The National Association for Home Care & Hospice (NAHC) and the Home Care & Hospice Financial Managers Association (HHFMA) have released the home care and hospice industry’s first uniform chart of accounts in an effort to create financial reporting uniformity for the industry.
“The impetus essentially was that we have all of these statements being made by MedPAC and their staff based upon their analysis of Medicare cost reports,” said Pat Laff, chair of the HHFMA’s uniform account committee. “Medicare cost reports essentially do not really yield a whole bunch of information, and what’s more, who’s to say that they’re all accurately prepared?”
With a lack of uniform financial reporting in the industry, said Laff, it is challenging for the industry and lawmakers to accurately crunch data. The uniform chart of accounts, if adopted by members of the home care and hospice industry, will give the industry the ability to actually analyze its own data, Laff said.
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“What we’re trying to do is to get a more accurate measure of what the costs truly are and that the costs are then looked upon in relationship to the costs of the involvement of the provision of care, as opposed to (how) the Medicare cost reports artificially develop them,” he said.
The uniform chart of accounts, which covers any type of product line that falls under the home care umbrella – from hospice to pharmacy – also affords individual agencies and companies a tool that can help them run their businesses better by allowing them to gain a better understanding of what their costs actually are, Laff said.
NAHC’s and HHFMA’s uniform chart of accounts is available to anyone on NAHC’s website. There are no requirements that organizations in the industry use it but Laff stresses the importance of having uniform financial reporting.
“It’s important to the industry that the right financial analysis be used in the same way by everyone concerned at the regulatory and legislative area as well as the providers themselves so that everybody’s talking about the same set of numbers – and that they’re real ones,” he said.