The Securities and Exchange Commission has issued new accounting guidance on income from electronic health records meaningful use incentive payments, according to a Health Data Management report.
The SEC said eligible professionals and hospitals who receive incentive payments through meaningful use should use the "gain contingency" accounting model for recognizing the income. In response to the guidance, Nashville, Tenn.-based HCA changed its financial expectations — not the amount, but the calendar year when incentive payment income could be recognized.
HCA had been using an accounting model based on a consensus position of the American Institute of Certified Public Accountants' healthcare panel that recognized incentive payment income sooner than is now allowed under the SEC. In its Nov. 1 third quarter earnings call, HCA estimated an income of $400 million-$430 million from meaningful use incentive payments in calendar year 2011. The projection is now at $190 million-$220 million for 2011. The remaining estimated $210 million would be recognized as income in 2012.
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The SEC said eligible professionals and hospitals who receive incentive payments through meaningful use should use the "gain contingency" accounting model for recognizing the income. In response to the guidance, Nashville, Tenn.-based HCA changed its financial expectations — not the amount, but the calendar year when incentive payment income could be recognized.
HCA had been using an accounting model based on a consensus position of the American Institute of Certified Public Accountants' healthcare panel that recognized incentive payment income sooner than is now allowed under the SEC. In its Nov. 1 third quarter earnings call, HCA estimated an income of $400 million-$430 million from meaningful use incentive payments in calendar year 2011. The projection is now at $190 million-$220 million for 2011. The remaining estimated $210 million would be recognized as income in 2012.
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