Contract Controller Services

Transcription

1 Contract Controller Services Expertise, Insight and Performance to Boost Efficiency and Drive Profitability Learn Whether Contract Controller Services are Right for Your Organization

2 Table of Contents Introduction... 3 Chapter One...4 The Role of the Controller in LTPAC Settings Chapter Two... 5 Why a Controller is Important to Your LTPAC Organization Chapter Three... 7 In-house Controller Versus Contract Controller Understanding the Benefits of Each Chapter Four...9 Could Your LTPAC Organization Benefit From Contract Controller Services? Chapter Five What to Look For in a Contract Controller Services Provider Conclusion

3 Introduction Contract Controller Services Expertise, Insight and Performance to Boost Efficiency and Drive Profitability These days, accounting and finance professionals are in high demand, and that reality has made it increasingly difficult for long-term post-acute care (LTPAC) organizations to attract and retain qualified controllers. This challenge extends across the LTPAC spectrum. Yet smaller LTPAC organizations in particular may find it cost prohibitive to hire a full-time controller they require higher-level financial skills and capabilities to perform essential duties, but their scopes may be limited, or the time requirement is lower. The experience, insights and expertise of a qualified controller are essential to maintaining current quality levels, ensuring profitability, and enabling future growth. More and more, LTPAC organizations are turning to contract controller services to fill this need. The reasons are clear: Qualified contract controllers from renowned service provider organizations offer a significant depth and breadth of experience and expertise operationally and they can also help your organization meet immense regulatory demands amidst an evolving regulatory landscape. Contract controller services can be customized to meet specialized needs. In the vast majority of cases, these services offer an enormous cost savings over a full-time controller. In select cases, the providing organization offers tangential consulting services (e.g., revenue cycle management, clinical, Medicare, implementation) that provide holistic organizational benefits. Contract controllers often identify and recommend valuable process improvements to the contracting organization as a result of their past experiences in similar LTPAC settings. This e-book was written to provide you with a broad snapshot of contract controller services what they are, why they re important in LTPAC settings, how they measure up against in-house controllers and what to look for in a contract controller. It is organized as follows: Chapter One: The Role of the Controller in LTPAC Settings Chapter Two: Why a Controller is Important to Your LTPAC Organization Chapter Three: In-house Controller Versus Contract Controller Understanding the Benefits of Each Chapter Four: Could Your LTPAC Organization Benefit From Contract Controller Services? Chapter Five: What to Look For in a Contract Controller Services Provider Conclusion and Resources We hope you find this information useful; our accounting and financial consulting team is always eager to answer your questions or discuss ways in which contract controller services can help your organization thrive. We have included our contact information in the Conclusion and we have also included helpful resources to provide additional information and context to this important subject. Let s get started! 3

4 Chapter One The Role of the Controller in LTPAC Settings If you work within the administrative arm of an LTPAC setting, then you likely have a fairly basic and functional idea of a controller s role within the enterprise. What may surprise you is the breadth of responsibilities that fall under this position. Consider the widely accepted daily duties of today s LTPAC controller: Manage purchasing and accounts payable processes Manage vendor contracts Oversee and / or collaborate with the payroll staff or third-party service provider on payroll functions Manage cash flow (and provide management with weekly cash position and forecast) Communicate with bankers and / or lenders Oversee revenue cycle outcomes (e.g., collections, forecasting, bad debt) Maintain general ledger and account reconciliations (and complete necessary audit work papers) Develop and implement best practice systems and procedures for all accounting functions Maintain the organization s accounting software application Compile financial statements for management, the board, lenders and any other designated third parties Provide supplemental reports as requested by management (e.g., analysis of budget variances, boardrequired documents) Assist management with annual operating budget development Assist management with review of contracts as requested Advise management on any matters that are financial in nature Provide tax and cost report accountant(s) with trial balance and supplemental information as required to complete tax returns and Medicare / Medicaid cost reports. (Note: Experienced LTPAC consulting organizations often complete state and federal cost reports under separate engagements from contract controller service engagements) Serve in an advisory capacity to the organization s board and / or leadership team As you can see, many crucial duties fall on a controller s plate each day. Some LTPAC organizations search far and wide to attract a full-time controller. Yet as with any discipline, it s tough to identify, attract and retain an individual who possesses all the requisite skills necessary for this position and do so at a reasonable total cost. That s why an increasing number of LTPACs are to turning to contract controller services from established providers. In our next chapter, we ll highlight the importance of a controller to your LTPAC organization. 4

5 Chapter Two Why a Controller is Important to Your LTPAC Organization In our last chapter, we asserted that high demand for accounting and finance professionals has made it more and more challenging for LTPAC organizations to attract and retain qualified controllers. This challenge is particularly daunting for smaller LTPAC organizations which may find it cost prohibitive to hire a full-time controller. That said, the high-level financial skills and capabilities that a controller provides fill a substantial need for any LTPAC, large or small. Below are some of the greatest benefits that a qualified controller (or qualified contract controller) offer LTPACs. Accurate cash management with tight profit margins and delayed cash flow in today s health care environment, effective cash management is critical to operating vitality. Confidence when the time comes for independent audits many lenders require independent audits. That, in turn, requires skilled accountants to prepare for and provide accurate information to auditors to achieve successful outcomes. Accurate information that enables good decision making skilled accountants are a must to ensure successful and timely information on financial performance and position. This information enables organizational leaders to make informed decisions. Safeguarding valuable assets controllers play a key role in safeguarding the revenue assets of an organization. Compliance controllers also are vital in the drive to achieve and maintain regulatory compliance. 5

6 Those are some of the primary benefits of utilizing a controller within a LTPAC setting. So what are the risks? Consider: Unnecessary losses resulting from such things as bad debt on uncollected revenue, overpayment of vendors, missed revenue, payments or receipts not in accordance with contracts, and bank fees for poor cash management Fines and penalties for late or missed filings, poor audit outcomes and other infractions Potential loss of funding from Medicare, Medicaid, banks and other lenders Erroneous business decisions Volatility and going-concern issues such as inaccurate financial performance and position, lack of cash flow to support operations, and relationships with vendors, payers and lenders In our next chapter, we ll compare the benefits and costs of utilizing an in-house controller versus contract controller services from an established and widely respected industry provider. 6

7 Chapter Three In-house Controller Versus Contract Controller Understanding the Benefits of Each In our previous chapters, we outlined the role of a controller in post-acute care settings and highlighted the many reasons why a controller is important in such settings. In this chapter, we will compare the benefits and costs of utilizing an in-house controller versus contract controller services from an established and widely respected industry provider. While every LTPAC organization s needs and circumstances are unique, there are also similarities and common challenges shared by all. Therefore, the benefits and costs described below apply to a general cross-section of LTPAC organizations. Benefits of an in-house controller include: Physical presence sometimes it s just good to have someone with high-level financial skills and capabilities around on a regular basis whether it s to answer questions, act as a sounding board, provide insights, or depending on the individual, project a sense of confidence and underscore organizational stability. Potential enhancement of organizational culture again, depending on the personality of the individual involved, an in-house controller could potentially benefit the organization s culture in several ways. That said, an individual with negative personality traits could have the opposite effect and it s worth noting that the negative effects associated with this are usually much more impactful on a LTPAC organization than positive effects. Perception of loss of control people often feel that having a staff member in the office allows them to exert more control. We believe this is a misconception. In today s LTPAC realm, far too many organizations fill their controller role with less-qualified and lessexperienced individuals. Consequently, non-financial leaders including many who sit on the enterprise s board find it difficult to perform their essential oversight duties and make informed decisions. 7

8 Conversely, the benefits of contract controller services include: Outside expertise contract controllers from established and widely respected providers offer a depth and breadth of expertise that, simply put, is a rare commodity. Established contract controllers often have worked for years decades even in a variety of LTPAC settings. Their experience and expertise can be enormously beneficial to LTPACs large and small. Customized services contract controller services are 100 percent customized to meet the specialized needs of every LTPAC organization. You purchase and utilize only those services you need, for the specific time in which they are needed. No more, no less. Experience and insights to meet immense regulatory demands and a complex and evolving regulatory landscape. The only constant in the LTPAC realm is change. Contract controllers from established and widely respected providers are part of organizations that stay on top of the latest trends, shifts and legislative actions. This can potentially enable your LTPAC organization to anticipate changes before they happen, and plan accordingly. Cost savings on several levels including human resources (e.g., salary and benefits), audit time and the corresponding expense. A rich depth of service offerings besides controller services and financial consulting, this includes revenue cycle management consulting, implementation consulting, clinical consulting, QAPI consulting, and consulting services related to Medicare and Medicaid. Knowledge of, and experience with, all widely used acute care technology and accounting platforms you ll gain the benefit of a contract controller who knows their way around LTPAC technology and accounting systems. This means a much shorter learning curve for your organization and more time devoted to performing essential controller duties. Experience with related disciplines oftentimes, contract controllers have provided services and assisted in engagements related to areas such as revenue cycle management and implementation consulting. When needs arise, they may prove to be a valuable asset in helping your organization meet these demands. Accountability contract controllers from established and widely respected providers are accountable not only to your organization, but to their employer. This double layer of accountability serves everyone well; to you, it provides peace of mind that the contract controller is meeting her / his obligations. To the outside provider organization, the contract controller s solid job performance underscores the value of their contract controller services and strengthens their reputation in the marketplace. In our next chapter, we ll pose questions designed to help you understand whether contract controller services are suitable for your LTPAC organization. 8

9 Chapter Four Could Your LTPAC Organization Benefit From Contract Controller Services? Thus far, our e-book has examined the essential role of the controller in LTPAC settings and highlighted the numerous benefits of contract controller services. Now it s time to evaluate the merits of contract controller services through the lens of your own LTPAC organization i.e., is it right for you, and what do you stand to gain by hiring a contract controller? Take a bird s-eye view of your LTPAC organization, think through your financial, reporting and regulatory challenges, consider your place in the broader market, and ask yourself the following: Contract Controller Services Expertise, Insight and Performance to Boost Efficiency and Drive Profitability Is your organization dealing with poor or unpredictable cash flow and is this a one-time or recurring problem? Are there specific instances when financial information is not accurate or, is a lack of accuracy in your financial information an ongoing issue? Has your executive team or board received negative feedback from bankers, lenders and / or auditors as a result of misleading or inaccurate financial information? Has your organization experienced difficulty recruiting or retaining financial professionals or staff? Likewise, has the organization suffered from high turnover? Does your current in-house financial staff lack accounting and / or regulatory knowledge, skills and experience? Does the high cost of retaining in-house financial staff represent an unwanted burden for your organization? Are executives and board members aware of proposed or pending regulations, and are they kept upto-date by your financial professionals on regulatory trends and issues? Similarly, has your organization ever been penalized for not conforming to a new regulation? If so, what did that cost the organization in time and money? Is a lack of sufficient financial experience and resources in your financial department inhibiting organizational growth? If your answer to any of these questions raises a red flag, that s one red flag too many and it certainly points to contract controller services as an obvious solution to the problem. Operating a LTPAC organization is challenging enough these days; having to deal with just one of the above issues let alone several can severely strain your organization and its finances, and put it at a significant disadvantage in an increasingly competitive market. Utilizing contract controller services from established and widely respected providers can help prevent these issues from ever arising. Furthermore, it can position your organization to seize opportunities for growth. Most important, it ultimately can help to maximize care for your residents. In our next chapter, we ll offer tips on what to look for in a contract controller services provider. 9

10 Chapter Five What to Look For in a Contract Controller Services Provider If you ve read through this e-book so far and determined that contract controller services could potentially be a wise move for your LTPAC organization, we think you ll find it helpful to know what to look for in a qualified provider of these services. In this chapter, we provide a quick rundown of some of the key qualities that define best-in-class contract controller services. Each LTPAC organization is different, so each one may require specialized skills or experience. Yet in our many years of providing contract controller services to LTPACs around the country, we ve found that most seek contract controllers with the following qualities: Depth of experience most established contract controllers have worked for years even decades in a variety of LTPAC settings. Their experience can be enormously beneficial to LTPACs of any size. Technology expertise when a contract controller understands LTPAC technology and accounting systems, the learning curve becomes much shorter and that leaves more time for performing essential controller duties. Regulatory / external / industry knowledge, and a proven commitment to staying on top of the changing regulatory landscape. As we ve said before, the only constant in the LTPAC realm is change. Contract controllers from established and widely respected providers are part of organizations that stay on top of the latest trends, shifts and legislative actions. This can potentially enable your LTPAC organization to anticipate changes before they happen, and plan accordingly. Availability and accessibility the contract controller you utilize should conform her / his schedule to your organization s internal time framework, and should be accessible as needed to perform essential duties, answer questions, or handle issues if or when they arise. A proven ability to provide customized solutions don t accept an off-the-shelf contract controller engagement. Your contract controller services provider should deliver a customized program to meet your specialized needs. This entails up-front dialogue and discovery, which enables the provider to develop its recommended program. 10

11 A wide breadth of service offerings besides controller services and financial consulting, this includes clinical consulting, revenue cycle management, implementation consulting, QAPI consulting, and Medicare and Medicaid consulting. References from other providers the contract controller services provider should be an established organization that is widely respected and relies on several LTPAC organizations to vouch for the quality of its contract controller services. Competitive cost structure several carve-outs can be hidden within that structure; make sure you and your team understand the full scope of services being provided and recognize the extent to which it s inclusive of all needed services. Involvement in the provider community and industry associations the contract controller services provider you retain should be an industry leader in every sense of the word. That means not only providing quality services, but also providing thought leadership, guidance and strong participation in industry groups and associations. When an organization is tangibly committed to advancing the industry it serves over time, you can be confident it will serve your needs well. Experience with related disciplines contract controllers from established and widely respected providers often provide services and assist in engagements related to areas such as revenue cycle management, QAPI consulting, implementation consulting, and Medicare and Medicaid consulting. When needs arise, they may prove to be a valuable asset in helping your organization meet these demands. Accountability contract controllers from established and widely respected providers are accountable not only to your organization, but to their employer. This double layer of accountability serves everyone well; to you, it provides peace of mind that the contract controller is meeting her / his obligations. To the outside provider, the contract controller s solid job performance underscores the value of their contract controller services and strengthens their reputation in the marketplace. 11

12 Conclusion Contract Controller Services Your First Step Begins With a Conversation Contract controller services have the potential to help your organization realize significant benefits from top to bottom. We hope you found this e-book useful as you think through the financial and operational challenges at your LTPAC facility, and consider how contract controller services could help address those challenges. The team of financial consulting professionals at Richter Healthcare Consultants is available to assist you with any needs you may have related to contract controller service implementation. We provide contract controller services for LTPAC organizations around the country We know the LTPAC landscape; We understand the challenges LTPAC organizations like yours face; We develop and deploy customized contract controller programs for LTPAC organizations like yours; We are always available to answer questions, discuss issues or help you and your staff navigate complex operational and industry challenges. If you d like to learn more about our contract controller services and the approach we could recommend for your organization, please call Jennifer Richter, CPA, or Allison Wood at for a free initial consultation. You can also learn more about us by visiting 12

13 About Richter Healthcare Consultants Led by a CPA and staffed with a team of more than 50 experienced healthcare professionals, Richter Healthcare Consultants is the trusted industry expert in consulting, healthcare accounting and revenue cycle management. We are constantly reviewing the latest regulatory issues to keep our clients up to date on changes and best practices that affect the operational efficiencies and outcomes of LTPAC providers nationwide. Resources Ohio Society of CPAs: Healthcare Financial Mangement Association (HFMA): American Healthcare Association: Ohio: Michigan: Massachusetts: Florida: LeadingAge: LeadingAge Ohio: LeadingAge Michigan: The American Institute of CPAs (AICPA): 13