Term
| Accelerated Method of Depreciation |
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Definition
| A depreciation method that allows for larger amounts of depreciation in early years and smaller amounts in later years. The double declining-balance method is an example. (This enables the owner to receive tax and/or reimbursement benefits more quickly than using the straight line method). |
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Term
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Definition
| The process of identifying, recording, and communicating information about the financial position and results of operations of a business entity, using principles designed to facilitiate informed decision-making by the entity's managers as well as by external groups. |
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Term
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Definition
| Assets = Liabilities + Owners' Equity (capital). This equation states that the assets of a firm are equal to the claims of the creditors plus the claims of the owners. The balance sheet is a detailed statement of this equation. |
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Term
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Definition
| Amounts owed to suppliers for goods and services. |
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Term
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Definition
| Amounts owed to the facility for services or for the sale of goods. |
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Term
| Accrual Basis of Accounting |
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Definition
| A system of accounting in which revenues are recorded in the period earned, and expenses are recorded in the period incurred even if cash is received or paid in a later or earlier time period. (Contrast with CASH BASIS of accounting) |
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Term
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Definition
| The total depreciation from the start of the life of a plant asset to any point in time. On the balance sheet, there is a deduction for accumulated depreciation taken from the gross evaluation of depreciable plant and equipment to yield a net evaluation. |
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Term
| Acid-Test Ratio (or Quick Ratio) |
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Definition
| Cash and other current assets that can be converted to cash right away (such as marketable securities and current receivables) divided by current liabilities. A measure of the ability of a firm to pay its current liabilities in the very short term (see also CURRENT RATIO). |
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Term
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Definition
| Entries made at the end of an accounting period to record certain transactions or other accounting events that have not been recorded or have been improperly recorded during the accounting period. Examples include entries for depreciation expense and unused portions of prepaid expenses. |
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Term
| Administrative Information System |
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Definition
| Information technology that is designed to assist in carrying out financial and administrative support activities such as payroll, patient accounting, billing, accounts receivable, materials management, budgeting, cost control and office automation. |
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Term
| Aging of Accounts Receivable |
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Definition
| Summarizing unpaid balances in terms of age groups, such as: currently due, 1-30 days past due, 31-60 days past due each of the remaining 30-day periods through 151-180 days past due, and finally past due more than 180 days. This classification may be broken down by type of debtor. Aging receivables is a step in the collections effort, in reporting on the balance sheet a deduction from accounts receivable for estimated bad debt, and in making write-off decisions. |
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Term
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Definition
| Also called an "aging report," it shows the length of time that various amounts within each patient's account have been outstanding (not paid). |
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Term
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Definition
| The maximum fee that a third party will use in reimbursing or paying a provider for a service rendered. |
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Term
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Definition
| Costs that are reimburseable under a third-party payment formula. |
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Term
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Definition
| The periodic reduction of a debt by regular payments applied to both principal and interest over a scheduled period. |
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Term
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Definition
| Extra charges for supplies and services, e.g., drugs and lab tests, that are not included in the per diem rate. |
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Term
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Definition
| The Medicare and Medicaid Anti-Kickback Law penalizes anyone who knowingly and willfully solicits, receives, offers, or pays a remunerationin cash or in kind to induce, or in return for: A. Referring and individual to a person for the furnishing, or arranging of the furnishing, of an item or service to be paid for by the Medicare or Medicaid program; or B. Arranging or recommending the purchase, lease, or order of goods or services to be paid for under Medicare or Medicaid. Violators are subject to criminal penalties or exclusion from participation in the Medicare and Medicaid programs, or both (see also SAFE HARBORS). |
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Term
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Definition
| Resources owned by a business that are measured in monetary terms. On a balance sheet, assets are generally classified into current and noncurrent portions. Current Assets are cash, accounts receivable, supply inventories, and prepaid expenses. Noncurrent assets include Property, Plant & Equipment (PP&E)(also referred to as fixed assets, capital assets, or plant assets) which are assets having an estimated life in excess of one year and not intended for sale in the ordinary course of operations. |
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Term
| Assisted Living Facility (ALF) |
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Definition
| Term applied to broad array of residential optionsfor frail senior who need assistance with one or more activities of daily living, such as dressing or bathing, but do not require continuous skilled nursing care. ALF's generally emphasize a homelike environment offering a maximum amount of independence, privacy, and choice. |
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Term
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Definition
| Examination of accounting systems, controls, and records to ascertain their conformity to legal and professional standards and their adequacy in protecting against loss of assets by fraud and waste. |
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Term
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Definition
| The average number of patients per day over a specified period of time such as a week, a month, or a year. |
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Term
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Definition
| People born between 1946 and 1964. This age group constitutes approximately 70 million Americans who will start retiring around 2010. By 2030, when all the Baby Boomers will have retired, experts predict that they will severely strain the nation's health care system. |
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Term
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Definition
| An account receivable determined to be uncollectible. |
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Term
| Balance Sheet (or Statement of Financial Position) |
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Definition
| A report summarizing a firm's assets, liabilities, and owners' equity at a specific date. |
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Term
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Definition
| Statement sent by a bank to a bank account holder showing beginning and ending balances, and all transactions in the account for a month. |
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Term
| Bank Statement Reconciliation |
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Definition
| Process of explaining and correcing any discrepancies between a bank statement balance and the depositor's record of the cash balance. |
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Term
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Definition
| Period of consecutive days during which covered services furnished to a patient, up to certain specified maximum amounts, may be paid for by an insurance plan. Each insurance carrier has its own definition of benefit period. |
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Term
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Definition
| The process of requesting from vendors a response (bid or offer) to provide goods or services according to written specifications. The bidding may be closed (directed to select bidders) or open (to all bidders). The bids may be negotiated (as to price, payment terms, etc.) before a contract is finalized. |
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Term
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Definition
| Interest-bearing notes, usually in $1,000 or $5,000 amounts, in which the issuer (borrower) promises to repay the bondholder (lender) the principal and interest of a loan according to a schedule. |
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Term
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Definition
| The clerical process of recording the financial transactions of an organization. |
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Term
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Definition
| The point at which total revenues for a firm or a program are equal to the total expenses incurred. This may be illustrated on a graph where revenues (and expenses) are plotted on the vertical axis while resident-days are plotted on the horizontal axis. Look for the point where the line representing total cost (fixed plus variable) intersects with the line representing total revenue. The number of resident-days indicated by the point on the horizontal axis directly below this intersection is the number of resident days needed for the firm or program to break even, i.e., neither incure any loss nor make any profit. |
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Term
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Definition
| A tool for exercising financial control. It sets expectations that become financial objectives that the administrator is responsible for achieving. "Budgeting" is the process of financial planning. |
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Term
| Case-Mix-Based Payment Systems |
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Definition
| Payment systems used by Medicare and many state Medicaid programs under which the per diem rates for each nursing facility are determined in part by some measure of the acuity, and thus the likely resource consumption, of each covered resident in the facility. Assessments are conducted to classify covered residents into defined groups based primarily on functional disability scores, but certain diagnoses, service needs and behavioral problems may also be considered. The per diem rate is different for each group, with higher rates paid for residents needing and receiving more services. |
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Term
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Definition
| A system of accounting in which revenues are recorded when cash is received, and expenses are recorded when cash is paid (contrast with accrual basis of accounting). |
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Term
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Definition
| Cash inflows from collections of revenues and other sources minus cash outflows for payments of expenses and liabilities. A cash budget of cash-flow forecast projects these amounts, whereas a cash flow report shows actual experience. |
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Term
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Definition
| Number of patients in a facility on a given day. |
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Term
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Definition
| Care provided to a patient who does not have the capacity to pay. |
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Term
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Definition
| A list of names and numbers of all the accounts used in a business. There typically are accounts for various subcategories of each of the following: assets, liabilities, owner's equity, revenues, and expenses. |
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Term
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Definition
| Body of laws governing private legal affairs, such as private rights and duties, contracts, and commercial relations. |
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Term
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Definition
| The three primary sources in health care malpractice lawsuits are: (1) failure to obtain consent before intervening in the life of the resident; (2) breach or violation of a contract or promise; and (3) the rendering of substandard, poor-quality care. |
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Term
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Definition
| A bill submitted to the fiscal intermediary claiming payment for services provided. |
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Term
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Definition
| Number of days' worth of revenue that is accounts receivable. |
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Term
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Definition
| The difference between the rate the facility normally charges for services to its self-pay residents, and the lower rate that the facility has agreed to receive as reimbursement from Medicare, Medicaid, or other third-party payers. For external reporting purposes, revenues are recorded as the amount to be actually collected. However, for internal reporting purposes, management may record such contractual discounts as deductions from operating revenues on the income statement and accounts receivable on the balance sheet so that the amount of discounts given to each payer class is known. |
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Term
| Controller (or Comptroller) |
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Definition
| The chief accountant of a firm. |
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Term
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Definition
| An organizational unit charged with responsibility for controlling its own costs, and so its costs (for salaries, supplies, etc.) are separately accumulated in the accounts. A cost center may or may not be a revenue center, i.e., a unit providing direct services to patients for which they are charged. |
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Term
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Definition
| Practice by health care providers of charging private-pay patients more than the actual costs of their care, in order to compensate for shortfalls in payments for patients covered by Medicaid and other government programs which may pay less than actual costs. |
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Term
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Definition
| Current assets divided by current liabilities. A measure of a firm's ability to pay current debts. A current ratio much below 1.00 (or 1:1) may indicate problems in meeting current liabilities as they become due. (see also ACID-TEST RATIO). |
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Term
| Days in Resident Accounts Receivable |
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Definition
| The number of days during which expenses could be paid using the cash on hand. It is: Cash + Marketable Securities (Total operating expenses minus depreciation)/365 |
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Term
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Definition
| Also called "Patient Days." Cumulative census over a specified period of time. |
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Term
| Debt Service Coverage Ratio |
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Definition
| Projected annual cash flow (i.e., excess of cash receipts over cash expenses), divided by required annual debt payments. Measure used by potential lenders of the credit-worthiness of an entity. |
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Term
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Definition
| A measure of the relative obligations of a facility. Generally, the lower the debt ratio, the more financially sound the facility is believed to be. The ratio is calculated by: (Current Liabilities + Noncurrent Liabilities) / Total Assets |
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Term
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Definition
| Medicare rule that a hospital accredited by the Joint Commission on Accreditation of Healthcare Organizations is deemed to have met the Medicare certification criteria. |
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Term
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Definition
| The systematic allocation of the cost of a fixed asset to expense over its useful life. |
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Term
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Definition
| A competitive strategy in which a facility creates distinctive features that allow customers to distinguish the facility's offer from that of its competitors. |
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Term
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Definition
| A distribution of earnings to shareholders of a corporation. |
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Term
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Definition
| The system of recording transactions that requires each transaction to be recorded at least twice: as an addition or subtraction to one account (and that is called a debit) , and as an addition or subtraction to at least one other account (and that is called a credit). This system provides a logical way to record much information. At the end of a period, after all adjusting entries are made, the sum of the debits should equal the sum of the credits. When a trial balance indicates that these two totals are equal, the "books balance" and financial statements can be prepared. Failure to find this equality is an indicator that one or more recording errors were made. |
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Term
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Definition
| Increases in asset accounts and expense accounts are recorded as debits; decreases are credits. Increases in liability, revenue, and owners' equity accounts are credits, decreases are credits. |
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Term
| Durable Power of Attorney |
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Definition
| Appointment of an agent who is empowered to act on behalf of the person creating the power in the case of future incompetence. (Ordinary POA ends when the person creating the power becomes incompetent). |
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Term
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Definition
| Earnings before interest, taxes, depreciation, amortization, and rent. This shows cash flow available to pay interest, rent and taxes after paying operational costs. It is a measure used by potential lenders of the credit-worthiness of an entity. |
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Term
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Definition
| In a long-term care insurance plan, the initial waiting period during which LTC services are used but not covered by insurance. |
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Term
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Definition
| The excess of a firm's assets over its liabilities equals the owner's equity (in a for-profit corporation). |
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Term
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Definition
| Federal law that provide for civil or criminal penalties for individuals and entities for submitting a false claim, or causing a false claim to be submitted, to a federal health care program. False or fraudulent claims include claims for items not provided or not provided as claimed, claims for services that are not medically necessary, and claims when there has been a failure of care. Many states have a parallel law that applies to the state Medicaid and other state health care programs. |
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Term
| First In, First Out (FIFO) |
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Definition
| 1. Inventory usage ideal of using the oldest supplies first (as long as the use-by or expiration date has not been reached). To facilitate this, new supplies are shelved based on the use-by or expiration date, so that the oldest products are stored in front of, or otherwise made more accessible than, more recently acquired products. 2. Inventory costing method for balance sheet purposes that assumes that the first goods purchased (first-in) are the first goods used (first-out), so the ending inventory should be valued at the cost of the most recent goods purchased. The Last In, Last Out method assumes the opposite , and values ending inventory at the cost of the earliest goods purchased. |
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Term
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Definition
| Costs that do not vary with the number of patients. These costs are not controllable. |
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Term
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Definition
| An adjusted budget in which the budgeted costs are raised or lowered to reflect the actual census. |
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Term
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Definition
| Deliberate deceit by providers or consumers in obtaining payment for services that were not actually delivered or received, or in claiming program eligibility. To be distinquished from abuse, which refers to improper or excessive use of program benefits, resources, or services by either providers or consumers. Abuse is not necessarily intentional or illegal. |
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Term
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Definition
| The setting aside of a portion of retained earnings (equal to a depreciation expense) in a separate account designated to be used only for the purchase of replacement capital assets. |
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Term
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Definition
| Financial record, consisting of a collection of accounts, that summarizes all the entries in each of the journals for an accounting period, for the purpose of keeping a continuous record of account balances and arriving at a trial balance. |
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Term
| Generally Accepted Accounting Principles (GAAP) |
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Definition
| The policies, standards, and rules followed by accountants in the preparation of financial statements and in recording and summarizing transactions. |
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Term
| Health Maintenance Organization (HMO) |
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Definition
| An organization that has management responsibility for providing comprehensive health care services on a prepayment basis to voluntarily enrolled persons within a designated population. |
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Term
| Historical Cost (or Acquisition Cost) |
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Definition
| Cost of acquiring a depreciable asset, which includes not only the purchase price but also the cost of taxes, shipping, assembly and installation. |
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Term
| Home- and Community-Based Services (HCBS) Waiver |
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Definition
| Enacted under Section 1915(c) of the Social Security Act, the program allows states to offer LTC services that are not otherwise available through the Medicaid program. The latter had authorized payments for institutional care only. |
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Term
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Definition
| An increase in owner's equity resulting from services rendered or goods provided. |
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Term
| Income Statement (or Statement of Revenue and Expenses) |
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Definition
| A report which lists in summary form revenues and expenses for a certain time period, such as a month or a year. A profit results from an excess of revenues over expenses for the period, and a loss occurs when expenses exceed revenues. So the income statement also shows profit or loss, and is therefore also called the profit-and-loss (or P-and-L) statement. |
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Term
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Definition
| Category of persons providing services who are not considered by the IRS as employees. Therefore, employers generally do not have to withhold federal income tax or FICA taxes on payments to independent contractors. The IRS offers 20 guidelines for determining whether an individual falls into this category. The general rule is that independent contractors "follow independent trade, business or profession in which they offer their services to the general public," and those who pay for their services "have the right to control or direct only the result of the work and not the means and methods of accomplishing the result." However, employers who pay an independent contractor $600 or more during a year must issue and file a Form 1099-MISC. |
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Term
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Definition
| An item or right that has no physical substance and provides an economic benefit. The reputation of a nursing facility as the best caregiver in the community is a valuable intangible asset, for example. |
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Term
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Definition
| The goods and materials on hand which are to be used in producing services or held for resale. |
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Term
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Definition
| Document prepared by a seller for a buyer that describes goods sold or services rendered and the terms for payment. |
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Term
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Definition
| Book of original entry, the first place in which transactions are formally recorded. Entries are in chronological order. A separate journal is generally maintained for the following categories of transactions: cash receipts, cash payments, billings, accounts payable, and payroll. A General Journal is used for entries that to not properly belong in any of the other journal s, and for adjusting entries. Adjusting entries include entries entries for depreciation, prepaid expenses, and inventory usage. |
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Term
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Definition
| Congressional legislation that made federal funds available to states for health care for the needy. |
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Term
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Definition
| A portion of a fee, salary, or other payment that is given to a third party for having assisted--or refrained from preventing--the payment in the first place. Most types of kickbacks are unethical or illegal. |
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Term
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Definition
| A contract requiring the lessee (user) to make periodic payments (rentals) for a specified period of time to the lessor (owner) for the use of an asset. Operating leases are generally for a short term or limited number of years. A capital lease is a long-term lease agreement extending generally for the entire life of equipment or property leased. Operating lease expenses are listed on the income statement. Capital leases should be reported as assets and as long-term liabilities on the balance sheet. The asset (capital lease) is amortized for depreciated based on its useful life. |
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Term
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Definition
| Debts owed by a firm to a persons or firms other than its owners. On a balance sheet, liabilities are classified as current if they are due within one year from the balance sheet date, and long-term (or non-current) if they are due more than one year from the balance sheet date. |
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Term
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Definition
| Form of financing in which a financial institution commits itself to make a loan to a company up to a specified maximum amount. The company may choose to use its line of credit, subject to the terms of credit, when and if the need arises. |
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Term
| List of Excluded Individuals/ Entities |
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Definition
| Online database maintained by the OIG (at www.hhs.gov/oig) providing information regarding over 15,000 individuals and entities that are excluded from participation in Medicare, Medicaid and other federal health care programs. Certified facilities should check (and periodically recheck) this list and must refrain from contracting with or otherwise doing business with anyone on it in the course of providing items or services for which payment may be made under a federal health care program. Providers are advised to check also the General Services Administration (GSA) monthly "List of Parties Excluded From Federal Procurement and Nonprocurement Programs" at http://epls.arnet.gov. |
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Term
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Definition
| The maximum loan amount based on a percentage of the borrowing facility's appraised value. |
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Term
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Definition
| An asset with future economic benefits that are expected for a number of years. Long-term assets are reported on the balance sheet as noncurrent assets and include buildings and equipment. A new central building for a life care community may have a long-term expected asset value for perhaps 40 or more years to come. |
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Term
| Managed Care Organization (MCO) |
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Definition
| Entity that integrates the financing and delivery of health care to covered individuals by means of arrangements with a limited number of selected providers. It provides financial incentives for membership, quality assurance programs, and formal utilization management programs (i.e., processes to evaluate the necessity, appropriateness, and efficacy of health care services). (see also Medicaid MCO). |
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Term
| Medicaid Managed Care Organization (MCO) |
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Definition
| Entity that has entered into a risk contract with a state Medicaid agency to provide a specified package of benefits to Medicaid enrollees in exchange for a monthly capitation payment on behalf of each enrollee. These plans may include or carve out acute care services. Some MCOs coordinate Medicare and Medicaid services for dually eligible beneficiaries. Such arrangements may include a capitated amount for both Medicare and Medicaid services or only Medicaid with an additional fee paid to the MCO to coordinate Medicare services that are not part of the plan. |
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Term
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Definition
| A written promise giving a creditor an interest in the debtor's property as security (collateral) for a debt. |
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Term
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Definition
| In corporate finance, the present value (i.e., the value of cash to be received in the future expressed in current dollars) of an investment in excess of the initial amount invested. When a proposed project, such as building a new wing has a positive net present value, it should perhaps proceed; when a proposed wing shows a negative net present value, it should perhaps be delayed or abandoned. |
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Term
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Definition
| A written promise to pay a specific sum with or without interest at a fixed future date. |
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Term
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Definition
| The ratio of actual number of resident days to the total possible resident days, usually expressed as a percentage. Alternatively, the ratio of occupied beds to available licensed beds. For example, if a facility has 100 beds and 80 are occupied for a day, the occupancy rate is 80/100 or 80%. This may be reported as the average of the daily occupancy rates for a period , such as 30 days or a year. A particular resident's bed may be considered an occupied bed in calculating this rate even though that resident is in the hospital or temporarily discharged for some other reason, if the facility is receiving a "bed-hold" or "bed-reserve" rate and/or is reserving the bed for that resident. |
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Term
| Office of Inspector General (OIG) |
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Definition
| Office in the US Department of Health and Human Services charged with identifying and eliminating fraud, abuse and waste in the Medicare, Medicaid, and othe DHHS programs. The OIG carries out this mission through a nationwide program of audits, inspections, and investigations, and through issuance of Special Fraud Alerts. |
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Term
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Definition
| Total profit (or loss) as a percent of total revenue. |
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Term
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Definition
| The value of the benefits sacrificed when money or other asset is used one way rather than in an alternative way. It is the net benefits that might have been obtained had the money been spent on the next best use. For example, if $1,000 is spent for activity program supplies, the opportunity cost of NOT having the benefits of $1,000 worth of food or landscaping services, or of not earning the interest had the money simply been left in the bank. |
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Term
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Definition
| A simple device for comparing investment proposals. It is the time in years for the net cash inflow from a capital investment to be equal to its cost, that is for the item to "pay for itself." It is criticized for failure to consider the time value of money, expected net cash flows after the payback period, and some key benefits from use of an item. If the estimated net cash receipts are the same amount each year, the payback period is calculated by dividing the total investment by the expected annual savings or increase in net cash inflow. Depreciation does not affect cash flow, so it is ignored. EXAMPLE: A machine is purchased for $30,000 to replace a worker earning $20,000 per year. Payback period = Total Investment Annual savings or increased net cash flow = $30,000 $20,000 = 1.5 years |
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Term
| Pledging of Accounts Receivable |
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Definition
| Use of receivables as security or collateral for a loan. When this is done "with recourse," the borower remains responsible for collecting the receivables but promises to use the proceeds for repaying the debt. In contrast, factoring of receivables is the sale of receivables as a means of short-term financing. When this is done "without recourse," the seller transfers not only the receivables but also the risk of default. |
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Term
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Definition
| A step the accounting process when journal entries are transferred (posted) to accounts in the general ledger in order to summarize information such as cash on hand. |
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Term
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Definition
| Expenses paid in advance for several months, e.g., building rental payments, journal subscriptions, insurance premiums. These expenses are allocated to the months by adjusting entries. |
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Term
| Prospective Payment System (PPS) |
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Definition
| A payment system developed for Medicare for skilled nursing facilities that pays facilities an all-inclusive rate for all Medicare Part A beneficiary services. Payment is determined by a case mix classification system (RUGs). |
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Term
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Definition
| Practice by Medicare and most state Medicaid programs of using predetermined rates to reimburse nursing facilities without adjusting payment to cover actual costs. The states use a wide variety of methodologies to develop these rates. If the provider can keep costs below the formula determined rate, a profit can be made. If the provider's costs exceed the rate, a loss is incurred. |
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Term
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Definition
| Document from a prospective purchaser requesting a seller to provide certain quantities of described goods or services at a given price, with payment to be made later. |
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Term
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Definition
| Funds set aside to meet some future obligation. |
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Term
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Definition
| Funds established to account for assets with uses limited by the requirements of donors or grantees. For example, a fund may be restricted to plant replacement. If the donor has specified that the principal must be maintained perpetually, and only the investment income it generates may be expended, the principal is accounted for as an endowment fund. |
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Term
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Definition
| (or earned surplus, undistributed profits): The income left to a company after taxes and dividends have been paid and that are a major source of funds for the company's expansion. |
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Term
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Definition
| A means of assessing a company's profitability. It is calculated by dividing the firm's annual net income by total shareholder's equity. |
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Term
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Definition
| Income earned from carrying out the activities of a firm. Revenues of health care institutions are typically reported in terms of these three components: a. Patient service revenues may be divided into the "room, board, and general nursing services" covered by rates billed to all patients; and ancillary services, such as physical therapy or pharmacy, which are billed to only some patients. Patient service revenues accounts may also be segregated by level of care (skilled, intermediate) or by payer status (self-pay, Medicare, Medicaid, commercial insurance). b. Other operating revenuesare revenues earned incidental to the main purpose of rendering patient care, such as revenues from teh employee cafeteria, beauty shop, and other concessions. c. Non-operating revenues may include separate line items for interest and other investment income, unrestricted gift income or gains (or losses) on sales of property. |
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Term
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Definition
| A form of upcoding under the Medicare prospective Payment System for SNFs which occurs when the SNF falsely or fraudulently completes the MDS, and this results in incorrect assignment of a resident to a higher-paying RUG category. |
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Term
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Definition
| Federal regulations that define practices that, if fully followed, will not be considered violations of the federal anti-kickback. There are regulations, for example, that describe conditions under which discounts may be received from equipment suppliers, and conditions under which payments may be made to operators of referral services. |
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Term
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Definition
| An alternative to purchased insurance. An entity assumes its own expenses relative to a specific risk of loss by periodically setting aside an actuarially determined amount of money, which may be held by a trustee. |
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Term
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Definition
| Statements issued by the Office of Inspector General (OIG) to the general health care community addressing national trends of health care fraud and providing guidance relative to violations of the anti-kickback statute and other federal laws. |
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Term
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Definition
| Common name for a set of laws, including the Ethics in Patient Referrals Act of 1989, that prohibits the practice of "self-referral" by physicians, that is, referrals of Medicare and Medicaid patients to a provider of services paid for by government programs, when the physician has a direct or indirect ownership or investment interest in that provider. "Safe harbors" is the name given to permissable referral practices, as outlined in laws. Some states have a law limiting "self-referral" regardless of payer source. |
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Term
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Definition
| Financial statement that displays how the cash balance has changed during a fiscal period. Cash increases and decreases are reported in three categories of activities: operating, investing, and financing. This information can be useful in assessing the entity's ability to generate positive future net cash flows, meet its financial obligations, and pay dividends. |
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Term
| Statement of Changes in Owners' Equity (or Fund Balance) |
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Definition
| A financial statement that reflects the beginning owner's equity, the profit or loss of the current period, and the ending owner's equity as of the Balance Sheet date. Not-for-profits use "fund balance" instead of "owner's equity." |
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Term
| Straight-line Method of Depreciation |
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Definition
| A depreciation method that allocates equal amounts of depreciation expense to each full period of the asset's life: Annual Depreciation Expense = (Historical cost) / (Years of estimated useful life) |
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Definition
| As defined by the American Health Care Association, this is: "a comprehensive inpatient prgram designed for the individual who: (1) has had an acute event as a result of an illness, injury or exacerbation of a disease process: (2) has a determined course of treatment; and (3) does not require intensive diagnostice and/or invasive procedures." Subacute medical and rehabilitative care programs in nursing facilities may include specialty programs for : Post operative recovery, extensive wound care, ventilator support, brain injury care, hospice care, and respiratory or pulmonary management. |
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Definition
| Items consumed in the normal course of business operations, e.g., bandages and soap. Projected supply expenses are included in the operating budget, not the capital budget. |
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Term
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Definition
| Practice of a supplier giving a nursing facility excessive discounts on Medicare Part A items and services in return for the ability to service and bill nursing facility residents with part B coverage. This may be considered an illegal inducement. |
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Term
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Definition
| Commercial insurer or other private or pulbic entity (such as Medicare and Medicaid) which pays for all or part of the charges for a resident. |
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Term
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Definition
| The selection, when a claim is submitted to a third-party payer, of a billing code that is not the most appropriate descriptor of a service or condition and that may result in an overpayment to the provider. One type of upcoding is RUG creep. |
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Term
| Useful Life (or Service Life) |
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Definition
| The period of time a fixed asset (such as a building, piece of equipment, or vehicle) can be used by its owner in the production or sale of other assets or services. In order to allocate depreciationover time, total service life must be estimated when a fixed asset is purchased. |
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Term
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Definition
| A cost that varies with the change in the number of patients. |
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Term
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Definition
| A control technique that evaluates significant differences between budgeted and actual revenues and expenses. |
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Term
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Definition
| Form that the IRS requires an employer to give each employee by January 31 that shows the employee's earnings and income tax and FICA tax deductions for the past year. |
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Term
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Definition
| Form that the IRS requires an employer to allow each employee to submit on which the employee indicates marital status and number of withholding allowances claimed. This information must be used by the employer in determining amount of income tax to withhold. |
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Term
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Definition
| The excess of current assets over curreent liabilities. Working capital management is the effort to increase this desirable excess by increasing current assets in various ways and decreasing current liabilities in various ways. |
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Term
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Definition
| Removing an uncollectible account from the accounts receivable. Bad debts expense is increased and the asset, account receivable, is decreased when the account receivable is written off. |
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