What fiscal year calendar do hospitals tend to follow (e.g., January-December)? What are the benefits and hassles associated with various fiscal-year ends?
Answer 1: Most facilities I have worked at report on a calendar year basis. Hospitals that have different fiscal years are facilities that are state- or city-sponsored.
This answer was provided by: Caswell Samms, III, network CFO, Lincoln Medical Center and Harlem Hospital, NYC Public Health System, and a member of HFMA’s Metropolitan New York Chapter.
Answer 2: I don’t know any hospitals that do not use the calendar year. Many years ago, I worked for a hospital that used April 30 as its fiscal year end. But the hospital switched back to calendar-year after about four years.
This answer was provided by: Brenda Loper, director of patient registration services, Sentara Healthcare, Norfolk, Va., and a member of HFMA’s Virginia-Washington D.C. Chapter.
Answer 3: I agree that most state, local government, or hospital-district hospitals traditionally have a June or September year-end. Most not-for-profit or for-profit hospitals have calendar years. Certain types of hospitals may have elected different year-ends to take advantage of reimbursement changes or for other business reasons related to change of ownership.
This answer was provided by: David A. Williams, FHFMA, CPA, partner, Horne LLP, Jackson, Miss., and a member of HFMA’s Mississippi Chapter.
Answer 4: I agree with all the observations made. As to pros and cons, the only downside I have seen in organizations with calendar-year fiscal years is that the end-of-year nuttiness associated with fiscal years just adds to the stress already associated with December and the holidays in that month. June ends are much calmer by comparison.
This answer was provided by: Marty Knutson, health lawyer with a private law practice, San Diego.
Answer 5: In Massachusetts, the majority of acute care hospitals are not-for-profit and nearly all of them have a Sept. 30 fiscal-year end. Hospitals that I have worked at in Rhode Island were not-for-profit and also had Sept. 30 fiscal years.
It is hard to find an ideal time to end the fiscal year from the perspective of the financial staff. A June 30 year means you are spending the summer doing the work for the audit, with many key people taking vacation time, and with the Medicare cost report being due right after Thanksgiving.
A Sept. 30 year pushes the audit work into the holidays and means meetings with the finance committee and board in December.
And a Dec. 31 year means that you have to make sure you complete all of the year-end deadline work in the last two weeks of December, when many people are taking time off.
This answer was provided by: Robert J. Ellertsen, FHFMA, interim vice president finance/CFO, Cambridge Health Alliance Physicians Organization, Waban, Mass., and a member of HFMA’s Massachusetts-Rhode Island Chapter.
Answer 6: For what it’s worth, my former employer had a March 31 fiscal-year end. It seemed to mitigate some of the previously mentioned problems.
This answer was provided by: David Hammer, FHFMA, CHFP, principal at Healthcare Performance Management Consultants, Atlanta, and a member of HFMA’s Florida Chapter.
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