Home Care Admins. Is it time to Fire your Accountant?

First, let me clarify a point. Bookkeeping and accounting are different.  A bookkeeper tallies your invoices and bills.  A bookkeeper presents this information to you so you may take action (e.g., pay a bill, call a delinquent client).  Bookkeepers even  prepare your agency’s financial information for your tax advisor.  An accountant is different – shouldbe different.  An accountant should be your agency financial advisor.  An accountant should provide feedback on your agency’s practices to determine whether or not you are making sound financial decisions.  The healthcare industry requires an accountant to have specific skillsets and industry insight.  Listed below are key differences between general accountants and healthcare accountants. Does your current accountant provide these services?

Key Differences in Revenue and Billing

• Multiple Payers: General accountants handle direct customer invoices or simple client billing. Healthcare accountants manage complex payer mixes, tracking revenue streams across Medicare, Medicaid, private insurance companies, and patient out-of-pocket payments. 

• Reimbursement Lag: General accountants track revenue with the time of an invoice. Healthcare revenue tracking requires handling delayed insurance reimbursements, claim rejections, and contractual adjustments between the billed amount and the allowed amount. 

• Accrual Focus: Healthcare accountants rely heavily on accrual accounting to match earned revenue with the period the medical service was actually provided, even if payment arrives months later.  Revenue is tied to CPT and HCPCS codes.  Payments depend on authorization rules, contracted rates, and documentation accuracy.

Regulatory and Compliance Focus

• Strict Privacy Laws: Unlike general businesses bound by standard commercial privacy rules, healthcare accountants must maintain strict compliance with the Health Insurance Portability and Accountability Act because they frequently view protected patient health and billing data. 

• Healthcare Regulations: Healthcare accountants navigate industry-specific regulations like the Stark Law and specialized federal or state healthcare program compliance that general accountants rarely encounter. 

Specialized Operational Tracking

• Payroll Allocation: Healthcare accountants separate clinical payroll (treated as Cost of Goods Sold) from administrative payroll (operating expenses) to give practice owners an accurate look at gross profit margins.

• Service Line Profitability: Instead of looking at profit only at the overall agency level, healthcare accountants analyze financial performance by specific medical service lines, clinician productivity, and operating margins per location.