Close
SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

2011-2012 ANNUAL REPORT [Healthcare Financial Management]
[January 03, 2013]

2011-2012 ANNUAL REPORT [Healthcare Financial Management]

(Healthcare Financial Management Via Acquire Media NewsEdge) DEAR VALUED COLLEAGUES: The U.S. Supreme Court's landmark decision in late June upholding the Affordable Care Act signaled that we must continue to prepare for the transition to a value-based payment environment. This past year, HFMA helped members "believe to achieve" by identifying strategies to pursue in improving the quality of health care while increasing the efficiency of care delivered. Among the highlights of the year: * HFMA released the first report from Phase 2 of the Value Project, Defining and Delivering Value, which identified key strategies hospitals and health systems should be undertaking now to deliver greater value.

* HFMA released MAP Key performance indicators for physician practice management and launched a new MAP Award- the MAP Award for Performance Improvement in Revenue Cycle.

* ANI featured several industry leaders who offered insights and perspectives on several topics, including increasing quality of care, payment and delivery reform changes, cost-effective health care, and recent healthcare trends.


Another significant event in the past year was the announcement of a change in staff leadership at HFMA. At the close of the fiscal year, after 26 years of outstanding guidance as HFMA's president and CEO, Dick Clarke, retired. With the beginning of the current year, he has been succeeded by Joe Fifer, whose vision for the role finance professionals play in improving the healthcare system will benefit HFMA for years to come.

I am grateful for the opportunity in the past year to work with you as we prepare for a value -based future and the changes occurring in the healthcare marketplace.

Gregory M. Adams, FHFMA 2011-13 Chair HFMA HFMA 2011-2012 BOARD OF DIRECTORS HFMA is guided by the experience and vision of a dedicated Board of Directors. The 2011-12 HFMA Board of Directors are: BACK ROW, LEFT TO RIGHT: Reginald J. Albert, FHFMA Kim Griffin- Hunter, CPA Christine D. Sarrico, FHFMA Paul E. Pedersen Peter DeAngelis, Jr., FHFMA, CPA Phyllis F. Lantos, FHFMA Rebecca L. Speight, FHFMA, CPA Kiran N. Batheja, FHFMA FRONT ROW, LEFT TO RIGHT: Melinda S. Hancock, FHFMA Ralph E. Lawson, FHFMA, CPA Gregory M. Adams, FHFMA Richard L. Clarke, DHA, FHFMA Steven Rose, FHFMA, CPA Events on the national scene in 201 continued to pave the way for a new era of value-based payment. HFMA helped healthcare finance professionals prepare for the changes ahead by assessing the implications of legislative and market reform, identifying strategies for success, and providing healthcare finance leaders with guidance and support.

MEMBERSHIP HFMA's membership growth and strong retention reflect the value found in the knowledge and opportunities that HFMA provides to its members, especially during times of change. During FY12, HFMA ended the year with 39,414 members. This represents a strong retention rate of 87.90 percent.

LEADERSHIP CHANGE For the first time in 26 years, there was a change in the highest position of staff leadership at HFMA. In 3011- 12, Joseph J. Fifer, FHFMA, CPA, chair of the HFMA Board of Directors in 2006-07, was named president and CEO. He has succeeded Richard L. Clarke, DHA, FHFMA, who retired in FY12 after more than a quarter of a century in the top position.

Fifer, who assumed the role in June 2012, came to HFMA from Spectrum Health, Grand Rapids, Mich., where he was vice president of hospital finance. "I am honored to assume this HFMA leadership role at a time when finance professionals can deliver significant industry improvement," Fifer said.

Under Clarke, who had been president and CEO since 1986, HFMA experienced membership and operating revenue growth as well as broad influence in improving healthcare efficiency and effectiveness through initiatives such as the PATIENT FRIENDLY BILLING® project. Clarke was named one of Modem Healthcare magazine's 100 Most Powerful in Health Care for nine consecutive years.

"I have been impressed by the dedication of HFMA members not only to the Association, but also to their role in improving our nation's health," Clarke said. "It has been an honor to serve with them and to support the mission of HFMA." THOUGHT LEADERSHIP VALUE PROJECT At this year's ANI: The HFMA National Institute, HFMA released the ñrst report from Phase of the Value Project, which brings together leading health systems to help the healthcare industry make the transition from a system that rewards volume to one that rewards value. The report, Defining and Delivering Value, identifies five key strategies hospitals and health systems should undertake now to deliver greater value: * Do not delay in developing the four value-driving capabilities required to adapt in a new payment environment.

* Embrace strategic agility for your organization.

* Seek stakeholder alignment around a common set of value metrics that are meaningful to their intended end users.

* Explore strategic partnerships and opportunities with payers, employers, and patients.

* Prepare to differentiate the effectiveness of care provided by your organization within a value -driven, competitive marketplace.

In addition, HFMA released a series of Value Project reports throughout the year that show how to develop the core capabilities to drive value: people and culture, business intelligence, performance improvement, and contract and risk management.

HFMA'S MAP ACTIVITIES Several enhancements to HFMA's MAP for Revenue Cycle Excellence were unveiled in FYia.

HFMA released a set of eight MAP Keys to help hospitals manage and improve the financial performance of physician practices. Hospitals, health systems, and physician practices can use the Physician Practice Management Keys and a new physician practice management module to track performance over time and to compare their performance with that of peers. HFMA also is providing, through its MAP App, comparison data about physician practice performance and examples of improvement strategies. The keys were developed, deñned, and prioritized by a task force of industry leaders.

HFMA also introduced a new summary ROI Calculator that shows multiple MAP Keys to help organizations prioritize efforts if resources are limited. Map App subscribers can quantify the dollar opportunity that they could realize by improving their performance in specific metrics.

In another effort to create consistent revenue cycle performance data, HFMA launched the MAP Keys Compliant Program, which helps providers identify IT products that capture data needed to use the industry- standard MAP Key indicators to track, compare, and improve performance.

HFMA also introduced the new MAP Award for Performance Improvement in Revenue Cycle, which recognizes healthcare organizations that demonstrate measurable improvement in a specific MAP Key or set of MAP Keys. Winners show targeted improvement initiatives and share how their results have improved financial performance. Winners are scheduled to be recognized at HFMA's MAP Event in October 201 . This MAP Award is sponsored by Parallon Business Solutions.

PROFESSIONAL DEVELOPMENT In FY12, HFMA continued to provide the industry's best professional development opportunities through seminars, the Leadership Conference on Value, the Virtual Healthcare Finance Conference, webinars, e-learning, on-site programs, the MAP Event, and ANI.

Practical information provided in all of these educational forums addressed topics such as healthcare reform, financial performance improvement, risk management, cost management, revenue cycle, capital strategies and sources, and the changing payment landscape. Satisfaction scores continued at historically high levels, reflecting the abundance of practical tools and case examples found in all of HFMA's educational offerings.

ANI: The HFMA National Institute, held in June 2012 in Las Vegas, was the culmination of educational efforts in FY12. At ANI, attendees learned strategies for collaborating to improve the value of care and how to meet the challenges of the reform era.

In his first address to HFMA members since taking on the leadership role in early June, HFMA President and CEO Joseph Fifer said there has never been a greater opportunity for strategic partnerships that improve value.

"Don't sit back and wait for changes to happen to you. Create the future yourselves," Fifer told attendees.

Keynoters for the conference were: * Carl Lewis, nine-time Olympic gold medalist, sharing strategies on how dedication, determination, and a focus on goals can help in health care * Chesley B. (Sully) Sullenberger III, pilot and best-selling author, explaining how preparation and dedication can provide the foundation for leadership * David Walker, former U.S. Comptroller General, discussing how to promote fiscal responsibility * Kevin and Jackie Freiberg, best-selling authors of Nanovation: How a Little Car Can Teach the World to Think Big, sharing their expertise in leadership and innovation In his address, Walker said the nation must find ways to make health care more appropriate, affordable, and sustainable. Healthcare finance professionals have to be part of the solution, he said. "We have to recapture control of the budget, including health care," Walker said. "You need to be part of the solution, not part of the problem." Sullenberger told attendees that the lessons he learned in leadership helped him guide an airplane to a safe landing on the Hudson River after the plane's engines failed. Those lessons in leadership gave him the strength and presence of mind "to be able to handle, in o8 seconds, an event that we had never anticipated (and to) get it right the first time, never having considered the situation before." The need for healthcare finance professionals to make a difference through leadership that empowers their organizations is critical, SuUenberger told attendees. "Your patients deserve it, your colleagues expect it, and your profession demands it," he said.

INFORMATION HFMA provided members with a wealth of timely and topical information through its website, magazine, reports, and newsletters in FY13.

HFMA launched a mobile app version of its flagship publication, hfm magazine, for iPhones, iPads, and Android devices. Readers can access the magazine by visiting their app store and searching "hfma" to download.

The magazine featured interviews with healthcare industry thought leaders, including George C. Halvorson, chairman and CEO of Kaiser Permanente; David Blumenthal, professor of medicine and professor of healthcare policy at Massachusetts General Hospital/Partners HealthCare System and Harvard Medical School; and Brent C. James, chief quality officer and executive director of the Institute for Health Care Delivery Research at Intermountain Healthcare.

Leadership magazine tells positive stories of collaboration, change, and business and clinical success. Response to Leadership has been overwhelmingly positive, as evidenced by a reader survey that showed 92 percent want to read future issues and 8a percent rate it favorably compared with other publications.

Due to positive reviews from leaders and increased advertiser interest, HFMA expanded Leadership by publishing three issues in FY12 after publishing twice per year in previous years. New columns, departments, a refreshed layout, and more photographs also were introduced.

NETWORKING Networking opportunities are available to members through HFMA's 68 chapters, educational seminars and conferences, and online Forums.

Each of the four Forums is aimed at a specific healthcare financial leader group: senior finance leaders, revenue cycle leaders, managed care/reimbursement leaders, and compliance/legal leaders. There are approximately 6,350 Forum members. In the past year, the Forums launched their first virtual networking event and plan to host additional virtual events in the future.

RECOGNITION HFMA's members and chapters are dedicated each day to improving healthcare finance for their organizations, communities, and profession. At ANI in June 3012, HFMA recognized many of these individuals and chapters in an expression of gratitude for their dedication over the years, and in FY12, in particular.

BOARD OF DIRECTORS AWARD HFMA's Board of Directors honored Richard L. Clarke, DHA, FHFMA, the Association's longtime president and CEO, with a Board of Directors Award for outstanding contributions to health carean award for which he traditionally helped select the recipient. Clarke, who served in the top post since 1986, received the award during ANI: The HFMANational Institute, June 2012, in Las Vegas.

HFMA has renamed the award in honor of Clarke's contributions to the Association; it will now be known as the Richard L. Clarke Board of Directors Award.

"This award focuses on me, but those who know me, know that I know it's not about me," Clarke said. "There are literally thousands of dedicated volunteers all over the country working on HFMA's behalf at all levels every day." INDIVIDUAL ACHIEVEMENT AWARD HFMA awarded the 2012 Frederick C. Morgan Achievement Award- the Association's highest individual honor- to Neil Koonce of the Tennessee Chapter.

The Morgan award recognizes an individual member who has made a significant contribution to the Association as a result of substantial volunteer activity over the course of a career.

Koonce, president of Healthcare Receivables Group, Inc., Knoxville, Tenn., is the 54th recipient of this prestigious award. An HFMA member for more than 20 years, Koonce is a recipient of HFMA's Follmer Bronze, the Reeves Silver, and Muncie Gold Founders Merit awards. Koonce co -chaired the first Tennessee Chapter Leadership Training Conference and became chapter president in 1998-99.

"Neil Koonce's involvement in HFMA is characterized by his desire to serve," said Lynn Miller, president of HFMA's Tennessee Chapter, who was one of several people to nominate Koonce for the award. "That desire to serve is deeply ingrained in his character, along with humility and a deep, genuine caring for people." MAP AWARD FOR HIGH PERFORMANCE IN REVENUE CYCLE HFMA recognizes high performance in revenue cycle with the MAP Award for Revenue Cycle Excellence. The MAP Award winners for 2012 are: * Shelby Baptist Medical Center, Birmingham, Ala.

* The Valley Hospital, Ridgewood, N.J.

* MultiCare Mary Bridge Children's Hospital, Tacoma, Wash.

* Cape Cod Healthcare, Hyannis, Mass.

* John C. Lincoln Deer Valley Hospital, Phoenix * Riverside Methodist Hospital, Columbus, Ohio * Geisinger Health System, Danville, Pa.

* Centra Lynchburg General Hospital, Lynchburg, Va.

* Legacy Good Samaritan Medical Center, Portland, Ore.

* New York Presbyterian Hospital, New York * Spectrum Health Kelsey Hospital, Lakeview, Mich.

* Six hospitals from Baylor Health Care System: -Baylor Medical Center at Irving, Irving, Texas -Baylor All Saints Medical Center at Fort Worth, Fort Worth, Texas -Baylor Jack & Jane Hamilton Heart & Vascular Hospital, Dallas -Baylor Medical Center at Waxahachie, Waxahachie, Texas -Baylor Regional Medical Center at Grapevine, Grapevine, Texas -Baylor Regional Medical Center at Plano, Piano, Texas The MAP Award for High Performance in Revenue Cycle is sponsored by Optum.

BEST ARTICLE AWARDS Each year, HFMA recognizes hfm magazine authors who have demonstrated outstanding editorial achievement with the Helen Yerger/L. Vann Seawell Best Article Award. For FY12, the winners were: "Hospital Revenues in Critical Condition," September 3011, Lisa Goldstein, senior vice president, Moody's Investors Service, New York, and a member of HFMA's Metropolitan New York Chapter.

"Value-Based Purchasing: A Preview of Quality Scoring and Incentive Payments," January 2013, Ed Klein, director of information sciences, American Hospital Directory, Louisville, Ky., and Paul Shoemaker, president, American Hospital Directory, Louisville, Ky., and a member of HFMA's Kentucky Chapter.

"Do EHR Investments Lead to Lower Staffing Levels " February 2013, Jeffrey Helton, PhD, FHFMA, CMA, CFE, assistant professor, Jim Langabeer, PhD, CMA, associate professor, Jami DelliFraine, PhD, assistant professor, and Chiehwen (Ed) Hsu, PhD, associate professor, University of Texas School of Public Health, Houston.

CHAPTER AWARDS HFMA's chapters dedicate their energy and skill to providing their members with education, networking, and support. HFMA's chapter awards recognize this dedication.

Robert M. Shelton Award for Sustained Excellence HFMA's Colorado Chapter captured the Association's top award for chapters, the Robert M. Shelton Award, based on five consecutive years of extraordinary performance. In 3011-12 alone, the Colorado Chapter demonstrated consistent success by earning the following awards: * One C. Henry Hottum Award for educational performance improvement * One silver award for education * One silver award for certification excellence * One gold award for membership growth and retention * Two Helen M. Yerger special recognition awards for collaboration and education The Colorado Chapter, which has 679 members, has provided exemplary service in the areas of membership satisfaction; breadth and depth of education hours, including registrant hours per member and education growth; and membership retention and growth.

The Colorado Chapter has developed a long-term strategy to be a top performer- and its members have certainly demonstrated exemplary leadership in achieving these results.

AWARD OF EXCELLENCE FOR IMPROVED CHAPTER PERFORMANCE HFMA's Idaho Chapter captured the new Award of Excellence for Improved Chapter Performance, which recognizes chapters that achieve at least a 40-point increase in their Chapter Balanced Scorecard total score in one year. The Idaho Chapter increased its total Chapter Balanced Scorecard by 50 points in the past year, for a perfect score of 100.

When the Idaho Chapter became aware of its balanced scorecard performance last year, the chapter built an improvement plan to improve scores. For example, the Idaho Chapter ran a "get-a-member" initiative in which members could receive a free educational program by successfully encouraging other professionals to join the organization.

The Idaho Chapter also put increased emphasis on its membership survey, reminding chapter members about the need to provide detailed feedback so that the chapter could make improvements that would best meet members' needs.

C. Henry Hottum Awards (or Educational Performance Improvement Based on their efforts in FY12, 3o chapters were named recipients of the C. Henry Hottum Awards for Educational Performance Improvement: Arizona Chapter Colorado Chapter Connecticut Chapter First Illinois Chapter Georgia Chapter Greater St. Louis Chapter Hudson Valley NY Chapter Indiana Pressler Memorial Chapter Kentucky Chapter Maine Chapter Maryland Chapter Massachusetts -Rhode Island Metropolitan New York Chapter Metropolitan Philadelphia Chapter Minnesota Chapter New Jersey Chapter North Carolina Chapter Northeastern New York Chapter Northern California Chapter Northwest Ohio Chapter Oregon Chapter Rochester Regional Chapter Show-Me of Missouri Chapter South Dakota Chapter Southern California Chapter Texas Gulf Coast Chapter Utah Chapter West Virginia Chapter Western Michigan Chapter Western Pennsylvania Chapter Awards of Excellence for Education The Awards of Excellence for Education recognize chapters that have achieved outstanding performance in educational programming. Like the other Awards of Excellence, these awards are presented in three tiers.

Charles F. Mehler Gold Awards of Excellence for Education Arkansas Chapter Central Pennsylvania Chapter Hawaii Chapter Hudson Valley NY Chapter Iowa Chapter Montana Chapter Nebraska Chapter North Carolina Chapter North Dakota Chapter Puerto Rico Chapter South Dakota Chapter Sunflower (Kansas) Chapter West Virginia Chapter Wyoming Chapter John M. Stagi Silver Awards of Excellence for Education Alabama Chapter Colorado Chapter Eastern Michigan Chapter Rorida Chapter Georgia Chapter Idaho Chapter Kentucky Chapter Louisiana Chapter Maine Chapter Maryland Chapter Metropolitan New York Chapter Mississippi Chapter Nevada Chapter New Jersey Chapter Oklahoma Chapter Oregon Chapter Rochester Regional Chapter San Diego -Imperial Chapter South Carolina Chapter South Texas Chapter Tennessee Chapter Texas Gulf Coast Chapter Western New York Chapter Sister Mary Gerald Bronze Awards of Excellence for Education Arizona Chapter Central Ohio Chapter Connecticut Chapter Greater St. Louis Chapter Minnesota Chapter Northern California Chapter Northwest Ohio Chapter Show-Me of Missouri Chapter Washington-Alaska Chapter Western Michigan Chapter Western Pennsylvania Chapter Awards of Excellence for Membership Growth and Retention The Awards of Excellence for Membership Growth and Retention recognize chapters that have achieved outstanding performance in the growth of membership. The awards are presented in three tiers.

Gold awards Arkansas Chapter Central New York Chapter Central Pennsylvania Chapter Colorado Chapter Connecticut Chapter First Illinois Chapter Fionda Chapter Great Lakes Chapter Greater St. Louis Chapter Idaho Chapter Maryland Chapter Minnesota Chapter Nevada Chapter New Jersey Chapter North Dakota Chapter Northwest Ohio Chapter Puerto Rico Chapter San Diego-Imperial Chapter South Dakota Chapter Southwestern Ohio Chapter Sunflower (Kansas) Chapter Western Michigan Chapter Western New York Chapter Wyoming Chapter Silver awards Central Ohio Chapter Iowa Chapter Kentucky Chapter Louisiana Chapter Maine Chapter Massachusetts-Rhode Island Chapter Metropolitan New York Chapter North Carolina Chapter Northeastern New York Chapter Tennessee Chapter West Virginia Chapter Bronze awards Arizona Chapter Eastern Michigan Chapter Georgia Chapter Hudson Valley NY Chapter Indiana Pressler Memorial Chapter Metropolitan Philadelphia Chapter Northern California Chapter Oklahoma Chapter Oregon Chapter South Carolina Chapter Awards of Excellence for Certification The Awards of Excellence for Certification recognize chapters that have achieved outstanding performance in certification support. These awards are also presented in three tiers.

Gold awards Arkansas Chapter Eastern Michigan Chapter Iowa Chapter Metropolitan Philadelphia Chapter Minnesota Chapter Oregon Chapter Western Pennsylvania Chapter Wisconsin Chapter Silver awards Central Ohio Chapter Colorado Chapter Connecticut Chapter First Minois Chapter Hawaii Chapter Southern California Chapter Southern Illinois Chapter Virginia - Washington DC Chapter Bronze awards Arizona Chapter Central Pennsylvania Chapter Georgia Chapter Great Lakes Chapter Indiana Pressler Memorial Chapter Kentucky Chapter Lone Star Chapter New Mexico Chapter North Dakota Chapter Northeast Ohio Chapter Puerto Rico Chapter Southwestern Ohio Chapter Washington-Alaska Chapter Western Michigan Chapter Special Recognition Awards The Helen M. Yerger Special Recognition Awards recognize chapters that demonstrated outstanding effort and excellence in programs, services, and administration over the fiscal year. Chapters receiving the awards for FYi , and their projects, are as follows: Alabama Chapter, Florida Chapter, Georgia Chapter, South Carolina Chapter, Tennessee Chapter for Region 5 3013 Dixie Institute; Education Arkansas Chapter, Lone Star Chapter, Louisiana Chapter, Mississippi Chapter, Oklahoma Chapter, South Texas Chapter, Texas Gulf Coast Chapter for Improving CPE Value of the Annual Region a. Conference for HFMA Members; Member Service Arkansas Chapter, Mississippi Chapter, Tennessee Chapter for TriState Winter Institute 3013; Education Central New York Chapter, Hudson Valley NY Chapter, Metropolitan New York Chapter, Northeastern New York Chapter, Puerto Rico Chapter, Rochester Regional Chapter, Western New York Chapter for Region 3 Multi-Chapter Conference Event; Education Central Ohio Chapter, Eastern Michigan Chapter, Great Lakes Chapter, Northeast Ohio Chapter, Northwest Ohio Chapter, Southwestern Ohio Chapter, Western Michigan Chapter for Region 6 Multi-Chapter Webinar Educational Series; Collaboration Central Ohio Chapter, Indiana Pressler Memorial Chapter, Kentucky Chapter, Southwestern Ohio Chapter for Tri State Conference; Improvement Eastern Michigan Chapter, Great Lakes Chapter, Western Michigan Chapter for Michigan 58th Annual Fall Conference; Education First Illinois Chapter, Greater St. Louis Chapter, Heart of America Chapter, Indiana Pressler Memorial Chapter, McMahon-Illini Chapter, Show- Me of Missouri Chapter, Southern Illinois Chapter, Wisconsin Chapter for Taking Education to the Members; Innovation Great Lakes Chapter, Western Michigan Chapter for CFO Panel at Spring Conference 30) 7 ; Improvement Greater St. Louis Chapter, Heart of America Chapter, Iowa Chapter, Minnesota Chapter, Nebraska Chapter, North Dakota Chapter, Show- Me of Missouri Chapter, South Dakota Chapter, Sunflower (Kansas) Chapter for HFMA Region 8 Regional Executive Selection Process; Improvement Hawaii Chapter, Nevada Chapter, Northern California Chapter, Oregon Chapter, San Diego -Imperial Chapter, Southern California Chapter, Washington-Alaska Chapter for The mh Annual Region 1 1 Healthcare Symposium; Education Iowa Chapter, Nebraska Chapter, South Dakota Chapter for Innovation in Anticipation of Healthcare Reform; Education Northern California Chapter, Oregon Chapter for Northern California/Oregon Certification Practicum; Member Service Northern California Chapter, Southern California Chapter for California Chapters Fall Conference 2010; Education San Diego -Imperial Chapter, Southern California Chapter for 307 7 California Fall Conference; Education Individual chapter recipients were Alabama Chapter Arizona Chapter (3) Arkansas Chapter (3) Central Ohio Chapter (4) Central Pennsylvania Chapter Colorado Chapter (2) Connecticut Chapter (3) Eastern Michigan Chapter (2) First Illinois Chapter (3) Florida Chapter (3) Georgia Chapter Greater St. Louis Chapter (3) Heart of America Chapter Hudson Valley NY Chapter (4) Iowa Chapter (2) Kentucky Chapter (3) Lone Star Chapter Maine Chapter Maryland Chapter (3) Metropolitan New York Chapter (2) Metropolitan Philadelphia Chapter Minnesota Chapter Nebraska Chapter (2) Nevada Chapter (3) New Hampshire -Vermont Chapter New Jersey Chapter (3) North Carolina Chapter (2) North Dakota Chapter Northeast Ohio Chapter (2) Northern California Chapter (3) Oregon Chapter Rochester Regional Chapter (2) San Diego -Imperial Chapter (2) Show-Me of Missouri Chapter South Carolina Chapter South Dakota Chapter Southern California Chapter (4) Sunflower (Kansas) Chapter Tennessee Chapter (2) Texas Gulf Coast Chapter (3) Western New York Chapter (2) Western Pennsylvania Chapter Wisconsin Chapter June 24, 2012 The management of Healthcare Financial Management Association (HFMA) is responsible for the integrity and objectivity of the financial statements of HFMA and all of its affiliates. The annual financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, and include amounts that are based on our best judgments with due consideration given to materiality.

Management is responsible for establishing and maintaining a system of internal controls over financial reporting and safeguarding assets against unauthorized acquisition, use, or disposition. This system is designed to provide reasonable assurance as to the integrity and reliability of financial reporting and safeguarding of assets. The concept of reasonable assurance is based on the recognition that there are inherent limitations in all systems of internal controls, and that the cost of such systems should not exceed the benefits to be derived from them.

Management believes that the foundation of an appropriate system of internal controls is a strong ethical company culture and climate. It has always been the policy and practice of HFMA to conduct its affairs in a highly ethical manner. This responsibility is characterized and reflected in HFMA's Code of Ethics, which is distributed throughout HFMA and its affiliates.

The Audit and Finance Committee of the Board of Directors, which is composed of seven directors, six of whom are independent directors who are not employees, meets periodically with management and the independent auditors to review the manner in which these groups are performing their responsibilities and to carry out the Audit and Finance Committee's oversight role with respect to auditing, internal controls, and financial reporting matters. The independent auditors periodically meet privately with the Audit and Finance Committee and have access to its individual members.

HFMA engaged McGladrey, LLP, independent auditors, to audit its financial statements in accordance with auditing standards generally accepted in the United States of America. Their report follows.

Joseph J. Fifer, FHFMA, CPA President and CEO, HFMA Edwin P. Czopek, FHFMA, CPA Senior Vice President Three Westbrook Corporate Center, Suite 600 Westchester, Illinois 60154-5732 tel 708.531.9600 · fax 708.531.0032 web: hfma.org NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature ol Organization and Significant Accounting Policies Healthcare Financial Management Association (HFMA) is an association of healthcare financial management professionals with approximately 39,500 members. HFMA's operations include membership activities, publications, meetings and conventions. Operating support is derived primarily from membership dues, publications and meetings. HFMA is affiliated with Healthcare Financial Management Association Educational Foundation (the Foundation), a not-for-profit entity, through common membership of their respective Boards of Directors and shared senior management. The Foundation provides cost-effective and accessible ways for healthcare financial management professionals to increase their professional knowledge through education programs. Support for the Foundation is derived primarily from the Annual National Institute (ANI) Convention, educational revenue other than ANI revenue, and investment income. HFMA Learning Solutions, Inc. (LSI), a wholly owned subsidiary of HFMA, is a for-profit corporation, which provides information and training on healthcare issues.

A summary of significant accounting policies follows.

Basis of presentation: The consolidated financial statements have been prepared in conformity with accounting principles applicable to nonprofit organizations.

Principles of consolidation: The consolidated financial statements include the accounts and operations of HFMA, the Foundation, and LSI (collectively, the Association). Intercompany accounts and transactions are eliminated in consolidation.

Accounting policies: The Association follows accounting standards established by the Financial Accounting Standards Board (FASB) to ensure consistent reporting of financial position, results of activities, and cash flows. References to generally accepted accounting principles in these disclosures are to the FASB Accounting Standards Codification(TM), sometimes referred to as the Codification or ASC.

Use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimates significant to the consolidated financial statements include the allowance for doubtful accounts and the fair value of investments.

Cash and cash equivalents: Cash equivalents include highly liquid investments with an original maturity of three months or less when purchased. The Association has not experienced any losses in such accounts and management believes the Association is not exposed to any significant credit risk related to cash.

Accounts receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a periodic basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Investments: Investments held by the Association are stated at fair value based on quoted market prices.

Fixed assets: Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable furniture, equipment and leasehold improvements. Capitalized software costs are amortized on a straight-line basis over a three-year useful life.

Leasehold improvements are stated at cost. Amortization is computed on the straight-line method over the shorter of the useful life of the improvement or the term of the lease.

Software development costs incurred subsequent to the determination of technological feasibility and marketability of a software product are capitalized. Capitalization of costs ceases and amortization of capitalized software development costs commences when the products are available for general release. Software development costs of $35,000 and $792,805 were capitalized during the years ended May 31, 2012 and 2011, respectively.

Expenditures for maintenance and repairs are charged directly to expense; renewals and betterments which significantly extend the useful lives are capitalized. Costs and accumulated depreciation and amortization on retired or assets disposed of are removed from the accounts and the resulting gain or loss, if any, is reflected in the consolidated statements of activities.

Revenue: Membership dues and related rebates to chapters are recognized ratably over the fiscal year to which they apply. Publication revenue is recognized as revenue when publications are shipped. Fees for educational programs are recognized as revenue when the programs are conducted. ANI Convention fees are recognized as revenue when the related convention is conducted. Sponsorship revenue is recognized in accordance with the related contract. MAP App licensing fee revenue is recognized in accordance with the related contract. MAP App implementation fee revenue is recognized after the implementation is complete. Funds received in advance of services provided or events held are deferred.

Chapter-restricted funds: Chapter-restricted funds represent amounts held by the Foundation designated to be used for certain local HFMA chapters. Interest income on these funds amounted to $57 and $61 for the years ended May 31, 2012 and 2011, respectively.

Income laxes: HFMA is exempt from federal income taxes under Section 501(c)(6) of the Internal Revenue Code, and the Foundation is exempt under Section 501(c)(3) of the Internal Revenue Code. HFMA is subject to taxes on unrelated business income, which is generally HFMA's advertising revenue. HFMA had approximately $6,358,000 and $6,106,000 in gross advertising revenues for the years ended May 31, 2012 and 2011, respectively. Income tax expense associated with unrelated business income amounted to approximately $558,000 and $407,000 for the years ended May 31, 2012 and 2011, respectively, and is included in other expense.

LSI has a net operating loss (NOL) carryforward of approximately $2,024,418 at May 31, 2012. The NOL will begin to expire in 2020 if not previously utilized. No deferred tax asset has been recognized, as management has established a full valuation allowance at May 31, 2012.

The accounting standard on Accounting for Uncertainty in Income Taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Association may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Examples of tax positions include the tax-exempt status of the Association and various positions related to the potential sources of unrelated business taxable income (UBTI). There were no unrecognized tax benefits identified or recorded as liabilities during the years ended May 31, 2012 or 2011.

HFMA and the Foundation file Forms 990 in the U.S. federal jurisdiction and the Foundation does so in the State of Illinois. With few exceptions, HFMA and the Foundation are no longer subject to examination by the Internal Revenue Service for fiscal years ended before May 31, 2009.

LSI files a tax return in all appropriate jurisdictions, which includes a federal and an Illinois tax return. LSI is no longer subject to U.S. federal or state income tax examinations by tax authorities for fiscal years ended before May 31, 2009.

Marketing costs: HFMA expenses the production costs of marketing the general benefits of belonging to HFMA, or purchase products other than educational events, the first time it takes place. Marketing expenses incurred to promote attendance at specific educational events, which include program content and registration materials, are considered direct-response marketing and are deferred until the date that the educational events take place. As of May 31, 2012 and 2011, deferred marketing expenses totaled approximately $253,000 and $227,000, respectively, and are included in convention and meeting deposits on the consolidated statements of financial position.

Subsequent events: HFMA has evaluated subsequent events for potential recognition and/or disclosure through June 24, 2012, the date these financial statements were available to be issued.

Note 2. Investments The composition of investment assets held by the Association is summarized as follows at May 31: Net investment income is summarized as follows for the years ended May 31, 2012 and 2011: The Association invests in equity, fixed income, convertible securities, and absolute return funds. These investments are exposed to various risks, such as interest rate, market and credit risks. Because of these risks, it is possible that changes in the fair value of investments may occur and that such changes could materially affect the Association's financial statements.

Note 3. Investments Held (or Deferred Compensation At May 31, investments held for deferred compensation consist of the following: This deferred compensation plan, established under IRC Section 457, is funded entirely by employees or former employees of HFMA. HFMA accounts for these employee contributions as investments held for deferred compensation with the related liability recorded as a deferred compensation liability.

Note 4. Fair Value Disclosures Fair Value Measurements The Fair Value Measurements and Disclosures Topic of the Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Topic enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

For the fiscal years ended May 31, 2012 and 2011, the application of valuation techniques applied to similar assets and liabilities has been consistent. In determining the appropriate levels, the Association performs a detailed analysis of the assets and liabilities that are subject to the Topic. Investments are the only assets or liabilities that are measured at fair value on a recurring basis.

The Association assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Association's accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. For the years ended May 31, 2012 and 2011, there were no such transfers.

Fair Value - Association Investments The Association's investments, as described in Note 2, are traded on national securities exchanges and are stated at the last reported sales price on the day of valuation. The following tables present the fair value hierarchy for the Association's investments as of May 31, 2012 and 2011: Fair Value - Investments Held for Deferred Compensation The investments held for deferred compensation, as described in Note 3, are valued as follows: Investments in the money market funds are traded on national securities exchanges and are stated at the last reported sales price on the day of valuation.

Investments in the equity and fixed income mutual funds reflected as Level 1 are funds which are traded on national securities exchanges and are stated at the last reported sales price on the day of valuation.

Investments in the equity and fixed income mutual funds reflected as Level 2 are funds which are valued at fair value based on the applicable percentage ownership of the underlying companies' net assets as of the measurement date, as determined by the Fund Manager. In determining fair value, the Fund Manager utilizes valuations provided by the underlying investment companies. The underlying investment companies value securities and other financial instruments on a fair value basis of accounting. The fair value of the Association's investments in private investment companies generally represents the amount the Association would expect to receive if it were to liquidate its investment in the companies excluding any redemption charges that may apply.

The following tables present the Association's fair value hierarchy for the investments held for deferred compensation as of May 31, 2012 and 2011: Fair Value of Financial Instruments The carrying amount of financial instruments, including cash, cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates fair value due to the short maturity of these instruments.

Note 5. Fixed Assets Details of fixed assets at May 31, 2012 and 2011, are as follows: Amortization expense of capitalized software totaled $156,591 and $54,513 for the years ended May 31, 2012 and 2011, respectively. The unamortized balance of capitalized software totaled $616,701 and $558,292 at May 31, 2012 and 2011, respectively. Research and development costs incurred for a computer software product to be sold totaled approximately $0 and $1,452,000 for the years ended May 31, 2012 and 2011, respectively.

Note 6. Lease Commitment The Association leases office space in Westchester, Illinois under an operating agreement which includes certain escalation clauses. In February 2011, the Association amended the operating agreement for office space in Westchester, Illinois to extend the lease term through July 2022. The new agreement included reduced rent payments from February 1, 2011 to July 31, 2011 as well as full abatement of rent payments for the period from August 1, 2011 to July 31, 2012, which amounts to $586,789. The effects of rent abatements and of base rent escalation provisions are being recognized on a straight-line basis over the term of the lease and give rise to the deferred lease obligation included in the consolidated statements of financial position.

Future minimum lease payments under the noncancelable operating lease are as follows: Note 7. Functional Expenses The following table sets forth expenses, including taxes, incurred by function of the Association for the years ended May 31, 2012 and 2011: Note 8. Employee Pension Plan HFMA sponsors a defined contribution pension plan which covers substantially all HFMA employees who complete one year of employment. Contributions are based upon a percentage of participants' earnings, less forfeitures. HFMA's contributions for the years ended May 31, 2012 and 2011 were $501,717 and $503,431, respectively.

Note 9. Chapters of HFMA (Unaudited) Chapters of HFMA may be established by charter subject to the approval of the Board of Directors of HFMA, pursuant to the provisions of the bylaws and regulations governing membership, organization, procedures and financial relations with HFMA. Should a chapter cease to function or its charter be revoked by HFMA, all funds and records held by the chapter become the property of HFMA. The financial position and the operations of these chapters are not included in the Association's consolidated financial statements.

The most recent summary financial data of the chapters is as follows: Independent Auditor's Report To the Board of Directors Healthcare Financial Management Association and Affiliates Westchester, Illinois We have audited the accompanying consolidated statements of financial position of Healthcare Financial Management Association and Affiliates (the Association) as of May 31, 2012 and 2011, and the related consolidated statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Healthcare Financial Management Association and Affiliates as of May 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

MCGladry LLP Chicago, Illinois June 24, 2012 (c) 2012 Healthcare Financial Management Association

[ Back To TMCnet.com's Homepage ]





LATEST VIDEOS

DOWNLOAD CENTER

UPCOMING WEBINARS

MOST POPULAR STORIES





Technology Marketing Corporation

800 Connecticut Ave, 1st Floor East, Norwalk, CT 06854 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2014 Technology Marketing Corporation. All rights reserved.