Big changes are coming for chief financial officers at laboratory companies, hospitals, and health systems that report financial performance using GAAP. CFOs at these organizations will soon be required to comply with the new FASB Rule 606–Revenue Recognition Standard. That means all contracts, including managed care contracts and patient self-pay arrangements, must be reported in a different manner.
This is significant, for two reasons. First, all labs, hospitals, and health systems that report under GAAP must apply Rule 606’s new method to every contract to determine how to report revenue from that source. Experts say this will be a daunting and complex task.
Second, it is expected that many lab companies, hospitals, and health systems will end up with different financial results because of the change from the existing way they recognize revenue from different contracts. Each type of managed care contract, payer contracts involving patients with high deductibles, and patient self-pay arrangements must be assessed and the revenue reported in compliance with Rule 606. This could result in less revenue and profit in financial reports, compared to the existing GAAP methods.
“In both the laboratory and hospital sectors of healthcare, this is a significant and under-reported story,” stated Robert L. Michel, Editor-In-Chief of The Dark Report. “Many senior healthcare executives and managers are unaware of FASB’s Rule 606-Revenue Recognition Standard. Yet, this rule is will soon be effective, with public companies required to comply first, followed by private companies and not-for-profit organizations.”
To help chief financial officers and managers at lab companies, hospitals, and health systems prepare to implement FASB Rule 606, The Dark Report and Dark Daily are offering a timely webinar, entitled, “Preparing your Lab Company or Hospital for Big Changes in Revenue Recognition Standards and Audits by Your CPA Firm.” It will take place on Tuesday, May 30, at 1 pm EDT.
Casey Hayes, Audit Partner, Ernst & Young, San Diego, CA
Roger Newman, Financial Analyst, XIFIN, Inc., San Diego, CA
Webinar participants will learn all this and more during the information-packed 90-minute session:
- Understand why ASC 606-Revenue Recognition Standard makes fundamental changes to the existing requirements for reporting revenue from individual contracts
- Learn to create a framework to analyze the lab’s unique mix of contracts and payer types to comply with ASC 606
- Know the specific problems faced when analyzing data from contracts involving high-deductible health plans and the patient-pay component
- Identify specific ways that ASC 606-Revenue Recognition Standard can improve the lab’s audited financial performance
- Appreciate the reasons why implementation of ASC 606 can produce a weaker financial performance compared to a lab’s current accounting practices
- Discover what—consistent with GAAP—a CPA firm will do when auditing records for compliance with ASC 606
- Know the risks for improper or inappropriate compliance with the new rule, from best case to worst case
For more information about “Preparing your Lab Company or Hospital for Big Changes in Revenue Recognition Standards and Audits by Your CPA Firm.” and to view webinar details including presenter biographies and pricing, visit http://bit.ly/2qy3cYv. You may also contact Chris Garcia at 512-264-7103.
About THE DARK REPORT
Established in 1995, THE DARK REPORT is the leading source of exclusive business intelligence for laboratory CEOs, COOs, CFOs, Pathologists and Senior industry executives. It is widely read by leaders in laboratory medicine and diagnostics. The Dark Report produces the famous Executive War College on Laboratory and Pathology Management every spring, which showcases innovations by the nation’s and globe’s leading laboratory organizations. Dark Daily is an Internet-based e-briefing intelligence service, read worldwide by thought leaders in laboratory and pathology management. Other well-known conferences conducted by THE DARK REPORT are Lab Quality Confab (on the use of Lean and Six Sigma methods in labs and hospitals) and Molecular Summit (on the integration of in vivo and in vitro diagnostics). THE DARK REPORT co-produces Frontiers in Laboratory Medicine annually in the United Kingdom; Executive Edge bi-annually in Canada; and The Business of Pathology bi-annually in Australia.