corrections

Read this if you are a CFO, COO, or a revenue cycle or finance professional at a healthcare organization. 

While uncertainties remain until this bill moves through the US Senate, now is the time for healthcare organizations to develop a strategic plan. This article offers guidance on potential impacts and how to prepare for them. 

The proposed $880 billion cuts to Medicaid, along with recently imposed tariffs and funding freezes, have placed healthcare organizations directly in the crosshairs of federal funding reductions. The result is an unprecedented threat that would profoundly affect the financial stability of organizations providing care. 

The effects of proposed Medicaid cuts 

A closer look at the impact proposed changes would have on healthcare organizations illustrates the interconnectedness of the system.  

• Changes to eligibility requirements for Medicaid coverage will reduce the number of insured and result in patients delaying or skipping preventative care. 

• Major commercial payers have traditionally subsidized Medicaid underpayments through higher reimbursement rates. The changes would increase pressure on carriers and hospitals to figure out how to do more with less. 

• Proposed co-payments for services covered under Medicaid will increase the collection burden of healthcare providers. 

• Uncompensated care will increase at hospitals and lead to overcrowded emergency departments, which EMTALA (Emergency Medical Treatment & Labor Act) stipulates must provide emergency care to anyone requesting it.  

• Costs for care under EMTALA are absorbed through various federal, state, or local programs. These programs are disappearing, leaving hospitals financially vulnerable with no guaranteed reimbursement for services. 

• Rural hospitals could be forced to end specialty services or close.  

• Enhanced premium tax credits implemented during the COVID-19 pandemic are set to be rolled back and could cause millions to lose healthcare, exacerbating the crisis of uninsured Americans.  

• Many medical practices already limit Medicaid patients due to low reimbursement. Cuts are likely to further lower participation and limit access to care. 

• Community health centers could lose federal grants tied to Medicaid enrollment, which could lead to closure. 

• Medicaid is the largest payer for long-term care facilities and nursing homes. Changes to retroactive eligibility (from three months to one month) and other funding cuts would lead to staffing shortages, lower quality of care, and facility closures.  

• Increased scrutiny and regulatory changes on Medicaid could decrease already low reimbursement rates, causing some of the major commercial providers of managed Medicaid to pull out, further limiting access to healthcare and increasing pressure on already understaffed and underfinanced organizations.  

• Medical providers and commercial payers would pass along increasing costs for procedures to employer groups and individuals, resulting in premium and cost-sharing increases.  

The proposed reductions confront healthcare organizations with difficult decisions about what they can and will continue to fund.  

Tariffs and the medical supply chain 

The administration’s proposed and current tariffs are also greatly impacting healthcare organizations through the supply chain. Organizations build supply costs at a set rate into their reimbursement arrangements with commercial payers projecting minor fluctuation. If the cost of necessary supplies increases, they are at a loss. Some examples of tariff-related supply chain reimbursement issues include: 

• Everyday supplies like disposable medical gloves, which are widely used across the industry and of which 90% are manufactured overseas and are not billable. With the introduction of tariffs, the costs have skyrocketed.  

• Implants and devices are also manufactured overseas—all of which have been hit with tariffs.  

• Pharmaceuticals are manufactured all over the world. Even drugs manufactured in the US often include an active ingredient that is imported.   

The tariffs have created a ripple effect. Increased costs are absorbed by consumers, and in some cases have forced providers to reduce services or even shut their doors when combined with the rising cost of labor in the US and reimbursement changes. 

Funding freeze impacts  

An Executive Order (EO) earlier this year related to the cessation of payment grant support deeply affected healthcare organizations. Despite these federal funds being appropriated, the EO stopped payments, putting many programs and organizations in jeopardy.  

From healthcare facilities providing emergency care to the uninsured to community health centers reliant on 340b and grant funding to remain sustainable, and nonprofit entities providing social and behavioral services, hospitals, and more, the funding stoppage has impacted the industry. For some, it meant not making payroll, or ending programs or services, and for others it forced their closure, further restricting access to care in communities.  

Developing a plan 

Healthcare organizations need to be strategic to weather the current uncertainties. Find ways to position your organization by analyzing its financial situation and creating an innovative roadmap. 

• Hospitals have been mentioned in the discussion surrounding nonprofit status. Consider what would change if you lost your tax-exempt status. Are there changes you could be making now that could mitigate potential implications of a change? 

• Look at your payer mix. Are there ways to manage it to your advantage?  

• When was the last time you negotiated your commercial payer contracts? Are there clauses in the contract that would allow other items to be billed or fluctuations in cost?  

• For nonprofits, take a hard look at all sources of funding. Are there unrestricted funds, such as philanthropic gifts, that could be shifted, if necessary?  

• How can you optimize your payment structure? Are you billing for the things you should be billing for? Are you collecting everything that you should be collecting? Confirm you aren’t leaving any reimbursement opportunities on the table. 

• Examine your margin compression and identify where you might be able to find efficiencies. Find the waste and remove it.  

• If you’re a nonprofit, read Surviving a funding freeze: Essential strategies for nonprofits. 

While the cost of delivering healthcare has steadily risen, Medicaid reimbursements have not adjusted proportionally. With the proposed Medicaid changes, healthcare organizations must strategically prepare by analyzing financial outcomes at every level. BerryDunn’s team of experts can help you optimize your revenue and find thoughtful solutions to minimize your risk, allowing you to remain operational. Learn more about our team and services. 

The US Department of Health and Human Services Office of Inspector General (HHS-OIG) has been actively enforcing healthcare compliance and fraud prevention in 2025. Here’s what healthcare providers need to know.  

Recent enforcements 

In April, there were three enforcement actions taken against providers who have breached their integrity agreements. 

1. April 3, 2025: $22,000 penalty 

2. April 17, 2025: $74,000 penalty  

3. April 18, 2025: $1,600 penalty 

Due to the cumbersome nature of corporate integrity documents, BerryDunn encourages its clients to revisit these documents often to help ensure important deadlines are met.  

Increased enforcement areas 

There has been a noticeable uptick in enforcement for two areas in particular—wound care and incident-to billing.  

Skin substitutes have also landed on the OIG work plan this year. 

• Medicare Part B payments for skin substitutes 

• Implementing average sales price reporting requirements for skin substitutes 

Clients have been flagged by payers for issues with claims and disclosure of rebates and discounts. CMS has decided to delay finalizing the proposed LCD (Local Coverage Determination) for skin substitute grafts and cellular/tissue-based products used in the treatment of chronic non-healing wounds until January 2026. However, we don’t anticipate this will reduce the number of audits.  

Incident-to billing continues to be a hot topic and one of confusion for many clients. Organizations may want to consider having a third-party probe audit to help ensure appropriate coding and clinical documentation.  

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help ensure your operation is compliant and efficient. Learn more about BerryDunn’s team and services. 

Read this if you are a board member or c-suite executive of a community bank.

When it’s time to change auditors, it’s important to find a firm that feels like a long-term partner—one you can grow with over time. The key to finding that fit is asking the right questions up front. Before moving forward with a firm, make sure you’re comfortable with their answers to the following: 

1. Does the firm have experience in your industry? 
   Look for an audit partner who understands the specific challenges and technical requirements of your industry. Experience in your sector ensures a more accurate and efficient audit while reducing the risk of audit failures, such as independence issues or incorrect implementation of new accounting standards. Audit failures can be costly and erode confidence with your board, investors, and regulators. 
    
2. Has the firm worked with organizations similar to yours? 
   Familiarity with your size, structure, and operations allows the audit team to navigate the process more effectively, saving you time and effort. 
    
3. Does the firm stay current with relevant financial reporting requirements? 
   With regulations constantly changing, your auditor should stay up-to-date and proactively inform you of any updates that might impact your organization. Reviewing a firm’s content and resources can give you an idea of how invested they are in keeping current. 
    
4. Is the audit process efficient and minimally disruptive? 
   Choose a firm with systems and experience that allow them to conduct a thorough audit without placing unnecessary strain on your team. 
    
5. Do you have year-round access to the audit team? 
   A good audit partner offers ongoing support and is available for consultation throughout the year, not just during the audit. In a world where change is constant, partnering with a firm that keeps you informed year-round is invaluable. 
    
6. Does the firm offer additional specialized services? 
   As your organization grows, so will your needs. A firm that offers a broad range of services can support you well beyond just the audit. 
    
7. Is the firm selective about its clients? 
   A reputable audit firm carefully chooses its clients, focusing on industries where they have proven expertise and can deliver true value. 
    
8. What do their clients say about them? 
   This is all about culture. Does the firm "do the right thing" when it matters? Do they value integrity, curiosity, and relationships? A firm that treats its clients with respect and operates with integrity will provide lasting value. 

A great audit partner empowers you, educates you, and supports you through changes with confidence. They work hard to do things the right way—because when it comes to financial institutions, that’s the only way. 

Take the stress out of your next audit 
Audits don’t have to be stressful. When switching audit firms, the right support makes all the difference. Choosing a financial services provider is more than just a business decision—it’s a relationship that can significantly impact your financial future. Take your time, ask the tough questions, and prioritize trust, expertise, and alignment with your long-term goals.  

At BerryDunn, we’re here to make the process smoother, easier, and a lot less stressful. Our Financial Statement Audit team helps you stay prepared, minimize disruption, and feel confident that you’re doing the right thing—for your business, your stakeholders, and your peace of mind. 

Learn more about our team and services.  

Read this if you work in management at a higher education institute or another nonprofit organization. 

On May 5, 2025, the US Department of Education (ED) issued a Dear Colleague Letter (DCL) to higher education institutions. The DCL outlined current default rates for federal student loans and the expected impact on these rates with the resumption of collection efforts on defaulted loans. ED suspended collection efforts on these loans in March 2020 to help combat the economic crisis created by the COVID-19 pandemic. According to ED, an estimated 25% of individuals currently in repayment are in default or significantly delinquent. It’s important to take a closer look at the impact increased default rates could have on higher education institutions and other nonprofit organizations, and how to remain compliant. 

Impact on higher education institutions 

Federal regulations require higher education institutions to track and maintain low cohort default rates (CDR). If an institution has a CDR higher than 40% in a single year or exceeds 30% for three consecutive years, the institution will lose their eligibility to receive federal student assistance. ED’s resumption of collection efforts on defaulted federal student loans is expected to increase institutions’ CDR.  

The DCL emphasizes the role institutions play in contacting former students to remind them of their responsibility to repay their federal student loans. If an institution were to become ineligible to receive its annual federal student assistance, funding would severely impact the institution’s ability to continue operations.  

The CDR regulation is three years in arrears, which means the 2026 default rate will include students who entered into repayment in 2023. Based on this, institutions should: 

• Start contacting former students in repayment before 2026 to help them avoid defaults 
• Monitor their CDR continuously to mitigate the risk of becoming noncompliant with federal regulations and to reduce the risk of losing eligibility to receive federal student assistance funding 

Impact on other nonprofit organizations 

While higher education institutions bear the direct impact of increased default rates on federal student loans, other nonprofit organizations should also be aware of how these defaults could affect their operations. Many former students with federal student loans work at nonprofit organizations, which often receive various forms of federal assistance. These organizations must verify that federal funds are not paid to businesses or individuals, including employees, who are suspended or debarred by the federal government. This is because suspension or debarment can result from defaulting on federal student loans, as well as for other reasons.  

As more individuals are expected to default, the list of those debarred or suspended from receiving federal payments could grow. Nonprofits are required to periodically review their vendors and employees to verify they are not suspended or debarred. If identified as such, these vendors and employees would be ineligible to receive any payment for goods or services, including wages, through federal funding, including Medicaid.

It's crucial for nonprofit organizations to regularly monitor the suspension and debarment list, which frequently changes, to maintain compliance. Organizations can support their employees by communicating the importance of making student loan payments and avoiding default. Helping employees understand how their student loan payments can impact their employment may encourage timely payments and prevent defaults.  

With collection on default federal student loans back in effect, it’s imperative that higher education institutions and other affected nonprofits follow these strategies to ensure compliance. Learn more about BerryDunn’s team and services. 

After an intense overnight session, the US House of Representatives narrowly passed the "One Big Beautiful Bill Act" with a 215-214 vote, marking a significant milestone in fiscal policy reform. The bill, which now heads to the Senate for further consideration, proposes extensive tax changes alongside broader regulatory shifts. While House Republicans and the current administration champion the bill as a legislative victory, Democratic opposition remains strong, and modifications are expected before it reaches the president’s desk.

Major tax provisions

At the heart of the legislation is a sweeping restructuring of federal tax policy. The bill seeks to permanently extend key tax cuts from 2017, while also introducing temporary incentives aimed at stimulating economic growth.

• Locking in individual and estate tax cuts.
• Tax reductions from the 2017 Tax Cuts and Jobs Act (TCJA) will become permanent, preventing their previously scheduled expiration.
• The estate tax exemption will rise to $15 million, adjusted for inflation, allowing high-net-worth individuals to transfer wealth with fewer tax burdens.

Temporary benefits for workers and families (expiring in 2028)

Acknowledging the financial pressures facing American households, the bill introduces several temporary tax incentives:

• Exemptions on tips and overtime compensation, providing relief to service workers and those reliant on extra income.
• Tax-exempt status for interest on specific US-assembled automobile loans, potentially lowering borrowing costs.
• An increase in the standard deduction: an additional $1,000 for individual filers ($16,000 total) and $2,000 for joint filers ($32,000 total).
• A boost to the child tax credit, raising it by $500 to $2,500 per child for tax years 2025 through 2028.

Expanding deductions for high-tax states

One of the bill’s most anticipated revisions is its adjustment of the state and local tax (SALT) deduction cap:

• The cap will increase from $10,000 to $40,000 for households with adjusted gross incomes up to $500,000, alleviating tax burdens in high-tax states.
• For higher-income earners, the deduction gradually phases down, limiting revenue losses for the federal government.

Business tax reforms and incentives

Businesses are among the biggest beneficiaries of this legislation, with several key tax advantages aimed at stimulating investment and innovation.

Encouraging capital investments

• The bill restores 100% bonus depreciation for eligible assets acquired between January 20, 2025, and 2029, allowing businesses to fully deduct the cost upfront.
• The Section 179 deduction cap is raised to $2.5 million, encouraging companies to reinvest in equipment and infrastructure.
• Pass-through entities will see a qualified business income (QBI) deduction increase from 20% to 23%, reducing tax liabilities for small business owners.

Modernizing research and development (R&D) tax treatment

To foster innovation, the legislation reshapes R&D deductions:

• Businesses investing in domestic research can either deduct costs immediately or amortize them over 60 months.
• Foreign R&D costs remain unchanged, reflecting concerns about outsourcing innovation.

More favorable business interest deductions

Under IRC Section 163(j), companies can now add back depreciation, amortization, and depletion when calculating limits on interest deductions, helping firms that rely on capital financing.

Controversial provisions and policy shifts

While many business owners welcome the tax incentives, other aspects of the bill have sparked debate—particularly those affecting environmental initiatives and international taxation.

Scaling back clean energy tax credits

Several clean energy tax credits from the Inflation Reduction Act (IRA) are now subject to elimination or accelerated phase-out.

• Supporters argue that this move reduces unnecessary subsidies.
• Environmental groups warn that these rollbacks could slow the transition to renewable energy and discourage green investments.

Targeting "unfair foreign taxes"

A new provision, Proposed Section 899, is designed to address foreign tax policies:

• It imposes higher US tax rates on individuals from nations that impose restrictive or unfair taxes on American citizens or corporations.
• Critics view this measure as potentially fueling trade tensions and diplomatic disputes.

Excise tax on remittances

A 3.5% excise tax will now apply to remittances sent by non-US citizens to family members abroad.

While proponents frame this as a revenue-generating strategy, opponents argue that it disproportionately affects immigrant communities.

What happens next?

As the bill moves to the US Senate, its fate remains uncertain. While Republicans tout its provisions as an economic boost, Democratic lawmakers continue to scrutinize its potential effects on income inequality, environmental sustainability, and trade relations.

Taxpayers—whether individuals or businesses—should pay close attention as amendments emerge. With negotiations underway, the final legislation could see additional revisions, altering tax credits, deductions, and corporate incentives.

For now, those impacted by the bill should begin assessing how these provisions align with their financial strategies, preparing for potential tax shifts in the coming years.

BerryDunn's tax consulting and compliance team brings deep experience and extensive resources to each client’s unique tax situation. We work closely with you to develop comprehensive, coordinated strategies to ensure tax compliance, limit exposure, and optimize performance. Learn more about our team and services.