Flash forward several months – it’s the New Year and you are ready to start off fresh. But wait, before you can start a fresh new year, you have to answer a bunch of questions and provide all sorts of paperwork to back up work you did last year. It’s audit and cost report time. All you want to do is move forward and you are suddenly expected to answer questions about activity that happened 10-11 months ago.  As a busy business office, you are lucky you can remember what happened last week let alone 10 months ago.

It’s never too late to start preparing for year end. For those of you who have been around, you already know what you are going to be asked for. We know what documents are required for cost reports. We know what auditors are going to be looking for and what they will ask about. By starting a practice of reviewing and gathering these items monthly as part of your month end AR close steps, you will save yourself loads of time and stress months from now.

Documents to Review as Part of Month End AR

Bad Debt Schedule for Medicare Cost Report

Rather than trying to put together the schedule of accounts for the whole year, populate the Exhibit  monthly as zero coinsurance claims process or as you write them off of the AR. At the same time, gather the documentation for those claims that processed that month. By addressing these monthly as they occur, you will save yourself a lot of time and stress at the beginning of the year when you are asked to provide the form and the supporting documents. You won’t have to dig through a year’s worth of remittances or print multiple claim copies. By the beginning of January, you will have everything all complete and ready to go.

Miscellaneous Revenue/Cash Entries

This is an area that auditors often scrutinize. Any monies that are posted against a Miscellaneous revenue account.  The best practice is to post monies against true and specific GL accounts but there comes a time when you must post against a Miscellaneous revenue account.  There should really only be two situations that you are posting against a Miscellaneous revenue account. One is a temporary resting point. You are posting against a Miscellaneous revenue account temporarily until a proper account is determined or the monies are reversed. In this case you will have an entry against the Miscellaneous revenue account and then a separate posting entry backing it out of the Miscellaneous revenue account. In this case you want to ensure you have equal debit and credit and the end effect of the Miscellaneous revenue account is zero. You will also want to document the entries with good descriptions to identify that there is an in and an out. The second situation would be where you are directed to post it towards a Miscellaneous revenue account and then an entry is made on the GL side to move the posting to the proper account. On the AR side, you will want to make sure you document the entry with a good description indicating that a reversing entry is to be made on the GL side.

Medicare/Medicaid Withholds or Settlements

Often you are faced with Medicare or Medicaid withholding funds either temporarily or permanently for a penalty or fee. You will also have instances where Medicare or Medicaid pays you a settlement lump sum payment based on a cost report settlement or retro mass adjustment. When you are faced with these transactions you want to make sure you are posting to a correct and specific account whenever possible. For example, many providers set up a GL account for tracking Medicare Settlement payments, or Medicare Withholds. As you receive these payments or withholds, make sure you are posting them properly and document a good description on the transaction. This will help months from now when you are asked how you recorded such payments or withholds.

These are just a few areas where you can start keeping track of now that will save you tons of time and stress later on.  Small, more frequent efforts now equals no long hours and stress at year end time.