May 15, 2013

New Mandatory I-9 Form Released

A new, revised Form I-9 was issued March 8, 2013 by the U.S. Citizenship and Immigration Service. The I-9 Form is used to verify that an employee has employment authorization and is eligible to work. The new version of the I-9 Form becomes mandatory May 7, 2013. The new form is designed to minimize errors and is now two pages instead of the previous 1-page form. The main change to the I-9 is that it now only allows documents supporting employment eligibility that are unexpired.

Please follow this link to the U.S. Citizenship and Immigration Service website for the new I-9 Form and instructions.

Failure to use the revised I-9 Form effective May 7, 2013 is subject to enforcement and penalties under federal immigration law.

For further questions, please contact Melanie Dugas at mdugas@ddafcpa.com or Missy DeArk at mdeark@ddafcpa.com.

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May 3, 2013

DDAF Offers Insights on Mining Trends at National Mining Conference

Bill Kohm.  Photo by Bill Straus.  7-20-07.  Copyright 2007Bill Kohm, leader of Dean Dorton Allen Ford’s Natural Resources team, was one of a select group of mining industry financial experts to speak at the prestigious SME Current Trends in Mining Finance Conference last week in New York, at City University of New York Graduate Center.

As recent headlines suggest, now is a challenging time when it comes to mining and finance.  This two-day conference for senior executives and mining industry specialists covered a range of important topics and trends. In addition to Bill’s remarks, the presentations came from representatives from some of the most influential companies in the mining and financial sectors including Citi, Nomura, Societe Generale, Caterpillar, Newmont Mining Corp., E&Y, KPMG, HSBC, Tocqueville Asset Management, BNP Paribas and Revett Minerals. 

The conference focused on three key areas: banking and finance, both traditional and new ideas; accounting and treatment of resource and reserves reporting, and social, environmental and political risks for investors.

Bill’s presentation covered accounting and marketing changes impacting mining companies, including a discussion of impairment and reclamation accounting, and new and proposed accounting standards.  For a copy of the presentation please contact him at bkohm@ddafcpa.com

 

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May 2, 2013

How to be an Effective Nonprofit Board Member

Frick TravisTravis Frick, CPA, Associate Director of Assurance Services and Nonprofit Industry team leader for Dean Dorton Allen Ford, will present at the Center for Nonprofit Excellence “Get on Board” series on May 15.  He will cover the differences between governance and management, and explore the fiduciary responsibilities of board membership.

The series, designed to equip nonprofit board members to serve and lead, will be held on May 8, 15, 22, and 29, from 8:30 a.m. to 12 p.m., at the Fifth Third Conference Center, 323 W. Broadway in Louisville.

Now in its 14th year, “Get on Board” is a powerful learning series that helps local citizens serve and lead dynamic nonprofit boards. Whether you’re interested in serving on your first nonprofit board or are currently serving on one, this informative series will give you the necessary skills and knowledge you need to be successful.  

The cost is $295 for Center for Nonprofit Excellence members; $350 for non-members. For more information, please contact Travis at tfrick@ddafcpa.com or click here to register for the series.

 

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Financial Ratios: Gauging Institutional Health

Colleges and universities often struggle to adequately assess their financial health.  Due to the current economic environment, budgets are being analyzed, revenues are being monitored and costs are being minimized in institutions throughout the country.  Additionally, the amount of volume of available data can be overwhelming and misleading.  

As an institution takes actions to improve its financial health, it’s difficult to be able to measure the success of those actions. 

The struggle is rooted in how financial data are analyzed.  In some instances, financial statements alone are used to gauge the financial health of an institution.  In other instances, mass raw transactional detail is used. Financial statements and raw data are valuable sources of information, but additional tools may be needed to understand how they reflect the current health of an institution. 

One example of an additional tool is use of financial ratios.  Financial ratios can be extremely useful planning and assessment tools. Key ratios can identify trends within the institution and create clearer communication between management and the institution’s board.    Examples of key financial ratios (as identified by various public studies) are described below:

  • Primary Reserve Ratio:  This ratio considers an institution’s resources to ensure that they are sufficient and flexible enough to support the overall strategic mission.  This ratio provides a snapshot of financial strength and flexibility by outlining how long an institution can operate using only its reserves without producing further income generated by day-to-day operations. 
  • Debt Management Ratios:  These ratios include the viability ratio, debt burden ratio, debt service coverage ratio, and interest burden ratio.  These help an institution to determine whether or not the burden of its incurred debt outweighs the benefits received in the advancement of the institution’s mission.
  • Asset Performance and Management Ratios:  These ratios include the return on net assets ratio, physical asset reinvestment ratio, age of facilities ratio, facilities burden ratio and deferred maintenance ratio.  These ratios quantify the value added to the institution by its assets.
  • Operations Ratios:  These ratios include the net operating revenues ratio, cash income ratio, contribution ratios and demand ratios.  These ratios assess whether or not annual operations are benefitting the institution.  Additionally, these ratios provide evidence of whether or not an institution is operating within its means.

Institutions can use these ratios to establish internal expectations and to compare to institutions of similar size, using available benchmarking reports.  The ratios are intended to give a view of the institution’s financial position, while comparing it to the specific goals and strategies of that institution.  It is important to note that these ratios are most useful when applied over a period of time to track trends within the institution.  When performing such financial analysis, institutions should be considering if the results of these ratios are consistent with the overall strategic mission.

Dean Dorton Allen Ford, PLLC, has significant experience and expertise in assisting institutions of higher education analyze their financial health.  We use tools, such as the ratios discussed above, as well as our internal knowledge to provide valuable analysis to institutions of all sizes.  In future newsletters we will discuss more ways colleges and universities can measure and manage their financial health.  If you have any specific questions, please contact us.

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April 25, 2013

Keemer Featured in Business First Construction Roundtable

simonSimon Keemer, CPA, ACA, Director of Assurance Services and construction team leader for Dean Dorton Allen Ford, served as an expert panelist in a recent Business First special section on construction.  Construction industry leaders concerned about access to capital, the impact of healthcare reform, how the Ohio River Bridges Project will affect the construction market, the local labor pool, and other timely issues will want to read this section.

 Dean Dorton Allen Ford provides unmatched knowledge and expertise in construction industry accounting, tax, and business consulting.  The firm’s team of construction advisors offers experience, expertise, and proven leadership to clients seeking to successfully adapt to a continually changing construction environment. Dean Dorton Allen Ford is located in Kentucky with offices in Louisville and Lexington.

 For more information, please contact Simon at skeemer@ddafcpa.com.

 

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PMI Reading Reaches Strongest Quarterly Performance in Two Years

Manufacturing recorded its strongest quarter in two years, according to the Purchasing Manager’s Index (PMI) from Markit Economics. 

The U.S. Manufacturing PMI reading for March 2013, released in April, was 54.6, compared to 54.3 for February 2013 and 54.0 in December 2012.  The PMI reading for the first quarter of 2013 was 54.9 which is the strongest quarterly performance in two years.  A PMI index reading above 50.0 signals an increase or improvement on the prior month, while readings below 50.0 indicate a decrease.  This is good news for manufacturing throughout the United States.  The index has been improving each month of 2013. 

The key factors leading to the expansion of the manufacturing industry in the first quarter of 2013 were output, new orders, new export orders and job creation spurred by increased business activity.  The manufacturing sector in the U.S. has been one of the key drivers in the recovery of the economy with output growing by up to 2 percent in the first quarter compared to fourth quarter of 2012.  Overall this led to approximately 15,000 additional jobs being created.    

One of the more interesting indicators included in the PMI analysis is “suppliers’ delivery times.”  This indicator continues to be the lowest performing indicator and it is continuing to decline, which means that U.S. manufacturers are continuing to see longer required lead times on ordering supplies.  This impacts the expansion of the manufacturing industry as the ability to obtain raw materials can slow output and the ability to fulfill orders on time.

Both large (over 500 employees) and small (less than 100 employees) manufacturing companies posted strong increases in new orders, output and employment during the latest survey period.  For large manufacturers, the rate of growth has eased slightly but for small manufacturers there was a significant rise in production, the strongest for almost three years, which was spurred by new order growth that is the highest in the previous 12 months. 

Overall, this strong indicator is positive for U.S. manufacturers as the country is working through national budget issues, sequestration, the effect of healthcare reform, and the future of the tax code.  One political issue to keep your eye on is the indication that the White House has a renewed interest in expanding trade agreements in Europe and China, which hopefully will lead to increased export orders.  Overall, 2013 is shaping up to be a great year for the manufacturing industry, with many reasons to be optimistic.

PMI is a good report for manufacturers to pay attention to as an economic indicator.  The PMI tracks many variables such as manufacturing output, new orders, stock levels, employment and prices in an effort to determine the current rate of expansion in the manufacturing, construction, retail and service sectors.  The manufacturing PMI is based on monthly surveys of over 600 companies in the United States. It can help your company in understanding the U.S. and global economic environment, which should be considered in strategic planning and growth strategies. Dean Dorton Allen Ford analyzes this index on a monthly basis to ensure we stay current on issues affecting our manufacturing clients.

For more information on the PMI and to review the related underlying data, please visit the Markit Economics website at www.markiteconomics.com.  A Dean Dorton Allen Ford manufacturing industry team member would be happy to discuss its implications for your business.  For more information, please contact Lance Mann at lmann@ddafcpa.com.

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April 22, 2013

Shewmaker Addresses Revenue Cycle Management Process in Modern Healthcare

Adam Shewmaker, FHFMA, associate director of HealthcareShewmaker Adam Consulting Services for Dean Dorton Allen Ford, was interviewed by Modern Healthcare on the revenue cycle management process and how an increasing number of providers are moving part of the process in-house by hiring more billing specialists.  To view the complete article, please click here.  

Dean Dorton Allen Ford provides unmatched knowledge and expertise in healthcare industry accounting, tax, and business consulting.  The firm’s team of healthcare advisors offers experience, expertise, and proven leadership to clients seeking to successfully adapt to a continually changing healthcare environment. Dean Dorton Allen Ford is located in Kentucky, and serves healthcare industry clients throughout the U.S.

For more information on revenue cycle operational assessments and process improvement engagements, please contact Adam at ashewmaker@ddafhealthcare.com.

 

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April 12, 2013

Managing the Compliance Element of Information Technology

If asked to list the core roles for IT, what would the list look like?  Of course, we want IT to ensure systems availability, manage changes to systems, develop recommended plans for improving systems, and align technology initiatives with organizational goals.  For many, this list is incomplete if compliance is not included.  Compliance is a key management function, ensuring adherence to a set of expectations.  These expectations can be internal organizational goals or they can be requirements issued by an external, regulatory entity.

Ensuring IT Compliance is Perceived as a Core Role

 Industries such as finance and banking have had IT compliance requirements for years.   Healthcare is the latest industry to get caught in a wave of regulations related to IT.  In these industries, there are external entities defining the expectations, in the form of regulations, for acceptable policies and procedures.  Because of this, an ongoing compliance mentality is essential.  In other words, IT services personnel at all levels need to understand compliance is an important part of their job responsibilities.  These responsibilities should be incorporated into job descriptions and the performance review process.

Establishing a Compliance Schedule

For those compliance requirements that do not have processes or tools to measure them regularly, there should be at least an annually scheduled compliance measurement event.  This may coincide with a financial audit or other business review.  Financial auditing standards require an understanding of the systems being used to generate financial information or it may be a Sarbanes-Oxley audit.  Other examples include the deadlines established for HIPAA requirements that have been spotlighted by the new Meaningful Use criteria.  The more heavily regulated industries will have multiple scheduled events, which tend to have a great deal of overlap in what is being measured for compliance. 

Outlining Responsibility for the Compliance Measurement Process

Assigning responsibility begins with understanding the regulations, then identifying who has the skills to measure compliance, carving out the resources necessary, developing a testing program, testing compliance status, and getting management support so remediation steps will be given priority.  The three common solutions for devoting resources to these tasks are utilizing IT personnel, internal audit personnel, or third-party consultants.

Utilizing the Third Party Consultant Option

When considering all the constraints involved in the compliance measurement process, the number one constraint is often allocation of time.  Having an in-depth understanding of regulation requirements and developing a testing program are not minor considerations.  That is why utilizing a third-party consultant can be an appealing option.  Dean Dorton Allen Ford’s Technology Consulting group is a resource you can use to help meet the additional demands put on your organization by compliance requirements.  For more information on IT compliance requirements at your organization, please contact Kevin W. Cornwell, Manager of Technology Consulting, at kcornwell@ddaftech.com or (502) 566-1011.

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April 2, 2013

10 Ways to Generate Additional Cash

In this era of healthcare reform with its deteriorating payer mix and increased pressures on bottom lines, healthcare providers are looking to stabilize and/or improve its margins in any way possible.  Here are 10 ways the healthcare team at Dean Dorton Allen Ford recommends as potential avenues to generate additional cash:

  1. Increase the focus on point of service collections – Identify, communicate, and collect.  Implement the right processes and tools so that your front-end staff can collect more dollars at the time of service.  Make it part of the job description and set the expectation that patients pay at the time of service.  It is critical to provide the appropriate level of training and scripting for front-end staff.  Other areas to consider include payment estimator software, an integrated eligibility verification process and multiple payment options, including online portals.
  2. Underpayment recovery – Is your organization getting reimbursed timely and accurately based on the terms of your contract?  Some estimates show that as much as 3% of net revenue is left on the table due to receiving less than the expected reimbursement.  Organizations should have a coherent approach to identify these claims and compare actual reimbursement to the expected rate.
  3. Discharged Not Final Billed (DNFB) – DDAF recommends that no more than six (6) days of average daily revenue be sitting in DNFB at any given time.  If total A/R in DNFB exceeds six days of revenue, then there may be process or staffing issues that need to be addressed.  Too many dollars in DNFB may result in delayed payment or timely filing write-offs.
  4. Denial Recovery – Third party payer denials must be tracked and resolved on a daily basis.  Hospitals should dedicate its most skilled resources to prevent, appeal, and resolve denied claims.  This team should be well coordinated and include representatives from Finance, Managed care, Patient access, Case management, Health Information Management, and Patient Financial Services.
  5. Cash Acceleration – Priority accounts must receive proactive, aggressive follow-up.  Design your collector work queues to include those accounts that have the most significant impact on cash and Accounts Receivable.  Remember, 80% of your billed Accounts Receivable can be managed thru just 20% of your account volume.  Most providers just don’t have the luxury of giving the same amount of effort to every account.  It may be appropriate to outsource some portions of the billed receivable, such as small dollars or aged A/R.
  6. Secondary scrub of Medicaid days for Disproportionate Share (DSH) – With the right technology and methodology, hospitals can identify between 2% and 5% in additional Medicaid-eligible days.  These days can be added thru a re-opening of an already settled cost report and provide significant additional revenue.  There may also be Medicaid billing opportunities if eligibility is identified for patients who were previously classified as self-pay or charity.
  7. Charge Description Master (CDM) review and strategic pricing – A review of the CDM can identify missed revenue opportunities and/or compliance risks.  Strategic pricing can also lead to potential gains in net revenue.
  8. SSI member management – Proactively managing a hospital’s SSI ratio on a prospective basis can have a significant positive impact on additional DSH reimbursement.  It is important to identify patients who are likely SSI eligible to maximize reimbursement.
  9. Coding and charge audit – It is advantageous for providers to undergo a review of its documentation as it relates to coding and charge capture.  This type of analysis can reveal missing and/or incomplete documentation and potential compliance risks missed revenue.
  10. Bad debt analysis – Take a look at the types of accounts and balances that are being transferred to bad debt each month.  Review a 12-month history to determine the various patient types, frequent flier patients, and traditional co-pay/deductible amounts that are going uncollected and being transferred to bad debt.  There may be some trends that can lead to process improvement opportunities to collect more of those dollars. 
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March 27, 2013

Receive a Free Copy of Our New Hospital-Owned Physician Group Study

Dean Dorton Allen Ford has just released a study examining challenges Kentucky hospitals face in integrating physician practices.  The report,integration

In-te-gra-tion: The Challenge of Integrating Physician Group Operations

is based on a survey of healthcare executives representing 79 hospitals in or near Kentucky. 

In conducting the survey, analyzing the data, and summarizing some of the key findings in this report, we’ve concluded that integration of physician group operations may be the number one challenge for hospitals today.  For the vast majority there are hurdles yet to overcome to achieve financially sustainable integration and attain its advantages. 

One key statistic from the study, that many hospitals report losses of $100,000 or more per physician each year, illustrates the need for improved integration.  Many hospitals currently benefit from the tradeoff of additional revenue streams to the hospital for losses on employed physicians, but as compensation criteria change that tradeoff becomes less acceptable, while the risks of disconnected, non-integrated practices become even greater.

Request a copy of the report by emailing integration@ddafhealthcare.com.  If you are interested in an analysis comparing your organization to the survey results, please contact Gary Ermers at gmermers@ddafcpa.com

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