Building your safety net: A safeguarding checklist for small healthcare organizations

For many small healthcare organizations, it can be a challenge to balance the complex environment of quality care, compliance and financial sustainability. Proper cost allocation and financial reporting, understanding Medicare Part A co-insurance and bad debt management, strategic planning for workforce transitions, and staying current with regulatory changes and documentation are key for any small healthcare organization to proactively plan for and adapt to uncertainty.

Proper cost allocation and financial reporting

One of the most crucial considerations for small healthcare organizations is to have systems in place that can accurately allocate costs. Accurate cost allocation directly impacts reimbursement, financial transparency and strategic decision making. Organizations should work with a qualified professional to determine which systems will enable them to have detailed tracking across all service lines. The chosen system must be able to determine how tracking will take place as well as which metrics need to be captured — for example, nursing hours per day, square footage, pounds of laundry processed, etc. Without proper tracking, costs cannot be allocated effectively. This approach allows organizations to understand which areas are profitable, supports informed decisions and meets the expectations of both lenders and board members.

Understanding Medicare Part A co-insurance and bad debt management

Navigating the complexities of Medicare Part A co-insurance is a significant challenge for skilled nursing facilities. After a pre-determined length of a patient’s Medicare Part A stay, a resident becomes responsible for co-insurance, which can easily turn into bad debt if unpaid. Facilities need a system and a way of logging bad debt, whether that is a simple Excel file or an integrated billing system to track these unpaid co-insurance amounts. Remaining compliant with billing and collection policies is essential for claiming reimbursable bad debts on the Medicare cost report. Small healthcare organizations can maximize their reimbursement and reduce financial risk by evaluating internal controls and building a system to track effectively, as well as training staff to manage these processes effectively.

Strategic planning for workforce transitions

As a large portion of the healthcare industry workforce is nearing retirement age, a significant staffing challenge is beginning to loom. It is vital to take the time now to assess which roles are at risk and develop succession plans to ensure continuity. Evaluate current staff for potential internal promotions, identify if there is a need for recruitment and consider outsourcing where it makes sense within the organization. If there is a potential for outsourcing staff to support back-office functions like accounting, tax or HR and payroll services, the Baker Tilly Advantage team is able to step in and be a source of support and continuity. Proactive planning can help organizations present institutional knowledge and maintain operational stability, particularly in specialized roles such as healthcare accounting, where finding qualified candidates for experienced roles can be especially difficult.