Healthcare Accounting Financial Reporting & Analysis Flashcards

Under ASC 954, which financial statement is unique to not-for-profit healthcare entities compared to for-profit hospitals?

Answer: Statement of changes in net assets

Not-for-profit healthcare entities present a statement of changes in net assets, classifying net assets as with or without donor restrictions per ASC 954.

A hospital's days in accounts receivable is calculated as:

Answer: Average accounts receivable / (Net patient revenue / 365)

Days in accounts receivable equals average net accounts receivable divided by average daily net patient revenue (net patient revenue divided by 365).

Which Medicare cost report form do hospitals use to report cost and charge data to CMS annually?

Answer: Form CMS-2552

Form CMS-2552 (the Hospital Cost Report) is the annual Medicare cost report hospitals submit to their Medicare Administrative Contractor.

In healthcare financial reporting, 'contractual adjustments' represent:

Answer: The difference between gross charges and amounts agreed upon with payers

Contractual adjustments are the difference between a hospital's gross charges and the negotiated or mandated rates accepted from payers such as Medicare, Medicaid, and commercial insurers.

A healthcare organization's operating margin is best defined as:

Answer: Operating income / Total operating revenue

Operating margin equals operating income divided by total operating revenue, measuring core operational profitability excluding non-operating items.

Under GASB 34, a governmental hospital must present which primary financial statements?

Answer: Statement of net position, statement of revenues/expenses/changes in net position, and cash flow statement

Governmental hospitals following GASB 34 present a statement of net position, a statement of revenues, expenses, and changes in net position, and a statement of cash flows.

Which ratio measures a hospital's ability to cover its long-term debt obligations from operations?

Answer: Debt service coverage ratio

Debt service coverage ratio equals income available for debt service (operating income plus depreciation and amortization) divided by annual debt service requirements.