HFMA WEBINAR. Get Ready for the Certified Healthcare Financial Professional (CHFP) Exam

Transcription

1 HFMA WEBINAR Get Ready for the Certified Healthcare Financial Professional (CHFP) Exam Date: Friday, September 12, 2014 Time: 12:00 2:00 pm CTD (10:00 am 12:00 pm PST:MST/10:00 am 12:00 pm MDT/1:00 3:00 pm EDT) Follow this link (or paste it into a browser) to connect: Please log in 10 minutes early and test your computer connection: Enter platform where it says guest type in your full name first and last name only it is very important especially if you need CPE credit so that your attendance is accounted for For Audio: Please dial Online live seminars are broadcast over the web via Adobe Connect. You'll need a computer with a browser, Adobe Flash Player 11.2, and Internet connection. Test your connection to Adobe Connect: Login issues to check first: Are you connected to the Internet? Disable popup blocker software. Clear the browser's cache. Try connecting from another computer. Are you accessing the correct URL? Audio Issues: Close all Microsoft Applications, especially Outlook and Messenger. Having Outlook open absorbs almost 50% of the bandwidth which may cause intermittent audio interruptions. If you have questions regarding registration or connection please call HFMA Member Services at ( , ext 2). CPE Information: To receive CPE Credits for this webinar you must participate in online polling during the webinar and complete the online program evaluation within 2 working days. After 2 working days online programs will be inactive and you will not receive CPE Credit. The URL below will take you to our on-line evaluation form. URL: You will need to enter your HFMA I.D. # (found in your confirmation ) You will also need to enter this Meeting Code: 14AT68 Your comments are very important and enable us to bring you the highest quality Programs! To review your CPE information, please visit the HFMA web site at log into your profile, and retrieve all CPE information (by date) within your "CPE Center.

2 Get Ready for the Certified Healthcare Financial Professional (CHFP) Exam Successfully Completing the Exam Friday, September 12, :00 2:00 pm CTD (10:00 am 12:00 pm PST:MST/10:00 am 12:00 pm MDT/1:00 3:00 pm EDT) Session Facilitators Joseph Abel, CPCC, ACC, PhD Director, Career Services HFMA Christoph Stauder, CPA, FHFMA Stauder Consulting Diane Blaha, FHFMA Blaha Consulting, LLC 2 1

3 Certification Exam Preparation Guiding Questions and Agenda CHFP Certification Exam How should I approach the exam? Financial Reporting Ratios are our friends! Any successful chapter practices tips? 3 What is Assessed? Revenue Cycle Budgeting & Forecasting Disbursements Financial Reporting Internal Controls Contract Management 4 2

4 The Certification Exam Revenue Cycle Budgeting & Forecasting Financial Reporting 5 The CHFP Certification Exam An applied finance exam Not a book test Not at CPA level Not a revenue cycle exam Provider management experience is the best preparation 6 3

5 Recipe for Success Understand and be able employ the basic tools of financial reporting: Know your way around the financial sheets Be able to find, understand and apply financial data Know the basic ratios and be able to plug in the correct numerator and denominator 7 The Examination 8 4

6 What can my chapter do? 9 Chapter Leaders Discussion Comments? Questions? 10 5

7 Budgeting & Forecasting: a deep dive into the CHFP curriculum Christoph Stauder, CPA, FHFMA Learning Objectives At the end of this session, you will be able to: Know what to study and learn for the B&F portion of the CHFP exam. Calculate three-way variances, breakeven, and capital project profitability ( ROI ). 12 6

8 B&F in the HFMA Online Study Guide 13 B&F in the HFMA Online Study Guide Capital budgeting 14 7

9 Is budgeting a waste of time? 15 Variance Analysis Two ways to analyze variances The conventional, line-by-line approach The elegant, 3-way variance approach Benefits of 3-way variance analysis a) Disaggregates variances into their major components 1. Input cost (labor or supply) 2. Efficiency (productivity) 3. Volume (the effect of volume on cost) b) More credible method of analysis because it: 1. Relates inputs (costs) to outputs 2. Is objective and rigorous 3. Fosters accountability Requires a unit of service (UOS) statistic to calculate! 16 8

10 Variance Formulas Labor price or rate variance (Actual labor price budgeted labor price) x actual labor hours (AP BP) x AQ Efficiency variance (Actual labor quantity to produce actual output budgeted labor quantity to produce actual output) x budgeted labor price (AQa BQa) x BP Volume variance (Budgeted labor quantity to produce actual output budgeted labor quantity to produce budgeted output) x budgeted labor price (BQa BQb) x BP 17 Variance Example HFMA Community Hospital Monthly Responsibility Report Actual Budget Variance Var % Wage Expense Department Manager $ 3,330 $ 3,330 $ - 0.0% Technician II $ 12,240 $ 9,180 $ (3,060) -33.3% U Technician I $ 15,680 $ 12,530 $ (3,150) -25.1% U Aide $ 3,400 $ 3,400 $ - 0.0% Total Wage Expense $ 34,650 $ 28,440 $ (6,210) -21.8% U Labor Hours Department Manager % Technician II (170) -33.3% U Technician I 1, (340) -43.6% U Aide % Total Labor Hours 2,310 1,800 (510) -28.3% U Units of Service (UOS) Procedures 1,650 1, % F Labor cost per hour $ $ $ % F Labor hours per UOS (0.20) -16.7% U 18 9

11 Variance Example Price or Rate Variance Measures the effect of labor rate per hour on the department's performance Favorable = labor rate per hour was less than budgeted Unfavorable = labor rate per hour was more than budgeted Actual labor cost per hour $ Budgeted labor cost per hour $ Rate variance $ (0.80) F Actual labor hours $ 2,310 (1,848) F Efficiency Variance Measures the effect of labor hours on the department's performance Favorable = labor hours per UOS were less than budgeted Unfavorable = labor hours per UOS were more than budgeted Actual labor hours to produce actual UOS 2,310 hrs Budgeted labor hours to produce actual UOS 1,980 hrs Labor usage variance 330 U Budgeted labor rate $ $ 5,214 U 19 Variance Example Volume Variance Measures the effect of volume on the department's performance Favorable = effect on labor hours was less than budgeted Unfavorable = effect on labor hours was more than budgeted Budgeted labor hours to produce actual UOS 1,980 hrs Budgeted labor hours to produce budgeted UOS 1,800 hrs Labor volume variance 180 U Budgeted labor rate $ $ 2,844 U Total of three variances: Labor rate $ (1,848) F Labor efficiency $ 5,214 U Volume $ 2,844 U $ 6,210 U 20 10

12 Cost-Volume-Profit (Breakeven Analysis) Example: FC: $20,000 Rev: $2.00 per unit VC: $.40 per unit CM: $1.60 per unit Breakeven: $20,000 $1.60 = 12,500 units Relevance for healthcare? 21 Capital Budgeting The process of determining how much to spend on capital assets and which assets to acquire Four steps: 1. Establish overall capital budget 2. Set forth profitability criteria that proposals must satisfy in order to be accepted 3. Evaluate and rank projects 4. Accept projects that meet profitability criteria All methods for evaluating projects are based on the marginal or incremental cash flow that results from each project 22 11

13 Capital Project Analysis Three accepted methods: 1. Net present value (NPV) 2. Internal rate of return (IRR) 3. Payback period Present Value (PV): The value today of an amount or amounts to be paid or received later, discounted at some interest or discount rate. The exam gives you the necessary PV tables; you don t need a financial calculator. 23 Net Present Value (NPV) Present value of a project s cash flow must exceed its cost Requires selecting a discount rate Discount rate = cost of capital (minimum acceptable rate of return), hurdle rate In comparing mutually exclusive capital projects, adopt the project with the highest NPV Period 10% NPV = present value of future cash flows initial cost

14 Solution 1. PV of cash flows: $5,000 * = $22, NPV of project: $22,819 - $22,000 = $ Internal Rate of Return (IRR) Rate of return of a project must exceed the cost of capital IRR is the interest rate that equates the present value of a project s cash inflows and the cost of the project; the interest rate at which the project s discounted cash inflows and the outflows exactly cancel each other out Finding the IRR requires interpolating from present value tables Discount rate Present value from ordinary annuity table Annual cash flow Discounted value of $100,000 a year for 5 years 11% $100,000 $369,590 12% $100,000 $360,048 Initial cost: $365,000 At 11%: $100,000 * = $369,590 (too high) At 12%: $100,000 * = $360,048 (too low) 26 13

15 Solution IRR has to be is between 15% and 16% At 15% IRR, the PV of the $33,000 investment is $33,522 (too high) At 16% IRR, the PV of the $33,000 investment is $32,743 (too low) Interpolating between 15 and 16 percent: $33,522 - $32,743 = $779 ($33,522 - $33,000) $779 =.67 15% + (.67 * 1%) = 15.67% 27 Certification Necessities: Hints on How To Study Diane Blaha, FHFMA Blaha Consulting LLC September 12,

16 Learning Objectives At the end of this session, you will be able to: Structure activities to support your study style Build awareness within your chapter for certification support Know how to access Self Study course, material or other resources 29 The Certification Candidate I think I can do it. But how? 1. Online study guide 2. Chapter Assistance (course, webinars, coach) 3. Online examination (CHFP sample exam) 4. Other Resources (Other Chapters) 30 15

17 Whatever It Takes You need to create a study work plan. Create a work plan for yourself. It only works if it is right for you! We all learn differently. Four NH/VT Certification Committee members used different approaches successful results! 31 Different Ways and Tips To Share Several different methods of preparing for exam: 1. Study time daily / weekly 2. Test Your Knowledge or Mix N Match exam questions 3. Outline modules & key information 4. Don t delay with exam 5. Flash Cards or Quizlet iphone / ipad (next page) 32 16

18 To download Quizlet, you need to have itunes Screens: CHFP Study Set Ratio Set CHFP Study Set Revenue Cycle CHFP Study Set Budgeting CHFP Study Set Internal Control CHFP Study Set Disbursements 33 Search for CHFP Cards Learn Scatter Flash Cards Definitions or Key Information Match all the terms with definitions A timed Game 34 17

19 CHFP Study Set Disbursements (using Quizlet application) 6 terms HFMA's CHFP Study Flash Cards/Flashcards for the Disbursement module Payroll forms I-9 Employment Eligibility Verification: Citizen? W-4: Allowances SS8 Determination of Worker Status W-2 Wage and Tax Statement 1099 Misc Income Annualized Method for FTE Calculation The equivalent of one 2,080-hour employee. productive only for 239 days (or 1,912 hours) when weekends, holidays and unproductive time is removed. 2/10 N/30 Two 10 net 30 - if payment received within 10 days, 2% is deducted from bill, otherwise, the total is due in 30 days A Study Work Plan (be creative) Plan Actual Activity Date Activity Date Read about certification on HFMA website Take sample exam Study Revenue Cycle 1 Study Revenue Cycle 2 Study Disbursements Study Budgeting & Forecasting Study Internal Control Study Financial Reporting 36 18

20 6. A Study Work Plan (continued) Plan Actual Activity Date Activity Date Study Contract Management Complete the Core Curriculum end of course self assessment exam to obtain 10 hours of CPE (you need to score 70% or higher) Participate in Webinar 1 Participate in Webinar 2 Participate in Webinar 3 Participate in Webinar 4 Register for CHFP exam Take CHFP exam 37 #1 Locate the Online Study Guide / Select: Education Search for: Certification / CHFP / CRCR / CTS Review requirements Review cost of study guide/ipad version exists Sample CHFP Certification Examination 38 19

21 #2 Chapter Assistance Possible Resources: Chapter scholarship Chapter coaching course Multi-chapter web-based coaching Members to sign an agreement 39 #2 Chapter Assistance (continued) Reimburse specific $$$ or sharing cost Micro Case Study webinar Personal coach Study Groups Cram Sessions 40 20

22 #3 NH/VT Chapter Creates Awareness Each Newsletter 2 or 3 Articles Offer sponsorship program Offer other education Webinars Announcements and blast Social Media promotions Furnish coaching course material 41 NH / VT Chapter Website (certification tab) Name Certified Members Test Your Knowledge or Mix N Match Sample Question Coaching webinar recordings Pre-recorded webinars on specific topics: Audited Financial Statements Financial Statement Analysis Calculation of Financial Ratios Medicare cost report Coaching Tips (Hints on how to study) 42 21

23 Preparing for the Exam Schedule time to complete the self-study and coaching sessions before webinars Allow time to complete activities within course Plan time to review course and self study material Use chapter assistance / other chapters 43 Hints on How to Study 44 22

24 Questions Diane L. Blaha, FHFMA Blaha Consulting LLC Subject Line (for ): Certification Question 45 To Complete the Program Evaluation The URL below will take you to HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) Enter this Meeting Code: 14AT68 URL: Your comments are very important and enables us to bring you the highest quality programs! 46 23