Owning a business in the healthcare industry is not only greatly rewarding, but also exciting given the advances in medical technology and what can be done in terms of raising the awareness for the importance of prioritizing health and healthcare. But, the sector is highly regulated and not exempt from challenges. One of the major requirements for healthcare providers is the high demand for accurate and transparent financial reporting. This is absolutely crucial for healthcare practices as it not only impacts the financial stability of the health facility, but also its compliance with regulatory requirements.
Healthcare accounting tips and best practices
We take a look at some of the intricacies of financial reporting in the healthcare industry and offer tips for handling the accounting side of your healthcare practice impeccably.
1. Understand healthcare-specific regulations and standards
Accountants working in the healthcare industry must have a thorough understanding of the regulations and accounting standards specific to this sector.
Some of the regulations to take into account in this regard are as follows:
- Health regulations:
- The Health Insurance Portability and Accountability Act (HIPAA),
- The Affordable Care Act (ACA), and the Medicare and Medicaid programs.
- Accounting standards:
- The Healthcare Financial Management Association’s (HFMA) Principles and Practices for Healthcare Financial Management.
2. Maintain accurate financial records
Once your healthcare practice understands the healthcare-specific regulations and standards, it is important to maintain accurate accounting records within your business to ensure compliance.
When healthcare accountants monitor industry-specific metric such as patient volumes, procedure rates and physician productivity then financial records don’t only aid in keeping you on track with regulatory standards, but also assist in monitoring and progressing the growth of your health practice.
Records can increase the likelihood of growth as it gives great insight into which of your healthcare services are the most popular, allowing you to make business-expanding decisions with the data.
3. Make use of health-specific accounting software to record data
Accounting software with comprehensive and high customization ability is highly beneficial to the healthcare industry as practices deal with a large amount of financial data, that range from patient billing and insurance claims to payroll. To keep the accounting side of your medical business in tact it is advisable that you employ the services of reliable accounting software. This will not only help you generate meaningful financial reports that reflect the operational and clinical performance of your health facility, accounting software integrations can also aid in automating tedious data collection processes, minimizing the chance of errors that could lead to a mess in the accounting records of your practice.
4. Partner with financial experts to develop winning growth strategies
Health businesses typically make use of Management Service Organizations that provide them with administrative and management services such as billing, coding, and collections. This alleviates the practice from day-to-day admin and finance duties and helps to ensure regulatory compliance.
Working with a CPA will further safeguard your practice and gear it for growth as the experts study the financial data to give you better insights into what is working and what can be improved within your business. CPAs work to hold you in good stead with the IRS and help to digest your financial data to improve your service offering for growth.
At Fusion CPA, we can help you manage the tax and accounting aspect of your healthcare business. We assist with accounting software solutions that support accurate financial reporting and compliance. We can also help you with a business development strategy to boost your growth. Contact us for a consult today.
__________________________________________________
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
