Hot Topics: Accounting Roundtable

September 12, 2019

Scott Gold, CPAPartnersgold@bkd.com

Ally Jackson, CPAManagerajackson@bkd.com

Revenue Recognition Standard: What Is Your Implementation Plan?Insights on Implementation of the New Revenue Recognition Standard for CHCs

September 12, 2019

Roundtable Goals

• Two key takeaways

• Lessons learned from early adopters• Development of an implementation plan

Lessons Learned

1. Effective Date2. Valuation Methodology3. Data Extraction4. Time Investment

Effective Date

• Public entities• Already in or past year of adoption

• Nonpublic entities• Fiscal years-ending December 31, 2019 and after

• Implementation starts at the beginning of fiscal year• CHCs with fiscal year-ends December through August are

already under new standards

Estimation Methodology

Data Extraction

Time Investment

60-120 hours

Additional management (accounting & billing) and/or

consulting hours

30-50 hours

Additional audit hours in year of implementation

Implementation Plan

1. Designate someone to oversee implementation2. Educate accounting, billing and other stakeholders

• Accountant responsible for preparing revenue and receivable entries

• Revenue cycle manager (deep understanding of reimbursement)• If not listed above, expert of EHR reporting• Users of financial statements (management and Board)

3. Identify revenue streams subject to ASC 606

Implementation Plan

5. Determine implementation method6. Extract, validate and analyze data for portfolio development7. Adopt compliant policies and procedures, including updates

to internal control8. Analyze reasonableness of new processes for estimating

revenue and receivables9. Draft financial statement disclosures

Missing the Foundational Knowledge?

• FASB Revenue Recognition Basics for CHCs• Introduction to ASU 2014-09 for CHCs

• FASB Revenue Recognition for CHCs: A Focus on Patient Service Revenue• Step-by-step working through the five-step model

• FASB Revenue Recognition for CHCs: A Focus on Financial Reporting• Statement of operations, footnote disclosures & adoption methodology

• FASB Revenue Recognition for CHCs: A Focus on Other Affected Revenue Streams

• Considerations for pharmacy and third-party cost report settlements

Other Revenue Recognition Resources

• Lessons Learned Series: The Time Was Yesterday for CHCs to Prepare for New FASB Standards

• Kick-off to upcoming “Lessons Learned” series• CHC Revenue Recognition Readiness Assessment• Subscribe to BKD CHC Newsletter and Follow @BKDHC and

@allyhjackson on Twitter for info on remainder of series, including free webinar

340B Drug Discount Program: Balancing Compliance and Operational Strategy to Increase Access and Generate SavingsInsights on Defending your Program

September 12, 2019

Increased flexibility to promote access across the continuum of care

Overlaps between 330 and 340B1. Sliding Fee

a. Dispensing Fee1. In House2. Contract

b. Drug Cost2. Charges for Pharmacy - PPS or APM

a. Visit Chargeb. RX Charge – Ancillary

1. Fill Fee2. Drug Fee3. In-Kind/Samples

3. Pharmacy support staff4. Policy and procedure

a. One Stop Shop Mindset

340B Strategy

Strategy

Legislative Changes

Compliance

340B Drug Pricing Program

What Are We Doing with the Money?

• Increasing access to more services• Strengthening financial health

• Operating Reserves• Enhancing facilities• Reducing turnover• Giving out huge bonuses?

19 // experience access

Savings Calculation

20 // experience access

Key Communication and Education21 // experience access

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Education and Communication1. The C suite

• CEO Voice must Set Tone for the Importance of the Program for the Organization, Governance and Community• CFO Voice must communicate the financial story of the Savings• CRO Voice must highlight the importance of Compliance and Monitoring of Compliance for 340B and impact on other programs• CMO Voice must educate Clinical Staff to the importance of program stressing Access and Better quality of patient care

2. Governance• Board must be educated on the program• Key involvement in the community

3. Medical Staff• Must Understand that program helps patients• Must understand enhanced access to discounted drugs

4. The Pharmacies• Community relationships• PBM pressure

5. The Patients• Understand that they are getting better drugs at a discount

6. Billing Department• Understand proper billing process to maximize savings

22 // experience access

When to Integrate Pharmacists?

• Interventions• Pharmacotherapy consultation• Anticoagulation management• Immunizations• Education

• Medication therapy management (MTM)• Diabetic education

• Chronic care management • Preventive services

340B Compliance

Eligibility

Registration

Diversion

DuplicateDiscounts

ContractPharmacy

Group Purchasing

Organization

Orphan Drugs

• OIG interviewed 30 covered entities and eight administrators with 199 unique contract pharmacies relationships

• For each scenario there was not a clear consensus of the proper handling

• How do you define your provider list?• Do you have a time restriction?• Do you match to clinical information?• How do you handle referrals?• Do you have visiting specialists?

25 // experience access

Falling Through the Cracks

• Clinic administered 340 drugs

• Patient/self-administered 340B drugs

• Rarely stored in the pharmacy

• Tracking and auditable records?

Other Hot Topics

Other Hot Topics Based on Survey Results

• Cash Flow• Financial Projections• Growth• Workforce• HRSA Site Review• 330 Grant Compliance• Fee Schedule

bkd.com/HC | @bkdHC