Q: Regarding ARRA payments for hospitals that have demonstrated meaningful use (either Medicare or Medicaid), how are the hospitals that have received these payments recorded them? Are the payments brought into net patient service revenue?
A: The HFMA Principles & Practices Board is working on publishing guidance on the recording of these payments that will be provided to the industry in the next few months. We are working with major accounting firms as well as the accounting standard organizations to determine proper presentation in the financial statements.
It is our understanding that hospitals are handling the recording of these payments in various ways. Some are accounting for these payments under “grant accounting” rules and some are recording them under “patient revenue,” which is why the P&P Board is taking this issue up to provide industry guidance.
In other words, there is not a standard methodology being used yet, but we are getting there soon. We will have detailed guidance about when, what, and how to recognize the revenue shortly.
This question was answered by Todd Nelson, technical director, HFMA ([email protected]).