Month End/Year End AR Valuation for Financial Statement Purposes

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You'll Learn:

• The Theory behind AR valuation
• Impact on Balance Sheet and Income Statement
• Review of different methodologies around Contractual Adjustments – Payment vs. Billing
• Examples of detailed AR valuation calculations
• Sample Checklist of Tips, Tricks and Pitfalls to be considered during your evaluation of AR

Webcast Summary

Chief financial officers and other healthcare finance leaders are at risk of losing their credibility with their Board, Chief Executive Office, other senior leadership, and outside rating agencies and/or investors for over or understating their Accounts Receivable value on month and year end balance sheets. Net Accounts Receivable can be one of the larger numbers on the Current Assets side of the Balance Sheet and is based on many variables in estimating its true value.

As financial leaders it is imperative that each organization understand their variables to help in estimating month-end/year-end net realizable value of your Accounts Receivable. By developing standard processes, check lists and a critical eye on an ongoing basis will ensure that month-end/year-end calculations are the most accurate valuation possible. 

Key Areas Covered:

• The Theory behind Accounts Receivables valuation:
  • Ensure that the Net AR amount on Balance Sheet “accurately” reflects the anticipated cash value
  • Theories to consider in your evaluation of AR and Net Patient Service Revenues
  • Theories to consider in your evaluation of Bad Debts
• Impact on Balance Sheet and Income Statement:
  • Identify the corresponding impact for potential missed estimates
  • Lost Cash Opportunities from unrecorded revenue, late charges, timely filed billing and payor denials
  • Over and Understating - Contractual Reserves and Provision for Bad Debts
• Review of different methodologies around Contractual Adjustments-Payment vs. Billing:
  • Pros – Cons of Adjusting Third Party Accounts at time of Payment vs. Billing
  • Impact on Contractual Reserves for Adjusting Individual Accounts at time of Payment vs. Billing
• Examples of detailed AR valuations calculations
• Sample Checklist of Tips, Tricks and Pitfalls to be considered during your evaluation of AR

Intended Audience:

Level:

Speakers:

Mike Monahan, FHFMA  
Metro NY/NJ Market VP
Perot Systems

Larry Todd
Revenue Cycle Project Executive 
Perot Systems 

Subject Category:

Financial management/revenue cycle