Rekj

Topics: Balance sheet, Accounts receivable, Generally Accepted Accounting Principles Pages: 2 (955 words) Published: January 24, 2015
Re: How does slower payments change a Balance Sheet?
,

Good post.  The accounts that will be impacted on the Balance Sheet (which was the nature of my question) are as follows.

If payers have longer to pay THEN the patient accounts receivable account will no doubt increase because the hospital is receiving payments on these accounts more slowly. This slower payment might also decrease cash accounts of the organization. Additionally, if the slower receipt of payments impacts the organization's ability to quickly pay its own operational expenses then you might also see an increase in the accounts payable liability account. 

Conversely, on the Income Statement, one would expect to see an increase in the patient revenue account since the deal was that the MCO had longer to pay in trade for a HIGHER reimbursement rate.  Also, on the Income Statement as the receivables account increases then you would also see an increase in the Provision for Doubtful Accounts.

How might negotiating an MCO contract affect financial statements?

The accounts that will be impacted on the Balance Sheet (which was the nature of my question) are as follows.

If payers have longer to pay THEN the patient accounts receivable account will no doubt increase because the hospital is receiving payments on these accounts more slowly. This slower payment might also decrease cash accounts of the organization. Additionally, if the slower receipt of payments impacts the organization's ability to quickly pay its own operational expenses then you might also see an increase in the accounts payable liability account. 

Conversely, on the Income Statement, one would expect to see an increase in the patient revenue account since the deal was that the MCO had longer to pay in trade for a HIGHER reimbursement rate.  Also, on the Income Statement as the receivables account increases then you would also see an increase in the Provision for Doubtful Accounts.

 How does the Provision for...
Continue Reading

Please join StudyMode to read the full document

Become a StudyMode Member

Sign Up - It's Free