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Health Budgets Financial Policy Financial Statements Accounting Data TMA Office of the Chief Financial Officer OCFO Managemen

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Health Budgets Financial Policy Financial Statements Accounting Data TMA Office of the Chief Financial Officer OCFO Managemen Powered By Docstoc
					Health Budgets &
 Financial Policy




                    Financial Statements &
                       Accounting Data

     TMA Office of the Chief Financial Officer (OCFO)
     Management Control & Financial Studies Division
                         Outline
Health Budgets &
 Financial Policy


   •     Financial Statement Reporting Requirement
   •     Legacy Accounting Systems
   •     Medical Accounts Receivable (A/R)
   •     Managed Care Forecasting & Analysis System
         (MCFAS)




                                                      2
                    Fiscal Management Requirements
Health Budgets &
 Financial Policy


    • CFO Act of 1990: Integrated Financial Management
      (FM) systems supporting DoD accounting needs are key
      to effective financial management
    • Federal Financial Management Improvement Act
      (FFMIA) of 1996: All Federal agencies to comply
       – Implement/maintain systems that meet Federal FM
         system requirements (Joint Financial Management
         Improvement Program (JFMIP))
       – Support Federal accounting standards (Federal
         Accounting Standards Advisory Board (FASAB))
       – Apply US Standard General Ledger (USSGL) at the
         transaction level
                                                         3
                             Financial Statements
Health Budgets &
                    MHS Financial Statement Reporting
 Financial Policy
                    Entities (FSREs)
                                                                       MHS
                        MERHCF 1                                      DHP     3                             MILCON 3
                                      TRICARE Mgmt.                                       Service Medical
                                       Activity (TMA)                                      Activity (SMA)


                                                                             SMA – Army       SMA – Navy      SMA – Air Force
                     TMA - FOD         TMA – CRM 1       TMA-USUHS 2         (MEDCOM) 4       (BUMED) 4          (AFMS) 4
                                                                              (USACE) 5       (NAVFAC) 5        (USAFE) 5

                                                        MERHCF: Medicare-Eligible Retiree Health
                                                        Care Fund
                                                        DHP: Defense Health Program Appropriation
          (1) Under Audit                               MILCON: Military Construction Appropriation
          (2) All Proprietary Statements Validation     FOD: Financial Operations Division
          Through Examination In Process                CRM: Contract Resource Management
          (3) Includes American Recovery and            USUHS: Uniformed Services University
           Reinvestment Act (ARRA) Funding              MEDCOM: Army Medical Command
          (4) Executes DHP Funds                        BUMED: Navy Bureau of Medicine and Surgery
          (5) Executes MILCON Funds                     AFMS: Air Force Medical Service
                                                        USACE: U.S. Army Corps of Engineers
                                                        NAVFAC: Naval Facilities Engineering
                                                        Command
                                                        USAFE: U.S. Air Forces in Europe                                        4
                             Accounting Data
Health Budgets &
 Financial Policy




FSRE                Legacy   Enterprise Business Command
                                        Rules    Control
TMA                 WAAS     DAI        TMA         TMA
USUHS               CUFS     DAI        USUHS       USUHS
Army                STANFINS GFEBS      Army        Army
Navy                STARS-FL Navy ERP   Navy        Navy
Air Force GAFS-R             DEAMS      Air Force   Air Force


                                                            5
                    Accounting System Acronyms
Health Budgets &
 Financial Policy



   CUFS – College and University Financial System
   DAI – Defense Agency Initiative
   DEAMS – Defense Enterprise Accounting and Management System
   FSRE – Financial Statement Reporting Entities
   GAFS-R – General Accounting Financial System - Revised
   GFEBS – General Fund Enterprise Business System
   STANFINS – Standard Army Finance Information System
   STARS-FL – Standard Accounting and Reporting System - Field Level
   TMA – TRICARE Management Activity
   USUHS – Uniformed Services University of the Health Sciences
   WAAS – Washington Headquarters Services (WHS) Allotment
        Accounting System
                                                                   6
                    Fiscal Management Requirements
Health Budgets &
 Financial Policy


          • Office of Management & Budget (OMB)
             – Use commercial off-the-shelf (COTS) JFMIP-
               certified software for replacement of core FM
               systems (OMB Circular A-127)
          • New Service FM COTS are JFMIP-certified
             – Army – General Fund Enterprise Business System
               (GFEBS)
                 • SAP COTS
             – Navy – Navy Enterprise Resource Planning (ERP)
                 • Oracle COTS
             – Air Force – Defense Enterprise Accounting and
               Management System (DEAMS)
                 • Oracle COTS                                7
                     What is SFIS?
Health Budgets &
 Financial Policy



• Standard Financial Information Structure (SFIS)
  – A comprehensive, standard “business language”
    that defines financial information that supports all
    DoD-wide budget, cost/performance management,
    and external reporting requirements
  – SFIS is NOT an IT system
  – http://www.defenselink.mil/dbt/sfis_resources.html



                                                     8
                    Financial Statements
Health Budgets &
 Financial Policy


  • FSRE Structure Challenges
     – TMA clear chain of command and
       organizational structure
     – MERHCF actuarial and accounting information
     – SMA components have two lines of authority
       (command and control, and finance business
       rules) vs dollar flow. Face issues related to
       MILDEP priorities vs fund flow priorities:
       financial impact, accounting system, financial
       business rules


                                                    9
                    Financial Statements
Health Budgets &
 Financial Policy


  • FSRE Structure Challenges (continued)
     – Solution: single accounting system with
       common business rules and chain of command
       simplifies, streamlines the financial statement,
       financial reporting, financial performance
       reporting




                                                    10
                    Financial Metrics
Health Budgets &
 Financial Policy



  • Monthly Reporting, History and Measures
     – Accounts Receivable (A/R) Public debt > 30 days at
       Sep 30, 2009 (Red Metric)
        • SMA-Army ($22.5 million)
     – A/R Intragovernmental Debt > 30 days at
       Sep 30, 2009 (Red Metric)
        • SMA-Army ($17.7 million)
        • SMA Navy ($17.3 million)
  • SMA A/R increased dramatically in 1st Qtr FY 2010 when
    recording begins


                                                         11
                          Financial Metrics
Health Budgets &
 Financial Policy



   •         Obligation Rates (9/30/2009) (Millions)
           – Procurement Fundings (3 year life)
                          FY 2009   FY 2008       FY 2007
                    SMA   $ 95.2    $197.5        $307.7
                          (57.6%)   (78.5%)       (99.9%)
                    TMA   $ 78.9    $125.8        $199.8
                          (40.2%)   (58.6%)       (100.0%)


                                                             12
                          Financial Metrics
Health Budgets &
 Financial Policy


           – Research, Development, Test and Evaluation
             (RDT&E) Fundings (2 year life)

                            FY 2009   FY 2008
                    SMA     $130.4    $735.8
                            (14.0%)   (99.9%)
                    TMA     $ 78.8    $250.7
                            (42.5%)   (99.7%)


                                                      13
                                   DoD References
Health Budgets &
 Financial Policy




        • DoD Financial Management Regulation
          (FMR), Volume 4, Chapter 3, “Receivables”
          dated November 2009
        • DoD Financial Management Regulation
          (FMR), Volume 6B, Chapter 10, “Notes to
          Financial Statements” dated September 2008
        • Located at OSD (Comptroller) Web site:
                    – http://www.defenselink.mil/comptroller/fmr/

                                                                    14
                      Accounts Receivable (A/R)
Health Budgets &
 Financial Policy

         • Two types of A/R in governmental accounting
            – Intra-governmental (e.g., Coast Guard, VA)
               • Expect to get paid 100% of Billed Amount
               • Disputes regarding claims against other federal
                 agencies (e.g., Coast Guard, VA) are to be
                 resolved per Code of Federal Regulations
                 4 CFR 101
            – Public (civilian emergencies, TPC)
               • Need to establish an allowance for bad debt
         • MTFs may be reporting collections to higher
           headquarters but what data is reported regarding
           outstanding and aged (e.g., >30 days, >120 days)
           Medical A/R?
                                                               15
                    Third Party Collections
Health Budgets &
 Financial Policy


    • Total Third Party Collections (TPC) Billings were
      in FY 2009 were $496.0 million
    • Total TPC Collections in FY 2009 were
      $240.7 million
    • How much is really being written off as
      uncollectible, and how much is still on the books
      as Medical A/R?



                                                     16
                    Medical Services Account (MSA)
Health Budgets &
 Financial Policy



   • Combination of both Intra-governmental A/R
     (e.g., Coast Guard, VA) and Public A/R (e.g.,
     civilian emergencies)
   • Total MSA amount collected TMA-wide in FY
     2009 was $151 million




                                                     17
                    Medical Affirmative Claims (MAC)
Health Budgets &
 Financial Policy


   • Medical Affirmative Claims (MAC) A/R is all
     Public A/R (e.g., insurance companies, liable
     individuals)
   • Total amount collected for medical care provided
     in MTFs for FY 2009 was $15 million




                                                       18
                    Doubtful Accounts & Write-offs
Health Budgets &
 Financial Policy


        • FMR guidance states:
        • The accounting office shall establish an
          allowance for doubtful debt, which shall
          provide for reducing gross receivables by the
          amount of the estimated loss to their net
          realizable value
        • A write-off occurs when an agency official
          determines, after using all appropriate
          collection tools, that is it more than 50% likely
          that a debt is uncollectible
                                                              19
                    Service Financial Statements
Health Budgets &
 Financial Policy




 • A/R are reported on the annual audited financial
   statements
 • Service Financial Statements located at
   OSD(Comptroller) Web site:
    – http://www.dod.mil/comptroller/cfs/fy2009.html




                                                   20
                    Accounts Receivable - Policy
Health Budgets &
 Financial Policy


• Accounts Receivable Policy Memorandum (with
  attachment)
       – Policy signed on May 8, 2008
• Purpose
       – Establish policy for the recognition (“as rendered”),
         classification, recording, aging, collection, disposition
         and reporting of accounts receivable in order to improve
         the accuracy of financial statements
       – Compliance with DoD’s Financial Management
         Regulation (FMR) and Generally Accepted Accounting
         Principles (GAAP)
                                                                21
                    Accounts Receivable – Policy (con’t)
Health Budgets &
 Financial Policy


• Implementation Date
   – 1 October 2009 (for FY 2010 reporting purposes)
• Title 10 United States Code, Chapter 55, Section 1095
   – This policy does not modify the ability of the Services to
      use monies collected in the fiscal year collected
      10 U.S.C. 1095(g) reads as follows: "Amounts collected
      under this section from a third-party payer or under any
      other provision of law from any other payer for health
      care services provided at or through a facility of the
      uniformed services shall be credited to the appropriation
      supporting the maintenance and operation of the facility
      and shall not be taken into consideration in establishing
      the operating budget of the facility."                  22
                    Financial Metrics
Health Budgets &
 Financial Policy


  • Implementation of Medical A/R Policy in 1st
    Quarter of FY 2010 had a large impact
     – Accounts Receivable (A/R) Public debt > 30
       days at Dec 31, 2009 (Red Metric)
        • SMA-Army ($358.7 million)
        • SMA-Navy ($5.8 million)
        • SMA-Air Force ($182.1 million)
     – Total reported Medical A/R was $546.6 million


                                                   23
                    Management of Accounts Receivable
Health Budgets &
 Financial Policy

• Revenue Recognition
     – All Defense Health Program (DHP) funded activities will
       recognize and record a receivable when it establishes a
       claim based on goods or services provided (“as
       rendered”)
     – Financial statements have two A/R classifications:
        • Intragovernmental and Nonfederal (public)

        • Debt Management (Debt Collection Improvement Act
          (DCIA)
     – Working with OUSD(C) to potentially add language to the
       FMR to better clarify medical debt and when to “turn-it
       over” to DFAS                                           24
                    Management of Accounts Receivable
                                         (continued)
Health Budgets &
 Financial Policy



      • Proprietary vs. Budgetary
              – Recommended accounting entries are:
                Debit USSGL 1310 (Accounts Receivable) and credit
                USSGL 6790 (Other Expenses Not Requiring
                Budgetary Resources)
              – This will ensure a correct financial statement entry
                without the potential for a appropriation violation and
                maintain USC 1095 flexibility




                                                                     25
                          Accounts Receivable - Revenue
Health Budgets &
                                   Recognition
 Financial Policy


          • All Defense Health Program (DHP) funded
            activities will recognize and record a
            receivable when it establishes a claim based
            on goods or services provided (“as rendered”)

          • There are two classifications of accounts
            receivables:

                    – Intragovernmental
                    – Nonfederal
                                                          26
                     Accounts Receivable - Going Forward
Health Budgets &
 Financial Policy

       • Accuracy in reporting
                – Accounts receivable reports will be better than what we have
                  now
                – Reports will include aging data
                – Visibility of all accounts (including TPC accounts receivable
                  older than prior year 2)

       • Will become more accurate as procedures, systems and
         data collection become more standardized

       • Central reporting will improve as funded systems change
         request have been submitted to:
                – “Push” accounts receivable data from TPOCS and
                  CHCS/AHLTA (both MSA and inpatient TPC), and
                – Calculate interest in both MSA and TPOCS                        27
                    Accounts Receivable - Going Forward
Health Budgets &
 Financial Policy




       • Do not want to impact ability for billing
         contractors to develop and/or use their own
         billing management system
       • Possibility of accounts marked as transferred in
         MSA, but documentation never forwarded to the
         Defense Finance and Accounting Services
         (DFAS) Support Center
       • Some joint ventures are generating Department
         of Veterans Affairs bills on Excel spread sheets
                                                       28
                    Accounting System – Going Forward
Health Budgets &
 Financial Policy


   • SMA Audit Committee will work with the SMA –
     Army, SMA – Navy, and SMA – Air Force to
     establish procedures for recording AR
   • Provide your UBO Service Manager and Service
     RM monthly AR data in the following categories:
           – Intragovernmental
               • MSA, TPOCS, Unbilled, changes to Allowance
           – Nonfederal
               • MSA, TPOCS, Unbilled, changes to Allowance

                                                              29
                     Accounts Receivable
                    Service Points of Contact
Health Budgets &
 Financial Policy




• Army -
• Navy -
• Air Force –




                                                30
                         MCFAS
Health Budgets &
 Financial Policy


  Managed Care Forecasting and Analysis System
    (MCFAS)
  • End of year forecast by beneficiary group
     – Active duty (AD) and AD family members
       using Service-supplied units
     – Retiree (R) or R family members or survivors
       using actuarial model with inputs from
       Defense Enrollment Eligibility Reporting
       System (DEERS), new retirees and death
       rates from DoD actuary, migration estimates
     – Mobilized Guard and Reserve (GR) and
       Inactive GR                                  31
                    MCFAS (Continued)
Health Budgets &
 Financial Policy


   • Beneficiary demographics forecasted from
     historical DEERS data
      – Use historical unit age/gender mix to
        estimated demographics of Service-supplied
        officer/enlisted unit endstrengths
   • Forecast ZIP Code location of beneficiaries
   • Map eligibles and historical enrollees to
     geographic concepts
      – Drive-time market areas, catchment areas,
        TRICARE Regions, MAJCOMs

                                                     32
                             MCFAS: Inputs
Health Budgets &
 Financial Policy


  Active Duty/Family Members                           Retirees/Family Members/Survivors

   Comptroller                                                          Office of DoD Actuary
   • Active Duty FYDP                                                   • Retiree Death Rates
                                             DEERS                      • Survivor Death Rates
                                   • Eligible/Enrollee demographics
   Service Ops Plans                                                    • New Retirees
                                          Market Areas
                                      • Drive-time Market Areas
                                  • TMA Catchment Area ZIP Codes        Historical DEERS
                                           Geography                    • Family Profiles
                                        • TMA DMIS ID table             • Student Losses
                                    • MTF changes (e.g., BRAC)
                                    • Boundaries - Region, State,       • Migration Rates
                                      Country, County, ZIP Code




                    Active/Inactive Guard Reserve/Family Members
                           HA/TMA /Policy
                           • Mobilization Assumptions
                           • Forecasts of TRICARE Reserve Select
                           • Timing/Duration of Transitional Benefits                       33
                         Outline
Health Budgets &
 Financial Policy


   •     Financial Statement Reporting Requirement
   •     Legacy Accounting Systems
   •     Medical Accounts Receivable (A/R)
   •     Managed Care Forecasting & Analysis System
         (MCFAS)




                                                      34
                      Questions?
Health Budgets &
 Financial Policy




                    TMA OCFO/MC&FS




                                     35

				
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Description: Medical Financial Management Course document sample