenario, an incomplete source library caused the institution to miss an important update.

Although the scenarios involved different processes, the lessons about what matters were consistent, including:

• Data sources
• Human review
• Evidence
• Ongoing monitoring

The objective is not to slow innovation. It is to make innovation reliable.

Start with the process, not the technology

Institutions do not need to transform everything at once. A practical approach is to:

• Establish governance
• Inventory current use cases
• Assess risks
• Design controls
• Implement and communicate expectations
• Monitor and adapt

Before selecting a tool, leaders should map the existing workflow, identify bottlenecks and manual workarounds, locate sources of error or delay, and clarify ownership. Opportunities can then be prioritized based on business impact, frequency, risk reduction, feasibility, and data availability. A controlled pilot allows the institution to measure results, refine controls, and scale intentionally. 

For many institutions, practical starting points may include reconciliations and exception management, board-package summarization, internal audit risk assessment, regulatory change monitoring, and vendor contract review. More complex applications, including fraud detection, credit risk analytics, CECL forecasting support, liquidity forecasting, and continuous auditing, may provide significant value but require more deliberate governance. Autonomous approvals or high-impact customer decisions without meaningful human review should be approached with particular caution.

The future finance function will not remove people from the process. Instead, technology will perform more routine tasks while people remain responsible for judgment, ownership, challenge, and decision-making. The institutions best positioned for that future will be those that start thoughtfully, build governance into their initiatives, and scale only after they understand both the benefits and the risks.

Key takeaways

• Focus on process improvement, not just technology adoption, because long-term value from AI comes from better workflows, stronger governance, and more informed decision-making.
• Shift finance teams from historical reporting toward real-time insights, predictive analysis, and proactive decision support.
• Establish governance before scaling AI initiatives, including clear ownership, risk assessments, usage policies, data controls, and monitoring.
• Verify AI-generated outputs through human review and supporting evidence, treating AI results as assertions that require validation rather than fact.

About BerryDunn

Have a question about how your financial institution can thoughtfully assess its processes, train team members, create effective internal controls, and improve decision-making to maximize the value of AI? Please don’t hesitate to reach out. Learn more about our team and services.

Who this applies to: Compliance officers, risk managers, revenue cycle, or healthcare administrators in a specialty, primary care, prenatal, or pediatric practice, or Federally Qualified Health Center (FQHC).

Has your medical practice seen an increase in missed appointments? Is your practice seeking to improve attendance for preventive care services? If yes, are you evaluating whether to establish a patient incentive program? Before you proceed, there are federal and state rules that should be analyzed to determine whether to initiate a pilot incentive program.

Patient inducements

A well-designed incentive program must be structured neither to give the appearance of nor be perceived as a patient inducement, based on US Office of the Inspector General (OIG) guidance. The OIG’s nominal value threshold applies exclusively to non-cash items; cash in any form is prohibited, as are general-purpose prepaid cards. Cash equivalents are items that patients can convert to cash and use for any purpose, such as gift cards from “big box” stores. The nominal value (“de minimis”) threshold sets the following limits for gifts:

A. Per-item limit: No single gift can have a retail value above $15. 

B. Annual aggregate limit: The total value of all gifts to the same patient in a calendar year cannot exceed $75. 

The Beneficiary Inducement Prohibition of the Civil Monetary Penalties (CMP) Law 

This law differs from the scope of the federal Anti-Kickback Statute (AKS). The Beneficiary Inducements CMP provides for the imposition of financial penalties (i.e., CMPs) against any person who offers or transfers remuneration to a Medicare or Medicaid program beneficiary if this might influence the beneficiary’s selection of a particular provider or practitioner. Remuneration means anything of value, whether cash, cash equivalents, or below-market-value goods or services.

Violations of the Beneficiary Inducement Prohibition can result in monetary penalties, plus three times the amount claimed from federal programs, and potential exclusion from participation in federal healthcare programs. 

To determine whether a patient incentive program violates the Beneficiary Inducement Prohibition, the National Association for Community Health Centers (NACHC) recommends that an organization ask the following three questions:

1. Is your organization proposing to offer something of value (remuneration) to patients covered by Medicaid, the Children’s Health Insurance Program (CHIP), or Medicare?
2. Is the remuneration likely to influence patients’ decisions to receive goods and services for your organization?
3. Are the goods or services paid for by Medicaid, CHIP, or Medicare?

If the answer to all three questions is yes, then the patient incentive program violates the Beneficiary Inducement Prohibition unless it fits within an existing regulatory exception or safe harbor. 

What is a safe harbor?

The Department of Health and Human Services (HHS) has the authority to protect certain arrangements and payment practices (i.e., safe harbors) under the federal AKS. The safe harbor regulations are updated periodically to reflect changing business practices and technologies in the healthcare industry. These safe harbor provisions have been developed to limit the reach of the statute somewhat by permitting certain non-abusive arrangements (42 CFR 1001.952 Safe Harbors), while encouraging beneficial or innocuous arrangements.

One example is the Preventive Care Services Exception. The regulatory definition of preventive care, for purposes of this exception, means any service that: (1) is a prenatal service or a post-natal well-baby visit or is a specific clinical service described in the current US Preventive Services Task Force’s Guide to Clinical Preventive Services and (2) is reimbursable in whole or in part by a federal healthcare program.  

Clearly define your strategy

• Define the population of patients eligible for the incentive pilot program, purpose, types of eligible visits (i.e., those scheduled based on the treatment plan) and the criteria for earning an incentive. Consider limiting eligibility for participation in an incentive pilot program to established patients, patients at a certain stage of a treatment plan, and/or a particular program.
• Establish a documentation system to track the annual gift disbursement process.
• Refrain from advertising a pilot attendance incentive program in new patient brochures or other marketing collateral to avoid the appearance of improper patient inducement or recruitment.
• Document which safe harbor is relevant to your pilot program. If there are any questions about whether the proposed incentive program qualifies, your organization may seek an advisory opinion from the OIG.
• Confirm that your incentive strategy does not violate any state rules prior to implementation.

Does your state have rules pertaining to incentives, lotteries, and raffles? Depending on your healthcare organization’s corporate status, the term “raffle” may be impermissible. For example, California only permits raffles to be conducted by nonprofit organizations; interested nonprofit organizations must apply for a raffle registration on an annual basis.

BerryDunn can help

Has your healthcare organization evaluated its strategies to promote patients’ attendance for well-child visits or prenatal care or other ambulatory services? If you already have an existing incentive program, have you evaluated it recently to determine whether or not it falls within a safe harbor? Are there any relevant state regulatory requirements that should be evaluated? 

Our healthcare compliance team can help. We incorporate deep, hands-on knowledge with industry best practices to help your organization manage compliance and revenue integrity risks. Learn more about our healthcare compliance consulting team and services.

Additional resources:

• General Questions Regarding Certain Fraud and Abuse Authorities | Office of Inspector General | Government Oversight | U.S. Department of Health and Human Services 
• Federal Register: Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements 
• Structuring Patient Incentive Programs to Minimize Risk Under Federal Laws
• https://www.nachc.org/nachc-content/uploads/2024/12/Issue-Brief-Structuring-Patient-Incentive-Programs-to-Minimize-Risk-Under-Federal-Laws
• HHS OIG Fact Sheet on Beneficiary Inducements
• Advisory Opinion Process | Office of Inspector General | Government Oversight | U.S. Department of Health and Human Services