Finance & Enjoyment Blog

Your Financial House: Tips from KKB, Your CPA Denver Resource

Here at KKB, our passion is helping our clients navigate tax changes and providing your practice expert advice on financial matters that help your bottom line. In the past few months, we’ve talked a lot about the new Health Care Reform Act and its tax implications within the healthcare industry. Now that 2014 is here, we’d be amiss if we didn’t give you a few financial impacts to keep in mind for the rest of the year.

Changing payer mix affecting margins – The aging population will start to move to Medicare or other exchange programs. This trend will negatively affect margins because patients are going to pay more for healthcare expenses as higher deductible plans become more common. Your practice needs to be aware of these changes in your margins because your bad debt expense will increase as a result.

Disproportionate share hospital (DSH) payments ¬– The theory behind cuts in DSH reimbursement is sound: Reduced bad debt expense from a reduction in the uninsured population will offset reduced DSH reimbursement. However, individual circumstances and demographics may limit the increase in enrolled lives. Even with increased Medicaid coverage, there will be significant working capital requirement as accounts receivable increases – Medicaid programs are traditionally not the fastest payers.

Portfolio management – Healthcare systems should continually evaluate their portfolio of facilities in the context of return on assets and strategic importance for population health management. Consider divestiture of entities that do not currently provide either or both. Re-allocating capital investment is a critical aspect of survival in this increasingly challenging environment.

How to use this Information These are just a few of the impacts that you may see in 2014. Contact KKB at 303-815-1100 or visit our website at www.kkb-cpa.com for other financial impacts that you need to be aware of. Because at KKB we believe in enjoying each day and that everyone has value to contribute. We actively contribute through continuous learning, dedicating ourselves to our client’s success, living with integrity and working hard. Our enjoyment comes from building strong, long-term, enjoyable relationships and helping our clients proactively achieve their goals.

How are you preparing for these changes in 2014?


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