Revenue Recognition Considerations for Healthcare Providers in the Age of COVID-19
In normal times, revenue recognition for healthcare providers can be a mix of art and science. The early focus of the impacts of COVID-19 has rightly been on providing patient care and maintaining and/or accessing liquidity to operate the business.
For healthcare accountants and CFOs, the next question may turn to “How do I recognize revenue in this environment?” In the normal course, providers utilize data such as procedure mix, payor mix and historical collection rates as key drivers. But all these key drivers may currently be in flux, particularly collectability.
Some relief has been granted on reporting timelines. The U.S. Securities and Exchange Commission announced that companies can seek a 45-day extension for filings due between March 1 and July 1, 2020. Additionally, many lenders and shareholder groups are providing 30- to 60-day extensions on normal reporting requirements.
There are various considerations that healthcare accounting and reporting teams should be analyzing and monitoring in order to prepare for these delayed reporting requirements.