For the last three and a half years, the Affordable Care Act has kept the health care industry on its toes, but when it comes to making sense of the act, the health care practice of Miami-based Top 100 Firm Morrison, Brown, Argiz & Farra has no problem keeping its clients up to speed. It's up to Ron Finkelstein, partner and head of the firm's health care services group, to guide the health care team and its clients through the ongoing modifications to the act, which was signed into law by President Obama on March 23, 2010.

Finkelstein has been serving the health care industry for nearly 20 years. He launched his own accounting health care practice in downtown Ft. Lauderdale, Fla., and 10 years ago agreed to merge his practice with MBAF. "Ten years ago, when we merged, MBAF did not have a robust health care practice," said Finkelstein. "One of the goals we set out in the merger was to grow the health care niche into a diversified client base utilizing MBAF's full breadth of assurance, consulting and tax resources. We believe we've attained our goal and have done that very successfully."

Since the merger, MBAF has built its health care division throughout the state of Florida, assisting clients like Joe DiMaggio Children's Hospital. The firm is now on a mission to keep its clients up to date on the complexity in the regulations and all of the legislative changes that come with the ACA, which Finkelstein said make for a robust area to work in.



As governments at both the federal and the state level work out the kinks in the ACA, there are two areas of concern that MBAF's health care provider clients are anxious about: cost and revenue. When it comes to cost, Finkelstein said that the challenge clients face is how companies and health care providers can control their insurance expenses and payroll cost. MBAF is hearing concerns from clients who may be close to being over the 50-employee mandate. Those clients have to determine what they need to do to get under the threshold and also look at how to control the high cost of escalating health insurance expenses.

Another challenge that clients are faced with on the cost side is trying to figure out how to measure the amount of health care investments they have to make in information technology. Health care IT typically involves electronic health records, or EHR systems, which Finkelstein said are becoming more prevalent in the health care industry.

As for the revenue factor, health care providers are concerned about how the ACA will impact patient revenue. "As a result of the Patient Protection and Affordable Care Act, there are significant changes taking place with how Medicare and commercial payors reimburse health care providers. There's more emphasis on risk-sharing and measuring quality outcomes, so consequently, a greater portion of provider payments will be based on these two critical factors," Finkelstein said. The other concern that keeps MBAF's clients apprehensive about the ACA is trying to figure out the right integration strategy. "There's a lot of mergers and consolidation going on in the industry right now, which is a byproduct of the ACA," Finkelstein observed.



Under the ACA, to participate in the Medicare Shared Savings Program, health care organizations need to become "Accountable Care Organizations." An ACO can be defined as a set of health care providers - including primary care physicians, specialists and hospitals -- that work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients.

Finkelstein said that the main question for many providers, whether they are a hospital, a medical group, a home health provider, or a nursing home, is how to effectively integrate into the delivery system while still maintaining their respective patient revenue stream and profitability.

"Another big challenge facing health care organizations is the significant investment required in electronic medical records technology," he said, explaining that there is a big shift in the direction of measuring quality of outcomes and utilization of services. Given the projected reimbursement methodology, MBAF provider clients worry about how they are going to get compensated under their contracts. "The EHR systems will be able to measure all of these important [factors] to report performance and quality indicators," added Finkelstein. "In the accounting profession, we have a saying: If you can't measure it you can't manage it. That is what we are advising all of our clients. The EHR systems are very powerful, integrated and complex, but many of the providers are just scratching the surface on their platform and just learning how to use the powerful reporting data."

Finkelstein said that the most critical element that forward-thinking businesses in the health care sector are doing right now is taking the opportunity to leverage IT EHR systems and getting all of the data. "The data is going to be very important for them to be able to differentiate themselves from other providers as a lower-cost provider while improving the quality of care."

He is confident that the insurance companies are going to be looking at those criteria when giving the providers the right type of contracts. Finkelstein noted that one of the challenges companies face is not having the capital or the equity to make the investments. To alleviate these concerns, medical groups partner with hospitals and other institutions to share those costs.



To prepare clients for changes in the health care space, MBAF wants them to think beyond the short term. "We are advising our clients to adopt a long-term strategy which can enable them to run their business profitably," said Finkelstein. "We are recommending our clients be proactive in assessing their strategic options because of the ACA's complexity and the overall uncertainty. Whenever there is a government delay or postponement, like what happened in July on the employer insurance coverage mandate, it makes businesses become complacent and decreases their sense of urgency in making changes."

Finkelstein makes it a point that the health care team communicate with their client's insurance brokers and payroll processing vendors in order to help analyze their health insurance cost and the tax they will have to pay next year. "Another thing we do to stay in front of our clients is that we send out timely tax advisory e-alerts to advise clients whenever there is a looming deadline and how to comply. We are also being very proactive by having frequent meetings with them, whether it is quarterly or semi-annually, to review their income tax liability projections."

So how do MBAF and Finkelstein keep up with the ongoing modifications to the ACA? The health care practice subscribes to daily and weekly updates from the firm's tax and accounting research platform, which provides information on anything to do with tax implications or reporting for the ACA. The team also receives daily and weekly e-alerts from the Center for Medicare & Medicaid Services, Modern Healthcare magazine and the Kaiser Health Care Report, which Finkelstein said covers health policy, regulation and everything that is taking place in the health care sector. It's a lot to keep up with, but the firm helps staff digest it all with internal continuing education classes.

The firm's managers, directors and principals are also very active in health care organizations. It also helps that Finkelstein is a member of the American Institute of CPAs' health care expert panel and is able to meet with the panel every month through teleconferences. "We go over all of the effects regulation and legislation has on the accounting and auditing report," he said, adding, "To keep abreast of the technical changes in accounting, auditing and financial reporting, our CPA health care professional staff attend the annual national AICPA health care industry conference. For consulting and updates on health care reimbursement, regulation and legislation, some of our health care team attends the National Health Care Advisors Association semiannual conferences."



Finkelstein suggest that the complexity that comes with implementing and monitoring compliance with the ACA will lead to more business. "The recent changes in tax law, health care legislation, and M&A activity have increased the demand for our services."

The firm represents a diverse mix of clients including HMOs, provider networks, physician medical groups, home health care companies, and durable medical equip- ment companies, and they work with outpatient centers like surgery, MRI and dialy- sis centers.

Due to the consolidation wave that has taken place in the health care sector, the firm works quite a bit with private equity firms. "Whether the providers are on the buy side or sell side, they need a CPA firm that understands health care. Additionally, our expertise in the industry and litigation support capabilities enable us to provide expert witness testimony in a variety of health care commercial damage and valuation disputes," Finkelstein shared. MBAF works with midsized to large private equity firms like Hellman & Freidman and TA Associates, as well as firms that have nothing but health care companies in their portfolios. "On the buy side, we typically get retained by a private equity firm in a transaction to perform due diligence procedures, quality of earnings reporting and audit the financial statements of a target provider," said Finkelstein.

MBAF also gets recommended by attorneys who may be doing the legal work with private equity firms. "We get a lot of work from health care attorneys, both regulatory and transactional attorneys, because they typically are involved in the early stage and tend to manage the M&A transaction process."

The health care sector is a nationwide industry but Finkelstein notes that it's also "very local" given how it affects different markets. Although MBAF primarily serves the state of Florida, it has conducted work in its Boulder, Colo., Baltimore and New York City offices. The firm is a member of a couple of networks, including the National CPA Health Care Advisors Association and Baker Tilly International. Both of these networks have given MBAF the opportunity to generate new client work, Finkelstein noted. "If we need to provide health care services to larger regional/multi-state health care businesses, it's essentially transparent for the client because we are able to offer a high level of expertise by utilizing the resources of our member offices."



For those who may be contemplating venturing into the health care space, Finkelstein suggests that firms should first be prepared to make that investment in time and people. MBAF's health care practice has roughly 20 people who are dedicated to the team. The firm continues to recruit top talent and trains them in the health care field. It also takes time to network and push marketing efforts in order to grow its services.

The second step is to choose a sector within the health care industry. It can be HMOs, provider networks, medical groups, medical equipment companies, home health, senior living, senior care or long-term care. "Within all of those different categories of health care there are a lot of services to offer," advised Finkelstein, noting that it's best just to go down the existing client list and expand from there.

"Health care is a very dynamic and an ever-changing field," said Finkelstein. "We believe our firm is very committed and well positioned to work with our clients in assisting them to grow profitably."

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