copyright © 2008 delmar learning. all rights reserved. chapter 18 financial management of the...

Copyright © 2008 Delmar Learning. All rights reserved.

Chapter 18

Financial

Management of the Medical Practice


2

Objectives

• Review the learning and performance objectives for this chapter

• By the end of this chapter, demonstrate the procedures in the textbook and the job skills in the workbook


3

• Service– It takes a well-rounded medical practice to be

successful, one that patients will talk about with high regard.

Heart of the Health Care Professional


4

Computerized Financial Management

• Medical Office Budget– Income and expenses– Analyze previous year’s– Project for upcoming year


5


• Financial Status Reports– Accounts Receivable

• List of account balances

– Aging Summary Analysis• Age of accounts receivable


6


• Financial Status Reports– Insurance Aging Report

• Time insurance companies take to pay claims

– Financial Summary• Monthly report


7


• Financial Status Reports– Periodic Transaction Summary

• Presents financial position of practice

– Profit and Loss Statement• Summarizes income and expenses


8

Analyzing Practice Productivity

• Collection Ratio– Status of collections– Possible potential losses– Payments/fees charged = collection ratio


9


• Overhead Expenses– Cost to run the practice– Determine percent of income used– Monitor regularly


10


• Cost of procedures and services– Total expenses for procedure– Divide by number of procedures– = Cost of procedure


11


• Managed Care Analysis– Capitated payments received– Number of member visits– Decision to continue to participate


12

Accounts Payable

• Check Controls– Control of office checking account– Verify purchase orders– Monitor utility bills

• Create headings and post entries in an accounts payable system, write checks– Procedure 18-1


13

Payroll

• Wages and Hours of Work– Overtime Rules

• Over 40 hours worked in a week

– Posting Requirements• Federal labor law information signs• Local labor law signs


14

Payroll

• Payroll Procedures– Department of Labor Regulations– Records of hours worked and wages – Separate record for each employee– Itemized statement to employee


15

Payroll

• Employer Identification Number– 9-digit number for tax accounting– Provided by the Internal Revenue Service

• Social Security Number– Required by age two– Employment Eligibility Verification

• Form I-9


16

Payroll

• Employee Withholding Allowance Certificate– Form W-4

– States number of exemptions claimed

– Fewer exemptions = higher tax

– One exemption for self

– One exemption for each dependent


17

Payroll

• Payroll Deductions– Federal Insurance Contributions Act

• Three programs financed• Disability, Medicare, retirement

– Income Tax Deductions• Federal withholding tax• State withholding tax


18

Payroll

• Payroll Deductions– Disability Insurance Deductions

• Required in five states

– Optional Payroll Deductions or Benefits• Credit Union deposits• Partial payment for insurance benefits


19

Payroll

• Federal Unemployment Tax– Paid by employer– Costs of state unemployment programs– Annual Tax Return

• Employers must report these payments


20

Payroll

• State Unemployment Tax– Paid by employer– Rate set by state– Funds for unemployment compensation


21

Payroll

• Tax Reports– Employer’s Tax Guide

• Guidelines and requirements

– Federal Tax Deposits and Receipts• Employers act as collection agents

– Employer’s Quarterly Federal Tax Return• Payment of taxes withheld from paychecks


22

Payroll

• Tax Reports– Wage and Tax Statement

• W-2 given to employee at end of year

– Transmittal of Wage and Tax Statement• Comparison summary• Taxes reported on W-2 forms• Taxes paid quarterly


23

Payroll

• Tax Reports– Employee’s Earning Record

• Separate financial record for each employee• Gross income, deductions, net income

– Payroll Register• Summary of time cards


24

Payroll


25

Payroll

• Tax Reports– Payroll via electronic banking

• Direct deposit to bank account

– Create category headings, determine deductions, calculate payroll, and make entries to a payroll register

• Procedure 18-2


26

Payroll

• Tax Reports– Write-it-once check writing and payroll journal

systems– Layered forms– Pegboard system


27

Stop and Think

• Prepare an analysis to determine the effectiveness of capitated plans– Review the scenario– What information do you need?– What type of formula will you use?– What other information may have an impact?


28

Stop and Think

• Determine payroll frequency for deductions– Review the scenario– What are the payroll dates for next month?– Where will you find the deductions?– Write down your answers by each staff

member

copyright © 2008 delmar learning. all rights reserved. chapter 18 financial management of the...

Documents

delmar learning

medical practice slide

employee slide

workbook slide

cost of procedure slide

collection ratio slide

upcoming year slide

health care professional