Chicago, IL - January 4, 2012 - The Healthcare Financial Management Association (HFMA), through its Principles & Practices Board, today published an issue analysis to provide clarity on accounting for the Health Information Technology for Economic and Clinical Health (HITECH) Act's incentive payments. Guidance on the accounting and reporting issues raised by the Medicare incentive payments for the meaningful use of electronic health record (EHR) technology has been much anticipated by the healthcare industry.
The Principles & Practices Board states that short-term acute care hospitals receiving the Medicare incentives for meaningful use of EHRs are using either a contingency model or IAS 20 grant accounting model. Securities and Exchange Commission (SEC) registrant hospitals have been applying the contingency model, while not-for-profit, private, and government hospitals are choosing between the two accounting models.
Healthcare providers using the contingency model should consider and document all contingencies and support and monitor additional accounting and reporting developments, the Principles and Practices Board recommended.
The IAS 20 model, widely used by companies who receive government resources in return for compliance with specified conditions, is being used by hospitals with respect to EHR incentive payments. In addition to IAS 20's general requirements, hospitals that receive incentive payments need to consider additional financial reporting requirements based on whether the hospital is a privately-held investor-owned entity, a not-for-profit entity, or a governmental entity, the Principles & Practices Board said. The issue analysis prepared by the Principles & Practices Board also includes a detailed example of the grant accounting model.
Hospitals and physicians are eligible for $19 billion in incentive payments by meeting EHR "meaningful use" criteria outlined by the Centers for Medicare & Medicaid Services.
For a complete record of HFMA's Principles and Practices Board analysis, please visit www.hfma.org/EHRpayments.
The Healthcare Financial Management Association (HFMA) provides the resources healthcare organizations need to achieve sound fiscal health in order to provide excellent patient care. With more than 37,000 members, HFMA is the nation's leading membership organization of healthcare finance executives and leaders. HFMA helps its members achieve results by providing education, analysis, and guidance, and creating practical tools and solutions that optimize financial management. The organization is a respected and innovative thought leader on top trends and challenges facing the healthcare finance industry. From addressing capital access to improved patient care to technology advancement, HFMA is an indispensable resource on healthcare finance issues.
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