Audit Your Practice Like a CPA

Transcription

1 National Association of Rural Health Clinics Audit Your Practice Like a CPA Jeff Bramschreiber, CPA Health Care Partner March 21, 2018 Wipfli LLP 1

2 Audit Overview Do-It-Yourself Audit Approach Conclusion/Take-Aways Wipfli LLP 2

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4 What Is an Audit? An audit is the examination of an entity's accounting records, as well as the physical inspection of its assets. If performed by a certified public accountant (CPA), the CPA can express an opinion on the fairness of the entity's financial statements. This opinion is then issued along with the financial statements to the investment community, owners, and other stakeholders. Wipfli LLP 4

5 Audit Cost vs. Benefit Benefits Reassurance to investors/lenders Internal control/safeguarding of assets Educational to physician/owners Performance measurement for employees Possible support in the event of an investigation (attorney client privilege must be considered) Costs Significant professional fees Ongoing time/cost performing testing and maintaining records of results Wipfli LLP 5

6 When Does An External Audit Make Sense? When it is required by law (e.g. publicly traded). When it is required by a lender (e.g. bank) or grantor (e.g. HRSA). When attempting to attract investors or donors. When there are absentee owners. When seeking outsiders perspective on financial operations and results. Wipfli LLP 6

7 The Auditing Process Understand the Client and Environment Perform Risk Assessment Test Controls Substantiate Account Balances Issue Audit Report Wipfli LLP 7

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9 DIY Audit Approach Six Potential Risk Areas for Rural Health Clinics: 1. Internal Controls and Accounting System Design. 2. Rural Health Clinic Conditions of Certification. 3. Provider-Based Qualifications. 4. Billing and Coding. 5. Medicare/Medicaid Cost Reporting and Settlements. 6. Accounts Receivable Valuation. Wipfli LLP 9

10 DIY Audit Approach 1. Internal Controls and Accounting System Design. Resources for auditing Internal Controls and Accounting System Design: Job Descriptions and Accounting Procedures. Segregation of Duties; Checks and Balances. Evidence of Oversight by Owners/Directors. Financial Reporting and Reviews. Budgets and Budget-to-Actual Analysis. Wipfli LLP 10

11 DIY Audit Approach 2. Rural Health Clinic Conditions of Certification ( CofC ). Resources for auditing compliance with CofC : Form CMS 30. State Operations Manual (SOM) Appendix G. AAAASF or The Compliance Team survey checklists. RHC Policy and Procedure Manual. Wipfli LLP 11

12 DIY Audit Approach 3. Provider-Based Qualifications. Resources for auditing compliance with provider-based qualifications: CMS Transmittal A (April 18, 2003). Medicare Administrative Contractor sample attestation statement. CMS Provider-Based Designation Checklist (updated October 27, 2017). Provider-Based Attestation Statements filed by the facility. Wipfli LLP 12

13 DIY Audit Approach 4. Billing and Coding. Resources for auditing billing and coding compliance: Billing guidance in RHC Technical Assistance webinar (February 2, 2018). Chart reviews conducted for annual RHC Program Evaluation. Third party payer denial reports. Office of Inspector General (OIG) Compliance Program. Practitioner code frequency statistical analysis. Wipfli LLP 13

14 DIY Audit Approach 4. Billing and Coding (continued). Sample practitioner code frequency statistical analysis. Wipfli LLP 14

15 DIY Audit Approach 5. Medicare/Medicaid Cost Reporting and Settlements. Resources for auditing cost reporting: Audited/finalized cost reports with adjustments. Filed but not audited cost reports. Medicare Provider Reimbursement Manual, Cost Reporting Forms and Instructions. State Medicaid Program, Cost Reporting Instructions (varies by state). NARHC Rural Health Clinic Benchmark Report. Wipfli LLP 15

16 DIY Audit Approach RHC Benchmark Report A NARHC Member Benefit Compare your RHC productivity and costs with providerbased RHCs in your state, region, and nationally. Wipfli LLP 16

17 DIY Audit Approach 5. Medicare/Medicaid Cost Reporting and Settlements (cont). RHC Benchmark Report RHC MI Mean Midwest Mean Nation Mean Number of Facilities ,094 Encounters per FTE: Physicians 8,500 3,688 3,857 4,274 Physician Assistants 2,398 3,200 3,171 3,145 Nurse Practitioners 0 3,071 2,722 2,884 Visiting Nurses Midlevel Staffing Ratio 90% 49% 51% 53% Midlevel Visit Ratio 72% 45% 44% 44% Cost per Encounter: Physician Physician Assistant Nurse Practitioner Visiting Nurse Clinical Psychologist/Social Worker Total Health Care Staff Cost Cost per FTE: Physician 2,263, , , ,802 Physician Asstistant 0 129, , ,904 Nurse Practitioner 0 110, , ,413 Total Healthcare Staff Costs per Provider FTE 129,642 86,509 96,463 93,011 Wipfli LLP 17

18 DIY Audit Approach 6. Accounts Receivable Valuation. Resources for auditing accounts receivable: Subsequent receipts. Credit balance report. Historical reimbursement by payer. Written financial/collection policies and procedures. Accounts receivable ratio. Accounts receivable aging report. Wipfli LLP 18

19 DIY Audit Approach 6. Accounts Receivable Valuation (continued) AR Ratio CY2015 CY2016 April 2017 Benchmark Wipfli LLP 19

20 DIY Audit Approach 6. Accounts Receivable Valuation (continued). April 30, 2017 Actual Data MGMA Benchmark 121+ Days 15% 121+ Days 40% Current 42% Days 6% Days 8% Current 59% Days Days 4% Days 9% 5% Days 12% Current Days Days Days 121+ Days Current Days Days Days 121+ Days Wipfli LLP 20

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22 Conclusion Session takeaways (examples): Wipfli LLP 22

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25 Today s Presenter: Jeff Bramschreiber, CPA Partner, Health Care Practice jbramschreiber@wipfli.com wipfli.com/healthcare Wipfli LLP 25

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