Accounting For Healthcare Industry In USA
What is a CPA for healthcare?
Is a CPA that specializes in clients within the healthcare industry, the healthcare industry has different sub-sectors that are clinics, elderly patient care, activities for rehab patients, medical care for retirees. It all depends for the sub-sector the company has decided to invest in.
How do accountants manage for healthcare?
It all depends on the company that the company is in. Just to give you an example, companies that tend to the elderly or retirees the income that they receive comes from Medicare, this is a program that is held for the elderly and is a tax that employees pay with the objective that when we retire, we have a medical plan. So, whenever a company is serving to the retirees either in healthcare or in rehab, they are always dealing with Medicare. For example, pharmacy’s sell to the elderly they also deal with Medicare, so Medicare is like a big fund that pays to all the companies that serve to the retirees in healthcare. There are companies that transport from home to the clinics. So, this is how accountants manage, it all depends on the activity of the company with their patients and clients and that will be how they receive income from clients.
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What is healthcare bookkeeping?
Bookkeeping is the keeping of the books for healthcare so in this sense for example it starts with the bank accounts, the healthcare companies open a bank account and receive the payments from agencies. There are agencies for all those who care retirees at home, they are in the middle companies that they deal with Medicare, and they subcontracted this companies, they will receive their income from this middle agency that deal directly with Medicare and many of these small providers of services do not directly deal with Medicare. All that will be handled by an intermediary, and they will deal with the providers of each service, and this is how they receive income, when that happens then the accounting, the bookkeeping is straightforward, the income is the money received from the intermediary or Medicare directly. And all expenses are paid to third parties.
What are the benefits of having a CPA specialized in healthcare?
The benefit will be the understanding of the industry from the CPA and how that knowledge will help the owner of the company to correctly classify the expenses and the elaboration of the tax return in the year and the decisions that the owner must take during the year for the administration of the business. Just to give an example, what will be easier dealing with Medicare directly or dealing with an intermediary, Medicare will always require more. So, if the owner doesn’t have the required licenses Medicare will not be able to provide for service and perhaps will be easier to deal with a provider in the middle because it depends on the ability of the vendor to have the capital to deal directly with Medicare and at the end of the year the correct classification of the expense for the elaboration of the tax return.
Readers should note that this article is only intended to convey general information on these issues and that FAS CPA & Consultants (FAS) in no way intends for the contents of this article to be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. This article cannot serve as a substitute for such professional services or advice. Any decision or action that may affect the reader’s business should not rely solely on the contents of this article, but should rather be consulted on with a qualified professional adviser. FAS shall not be responsible for any loss sustained by any person who relies on this presentation. This article is subject to change at any time and for any reason.
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