Accounting concepts in managed care
The three main concepts of accounting that managed care organizations should consider are; Assets, capital, and liabilities (Clinton, 2011). The concepts are mainly addressed in the handling of financial resources by healthcare organizations. Assets include the resources that are controlled and owned by the managed care organization, and they are classified into two; current and non-current assets. Current assets include cash receivables, prepaid expenses, and income realized from the delivery of hospital services. Non-current assets are long-term resources such as buildings owned by the hospitals, land, and any other hospital equipment owned by the health organizations (Peter, 2001). Capital refers to all the resources owned by the hospital after all the liabilities and expenses have been settled. These resources are also known as the ‘owner’s equity’ of health organizations. Liabilities are payables that the health organization is responsible for, and they also represent claims of ownership by other parties in the health sector. Liabilities include; current and non-current liabilities. Current liabilities are due during the operational cycle of an organization, and they include; short-term borrowings, payables, and tax liabilities. Non-current liabilities are not due within a financial year of operation, and they include; mortgages, deferred taxes, and long-term bonds (Niall, 2010). The accounting principles are vital in health care, and they should be addressed to understand how managed care facilities operate financially.
References
Clinton. (2011). Managed accounting principles applicable to healthcare. New York: Thomas Reuters Publishers.
Niall. (2010). A study guide into accounting in managed care programs. Journal of Managed Care, 841-848.
Peter. (2001). Accounting principles in the managed care handbook. Aspen Publishers.
Identifier standards
The four standards identified under the Medicare and Medicaid services help standardize the identification of health providers and their employers to enable consistency and efficiency in the identification process (Armstrong, 2005). The standards are recorded under the HIPAA rules to ensure simplicity in the identification process. The standards include; the standard unique employer identifier, national provider identifier, national health plan identifier, and individual national identifier (Gross, 2007). The standard unique employer identifier involves using a unique employee identification number listed on the employee’s wage and tax statements. The national provider identifier involves the use of a unique identification number offered by the government, and it regulates how health care providers conduct all transactions. The identifier has a ten-digit numeric pattern applied in all HIPAA transactions, and the identifier does not disclose any other private information of health providers. The national health plan identifier involves electronic standardization of all the transactions conducted by the health providers through proper scrutiny of the health plans. National individual identifiers are enforced by the government to regulate the financial transaction conducted by health care providers. However, the identifier is currently not being pursued due to claims of infringement of privacy rights (Ross, 2003).
References
Armstrong. (2005). The unique identifiers under the HIPAA rules and guidelines. Arch Intern Med Publishers.
Gross. (2007). A study guide on identifiers to help keep patient information private and secure. New York: New York Times.
Ross. (2003). A study guide on HIPAA unique identifiers on patient information. Journal of American Informatics, 129-138.
HIPAA requirements and standards
The Health Insurance Portability and Accountability Act is a set of guidelines and standards that govern health information by promoting security and privacy through unique identifiers and code sets (Brian, 1997). HIPAA standards address the following concepts; self-audits, remediation plans, employee training, proper documentation to ensure the effective and secure management of patient health information. HIPAA requirements call for health organizations to offer security provision of administrative information, physical safeguards, technical safeguards, and documentation safeguards. Under administrative safeguards, the standards should ensure a risk analysis of the health information, risk management, security awareness, and how to address occurrences that may affect the pieces of equipment with electronic health information (Terry, 2015). Under physical safeguards, the HIPAA standards provide access controls of electronic information, the security of systems with health information, and device controls to ensure accountability in handling patient information. Technical safeguards involve applying the standards to ensure only authorized personnel can access health information through the use of unique identifiers and encryption of the health data. Documentation safeguards require that proper assessment be done to ensure only the authorized employees access and share patient information based on the set procedures to ensure the security of health information (Rowe, 2005).
References
Brian. (1997). Protecting patient information through the HIPAA Act. Health Affairs Publishers.
Rowe. (2005). The HIPAA privacy rule. New York: New York.
Terry. (2015). A study guide of the HIPAA rules. Physician Journal, 3-6.
What is S, G & A?
S, G & A is an abbreviation for selling, general, and administrative costs incurred by organizations in the daily operations. Such information is drafted in the income statements of companies. Such costs include all the direct and indirect expenses that are incurred by an organization. Such costs are not directly related to the production of goods or delivery of services, but they are inclusive of all administrative and selling expenses incurred (Erich & Helfert, 2001).
Structure of governance and management in payer organizations
In the United States, most health payer organizations apply the functional organizational structure that clearly defines the functions listed under the management and employee positions in such organizations. The management of the organizations is responsible for the following functions; planning, staffing, directing, organizing, and controlling the execution of all the operations to ensure the provision of quality health services to the American population (Porter, 2017). The size of the health organizations dictates the structure be applied in governing the institution. In most large health payer institutions, the deep vertical structure is applied to reflect the various levels of administrative controls based on the facility’s hierarchy. The functional organizational structure ensures a strict chain of command and reporting, facilitating effective communication, accountability, and efficient division of labor (Gabriela, 2014).
References
Erich & Helfert. (2001). S, G & A expenses in financial statements. Mc Graw-Hill Publishers.
Gabriela. (2014). Organizational structure and management of health care centers. BMC Publishers.
Porter. (2017). A study guide for health care organizations. New York: New York Times.