system implementation

Executive Order (EO) 14221 released on February 25, 2025, directed the Secretaries of Labor, Health and Human Services (HHS), and the Treasury to implement changes to improve implementation and increase enforcement of the hospital price transparency (HPT) rule. On May 22, 2025, the agencies announced progress in implementing the EO, including issuance of a request for information (RFI), as well as providing updated guidance regarding requirements for machine readable files. 

HPT enforcement 

An HHS Office of Inspector General (OIG) audit report released in November 2024 estimated only 46% of hospitals were in compliance with HPT rule requirements. While the HHS OIG noted a variety of issues with shoppable services requirements, the most common areas of non-compliance observed related to the machine readable file (MRF), including: 

• Failing to update the file annually 

• Lack of appropriate naming conventions 

• Providing negotiated charges by payer/plan

Civil monetary penalties (CMP) for HPT non-compliance range from $300 to $5,500 per day, depending on hospital bed count. From 2021 – 2024, CMS issued CMP notices totaling approximately $5 million.  

Based on reports from our clients and anecdotes shared by compliance and finance colleagues and from presenters at recent conferences, HPT-related complaints from patients have remained minimal, whereas the pace of CMS non-compliance warning letters has increased. 

Practical tips for HPT compliance 

The risks related to non-compliance with HPT rules can be mitigated through a multidisciplinary team approach, establishing accountability, and engaging external resources to fill gaps in expertise. 

• Making certain to include the functions with an HPT role, such as finance, revenue cycle, revenue integrity, compliance, IT, and payer contracting 

• Considering the vendor as part of the team if any aspect of HPT rule compliance is outsourced 

• Designating an internal resource to monitor and advise your team on HPT-related announcements from regulators and CMS enforcement activity 

• Linking chargemaster/CDM and fee schedule updates to MRF and shoppable services maintenance activities supports compliance with multiple HPT requirements 

• Adding HPT-related audit items to the compliance work plan to demonstrate internal oversight 

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help your organization manage compliance and revenue integrity risks. Learn more about BerryDunn’s team and services. 

As financial institutions continue to navigate evolving regulatory landscapes, the recently enacted OBBBA legislation introduces a noteworthy incentive aimed at supporting rural and agricultural development. Effective July 4, 2025, the bill provides a 25% federal income tax exemption on interest income earned from qualifying rural or agricultural real estate loans.  

This represents a strategic opportunity for lenders to reassess their portfolios and tax planning strategies. With further guidance expected, institutions should begin preparing to identify eligible loans and evaluate the broader implications of this new provision. 

Key information for financial institutions 

• Effective date: Applies to qualifying loans originated on or after July 4, 2025. 
• Exemption: 25% of the interest income earned on these loans will be tax-exempt. 
• Ineligible loans: Refinanced loans do not qualify. 
• Qualified loans: Loans must be secured by rural or agricultural real estate, defined as property substantially used for: 

• Producing agricultural products (not defined) 
• Fishing or seafood processing 
• Aquaculture (hatcheries, rearing ponds, pens, etc.) 
• Leasehold mortgages on such real estate also qualify, provided they have lien status 

Please also note that, similar to municipal bond investments, these loans are subject to IRC Section 265, which may limit deductibility of interest expense allocable to the tax-exempt income. 

Considerations for financial institutions

Loan identification and tracking: Determine whether any existing lending activity aligns with these definitions and develop a method for flagging and tracking qualifying loans after the effective date. 

Strategic expansion: Assess whether this creates an incentive to expand your presence in agricultural or rural real estate lending. 

Loan pricing models: Revisit pricing for these types of loans to account for the blended tax benefit and any associated disallowed interest expense. 

Tax planning: Analyze how this partial exemption could affect your effective tax rate and broader tax strategies going forward, particularly as it creates a permanent tax difference. 

About BerryDunn

BerryDunn's dedicated audit, tax, and consulting professionals understand the financial services industry and its challenges and are committed to helping you meet and exceed regulatory requirements. We partner with you to bring tailored approaches to fit your needs and operations and provide guidance on best practices and recommendations that make sense for you. Learn more about our services and team.  

The FDIC's Quarterly Banking Profile for quarter one 2025 reports the performance for the 4,022 community banks evaluated. Here are the key highlights: 

Note: Graphs are for all FDIC-insured institutions unless the graph indicates it is only for FDIC-insured community banks. 

Financial Performance 

• Quarterly net income rose by $621 million (10.0%) from the previous quarter to $6.8 billion, with 55.8% of community banks reporting an increase. 

• Pretax return on assets increased to 1.18%, up 11 basis points quarter over quarter and 6 basis points year over year. 

• Net interest margin rose to 3.46%, up 2 basis points from the prior quarter and 23 basis points year over year.

Costs and Efficiency 

• Noninterest expense fell by $423.2 million (2.3%) from the previous quarter but increased 6.0% year over year. 

• Provision expenses declined by 19.0% quarter over quarter, but increased 34.3% year over year, signaling growing concern over potential credit losses. 

• Efficiency ratio improved to 64.69%, down 39 basis points from the prior quarter, indicating better cost control relative to revenue. 

Loan and Deposit Trends 

• Loan and lease balances increased by $15.1 billion (0.8%) quarter over quarter and 4.9% year over year, led by nonfarm nonresidential CRE and 1–4 family residential loans. 

• Domestic deposits rose 1.6% quarter over quarter and 5.2% year over year, with stronger growth in interest-bearing than noninterest-bearing accounts. 

• More than half (59.1%) of community banks reported loan growth, and 69.4% reported deposit growth during the quarter. 

Asset Quality 

• Past-due and nonaccrual loans (PDNA) increased 12 basis points to 1.32%, mainly driven by nonperforming farm and CRE loans. 

• Net charge-off ratio decreased 9 basis points from the prior quarter to 0.15%, matching pre-pandemic levels. 

• Reserve coverage ratio declined significantly to 168.8%, indicating that allowance growth lagged increases in noncurrent loan balances. 

Capital and Structural Stability 

• Capital ratios improved modestly across the board: CBLR rose to 12.30%, and the leverage capital ratio increased to 10.91%. 

• Unrealized losses on securities fell by $6.2 billion (12.4%) from the prior quarter to $43.9 billion total. 

• Community bank count declined by 24 during the quarter due to mergers, transitions, and one failure. 

Conclusion and Outlook 

The first quarter of 2025 was off to a hot start for the banking industry, as seen by the increase in net income, primarily driven by higher net interest income. Net interest margins benefited from a 23 basis point increase from the previous year—a stark change from a year prior. But challenges remain for the industry, as past-due and nonaccrual loans continue to climb (albeit from historically low levels). Even with the continued increase in past-due and nonaccrual loans, net charge-offs remain at historical lows and actually decreased from the previous quarter. 

Regulatory trends continue to dominate headlines, with the most notable changes surrounding tariffs and the recently signed One Big Beautiful Bill Act (OBBBA). Although both tariffs and the OBBBA may have significant direct implications for financial institutions, borrowers will also be significantly impacted, and possibly more so than financial institutions. Financial institutions should be proactive with borrowers, reaching out to inform them of potential changes and seeing how they believe they may be impacted prospectively. This proactive communication will not only signal to borrowers that you are looking out for them but will also allow you to identify potential problem areas early on. As always, your BerryDunn team is here to help! 

Read this if you are a CFO or on the fundraising team at a nonprofit organization. 

Capital campaigns can be game changers for nonprofits, enabling bold investments in infrastructure, programs, and long-term growth. Whether you're building a new facility, expanding services, or upgrading technology, a capital campaign aligns fundraising with your strategic vision. 

When to consider a capital campaign 

A capital campaign may be right if your organization lacks the funds for a major initiative or your annual budget is unable to support a strategic opportunity. Capital campaigns are also ideal for: 

• Infrastructure improvements  

• Major construction or renovations  

• New or expanded programs 

Capital campaigns often inspire larger gifts and deeper donor engagement than annual appeals, especially when the purpose is clearly communicated.   

Key success factors 

A successful campaign requires more than passion; it demands planning, clarity, and commitment from leadership and the board. Consider these best practices: 

• Clear messaging: Campaign materials should define the fundraising goal, project purpose, and how funds will be used. Avoid overly restrictive language if flexibility is needed. 

• Community engagement: Events, media outreach, and visibility efforts help build momentum and attract new supporters. 

• Board involvement: Active leadership from your board and executive team is essential to credibility and success. 

If you're including an endowment component, remember: Endowed gifts are donor-restricted in perpetuity. Only investment returns, not the original gift, can be used for the restricted purpose. The availability of investment returns is typically determined by a board-approved spending policy that follows the Uniform Prudent Management of Institutional Funds Act (UPMIFA). 

Accounting for capital campaigns under GAAP 

Proper classification and reporting are critical. Follow FASB ASC 958-205 to ensure compliance: 

• Purpose-restricted gifts: Recognized as donor-restricted until the specified use or time condition is met. 

• Endowment gifts: Always classified as donor-restricted in perpetuity; only earnings may be used per the donor’s intent and your spending policy. 

Final thoughts 

In uncertain economic times, a well-executed capital campaign can provide the resources and energy your nonprofit needs to thrive. With the right strategy, your campaign can strengthen donor relationships, elevate your mission, and leave a lasting impact. 

BerryDunn’s team of professionals serves a range of not-for-profit organizations, including but not limited to educational institutions, foundations, behavioral health organizations, community action programs, conservation organizations, and social services agencies. We provide the vital strategic, financial, and operational support necessary to help nonprofits fulfill their missions. Learn more about our team and services.  

CMS recently extended the deadline for the mandatory SNF provider enrollment off-cycle revalidation to January 1, 2026.  

As we wrote about previously, CMS issued a significant off-cycle mandate requiring all skilled nursing facilities (SNFs) in the US—both for-profit and nonprofit—to revalidate their Medicare provider enrollment records. Originally due by May 1, 2025, then August 1, 2025, the deadline has now been extended to January 1, 2026, giving facilities additional time to comply. This revalidation is essential to maintain Medicare billing privileges and incorporates more rigorous disclosure requirements than ever before. 

The updated process centers around expanded transparency in ownership and control structures. SNFs must report detailed information on all individuals and entities with ownership or managerial roles, including a new category called Additional Disclosable Parties (ADPs). These include anyone who exercises operational, financial, or managerial control, provides real estate, or delivers services such as consulting or accounting. CMS has updated Form CMS-855A and developed a 20-page SNF-specific attachment to capture this information, along with detailed guidance to help facilities navigate the changes. 

The scope of disclosure has also broadened to include parties with formal and informal influence over SNF operations, such as managing employees, consultants, and organizations with financial or operational oversight. Facilities must report granular data on both individuals and organizations, such as ownership percentages, tax IDs, NPIs, and the nature of their relationship to the SNF. The complexity of these requirements makes it critical for SNFs to assess their internal structures, collect necessary documentation, and continue to evaluate management and other changes on a routine basis. Among the many supporting documents required for this effort, CMS is placing a significant emphasis on an organizational chart that outlines the relationships of all organizations and individuals disclosed within the revalidation application. 

To support compliance, CMS encourages the use of its PECOS online portal for submissions and offers help through various channels. Many SNFs are also turning to legal counsel and credentialing professionals for guidance. Firms like BerryDunn have developed tools and resources to help facilities organize and track the required data. While the new January 1, 2026, deadline allows an additional runway, SNFs are encouraged to complete this recertification as soon as possible. Proactive planning and responding to any additional requests (CMS allows a 30-day window for corrections once applications are submitted) is essential to avoid disruptions in Medicare participation. 

We're here to help 

As you prepare, it can be helpful to work with an experienced team of credentialing professionals who will help you navigate the complex process of meeting the new revalidation requirements. BerryDunn’s Credentialing and Enrollment Team is available to offer guidance and support to client organizations as they collect, organize, and track ownership, control, and ADP information, and to guide them through the CMS revalidation process. Additional CMS resources are available, including a dedicated email, SNFDisclosures@cms.hhs.gov, and PECOS support, via the External User Services (EUS) Help Desk. The Help Desk can also be reached by phone at 1.866.484.8049 or email at EUS_Support@cms.hms.gov.