Fiscal Health Booklet

Successfully Managing

Fiscally Healthy

HIV Nonprofits: From Systems To Sustainability Checklists, Tips & Worksheets To Increase Fiscal Health

www.healthhiv.org

Fiscal Health

Sustaining Fiscal Health in Today’s Environment The health care landscape is undergoing substantial changes. Increased emphasis on accountability and focus on high-impact, scalable strategies require service providers to remain engaged and responsive to the ever-changing health care landscape. The new focus demands a proactive approach to nonprofit program and fiscal management and accountability.

HealthHIV’s Fiscal Health: Systems to Sustainability program provides group training and targeted onsite technical assistance for Ryan White HIV/AIDS Program grantees to support organizational fiscal health, sound fiscal systems, and sustainability through revenue generation and diversification.

A distinguishing feature of the Fiscal Health: Systems to Sustainability program is the view that financial sustainability and sound fiscal care at the organizational level are conduits to improving access to health care, improving health equity and building healthy communities [HRSA Strategic Goals].

With that in mind, this publication offers practical, financial management infrastructure recommendations for nonprofit organizations and health departments.

Table of Contents

Fiscal Health

Fiscal Monitoring Top 10 Tips for Effective Fiscal Monitoring

2

Top 10 Fiscal Monitoring Strategies for Ryan White HIV/AIDS Program Grantees

3

Top 10 Tips to Improve Fiscal Sustainability

4

Nonprofit Organization Fiscal Sustainability Assessment

5-8

Top 10 Federal Grant Compliance Pitfalls

9

Top 10 Issues for Addressing Administrative/Indirect Cost

10-11

Income Diversification Top 10 Income Diversification and Revenue Generation Tips

12

Program or Organization Financial Profile Worksheet

13

Program Monitoring Top 10 Questions for Program Monitoring

14

Top 10 Eligibility Determination (ED) Strategies for Ryan White HIV/AIDS Program Direct Service Grantees and Subgrantees

15

Top 10 Client Fee Strategies for Ryan White HIV/AIDS Program Grantees

16

Top 10 Third Party Reimbursement Strategies for Ryan White HIV/AIDS Program Direct Service Grantees and Subgrantees

17

Organizational Planning Top 10 Planning Issues in Navigating the Patient Protection and Affordable Care Act

18

Top 10 Reasons to Engage Your Organization in Periodic Strategic Planning

19

Organizational Capacity Analysis Worksheet

20-21

Top 10 Reasons Organizations Should Engage in Business Planning

22

SWOT Table Worksheet

23

Organizational Development and Sustainability Top 10 Tips for Leading Resilient Healthcare Organizations

24

Top 10 Tips to Transition Healthcare Organizations

25

Top 10 Tips for Financial Sustainability Traits of Successful Nonprofit Healthcare Agencies

26

Financial Sustainability Checklist for Nonprofit Healthcare Organizations

27

Fiscal Monitoring

Top 10 Tips for Effective Fiscal Monitoring

Fiscal Health

1.

View any monitoring activities as opportunities rather than threats.

2.

Have a thorough understanding of program expectations, requirements, and monitoring standards.

3.

Ensure separate functions in a manner appropriate to organization size. This will safeguard assets and maintain financial stability, including an annual independent financial audit and corrective action plan addressing all findings, questioned costs, reportable conditions, and material weaknesses cited.

4.

Develop a budget that reflects the costs of operations, expenses, and revenues necessary to accomplish service delivery plan.

5.

Use budgets and comparative financial expense reports with sufficient detail to document the appropriateness of allocations and expenditures; review reports; and ensure that allocations are within limitations regarding uses of funding; and ensure that budgets and expenditures do not include any unallowable costs.

6.

Create and document a policy for the establishment of a schedule of charges, client eligibility determination procedures for imposition of charges, and a system for tracking charges, payments and adjustments to ensure policy is being correctly and consistently applied in accordance with policies and federal requirements.

7.

Establish and implement a process to ensure maximization of third party reimbursements, provide for routine screening of clients for program eligibility and the capability to produce required reporting on billings, collections from third party payers, and tracking of program income.

8.

Ensure adequacy of fiscal systems to generate needed budgets and expenditure reports, including accounting policies and procedures, budgets, accounting systems, and reports.

9.

Have systems, policies and procedures in place to determine allowable and reasonable costs, with methodologies for allocating costs among different funding sources in sufficient detail to allow for meaningful analysis.

10. Establish and monitor financial performance measures as a part of the organization’s quality management process to evaluate progress from benchmark to goal, and provide an opportunity to revise strategies to turn the direction of a performance trend.

2

Top 10 Fiscal Monitoring Strategies for Ryan White HIV/AIDS Program Grantees 1.

Ensure grantee fiscal monitoring policies and procedures reflect Health Resources and Services Administration (HRSA), HIV/AIDS Bureau (HAB) Part A and B Fiscal Monitoring Standards, funding opportunity announcements, grantee handbooks, and grantee organizational requirements.

2.

Request technical assistance (TA) from HAB if methods for implementing the HAB Fiscal Monitoring Standards are unclear or challenging.

3.

Develop and maintain written fiscal monitoring policies and procedures, and circulate them among grantee and subgrantee staff.

4.

Disseminate HAB Fiscal Monitoring Standards to subgrantees, and send updated materials when they are published by HAB. Notify subgrantees about HAB fiscal monitoring and related webinars.

5.

Integrate HAB and grantee fiscal monitoring policies in subgrantee contracts to ensure adherence to federal and grantee requirements.

6.

Train grantee and subgrantee staff at least annually on the fiscal monitoring policies and procedures, and following updates by HAB of the Fiscal Monitoring Standards.

7.

Require that subgrantees have written fiscal management policies and procedures, and review those materials to ensure that they meet HAB and grantee requirements. Review those written materials and provide feedback to subgrantees improve their content. With the permission of subgrantees, disseminate copies of particularly complete subgrantee policies and procedures.

8.

Apply standard auditing practices to develop a fiscal monitoring protocol to guide monitoring visits to subgrantees. Cross-train grantee fiscal and program staff to conduct site visits. Prepare written reports summarizing site visit findings, corrective actions, TA and capacity development needs, and related feedback.

9.

Provide directly or arrange TA and capacity development for subgrantees in individual or group sessions.

10. Integrate Continuous Quality Improvement (CQI) techniques to identify grantee fiscal monitoring processes that could be improved, undertake short Plan-Do-Study-Act (PDSA) cycles to test changes in those processes, review qualitative and quantitative findings to assess the outcomes of the PDSAs, further refine processes, and adopt the refined processes in grantee fiscal monitoring policies and procedures.

3

Fiscal Monitoring

Fiscal Health

Fiscal Monitoring

Top 10 Tips to Improve Fiscal Sustainability

Fiscal Health

1.

Increase the financial acumen of senior management and project managers.

2.

Connect senior management and project managers to financial reports and budgets and foster an environment for sharing financial information throughout the organization.

3.

Integrate budget and projection reports into the financial reporting systems and include cash-flow projections.

4.

Make sure financial systems are always current and monthly internal financial reports and external grant reporting is timely and completed within 25 days of the close of the previous month-end.

5.

Provide financial reports to the board of directors in a regular and timely manner to ensure board members can fulfill their fiscal fiduciary role.

6.

Monitor balance sheets closely, paying close attention to building an operating reserve and ensuring that cash and other assets are managed effectively while liabilities are not allowed to expand out of control.

7.

Create a complete accounting policies and procedures manual. Regularly update this manual to meet the ever-changing compliance requirements of funders.

8.

Plan for an Independent Annual Financial Statement Audit and A-133 Audit when required; have an audit committee (if possible) or finance committee oversee the audit process and function.

9.

Review regularly all grant agreements to ascertain that you are meeting all fiscal compliance requirements.

10. Schedule quarterly update and compliance meetings with your external granting officers and maintain a transparent fiscal relationship with them that fosters a culture for sharing compliance and financial information.

4

Note: This document is meant to be tailored to each individual organization and completed annually (or more often, if concerns arise.)

I. Related Parties and Other Sensitive Areas II. Internal Controls and Risk Assessment III. Government Grants and Related Funding Streams IV. Financial Reporting and Audits V. Other

I. Related Parties and Other Sensitive Areas

 Does the organization have a formal conflict of interest policy and annual conflict of interest disclosure statements completed by all officers, board members and management?

 Describe that policy and those statements here or provide an explanation on a separate sheet(s) and attach to this document.

 What transactions has the organization had with related parties (other than the executive

director’s compensation)? Did the board approve these transactions with full knowledge of the relationship and without input from the related party?

 Did the board approve the executive director’s total compensation in accordance with compensation review policy?

 Who approves the executive director and board members’ travel and entertainment expenses?  Are the code of ethics and whistle-blower policies current?

5

Fiscal Monitoring

Nonprofit Organization Fiscal Sustainability Assessment

Fiscal Health

Fiscal Monitoring

Nonprofit Organization Fiscal Sustainability Assessment

Fiscal Health

Continued

II. Internal Controls and Risk Assessment  Is there a healthy attitude about internal controls, originating at the very top of the organization?  Do we have adequate written procedures manuals for important financial and operational areas?  What procedures do we have in place to assure that?  Are all cash receipts are recorded properly and deposited timely? (Especially important for grants and contributions)

     

Are proper cash disbursements are made?

Are restricted resources used only in accordance with applicable restrictions?

Are assets protected from theft?

Who reconciles the organization’s bank statements, and how quickly?

Is this person independent of other cash and bookkeeping functions?

Has our auditor made recommendations for improvements in controls? If so, have they been discussed and where feasible implemented?

 How soon after the end of an accounting period is a budget-to-actual comparison made and significant variances (or lack thereof, where expected) investigated?

 Are projections regularly prepared (updated monthly) to make sure the organization is on the right course?

 Has someone knowledgeable about computers reviewed the organization’s computer security and reviewed hardware and software for performance and updates and other risks?

 Has someone knowledgeable about nonprofit taxes reviewed the organization’s activities for possible exposure?

Consider: ■ Private inurement or benefit, especially compensation ■ Possible unrelated business income and related tax ■ Possible excess lobbying/political activity ((c)(3)’s are not permitted to engage in any political activity) ■ Employee vs. independent contractor status ■ Possible failure to comply with rules related to receipt of contributions and gifts (acknowledgement, quid-pro-quo, etc.)

■ Public disclosure of Form 990 on request and board oversight of Form 990 ■ If appropriate has the organization made the “H” election related to lobbying ■ For (c)(6) membership organizations are lobbying percent of dues not deductible as business expenses disclosed?

 Has a knowledgeable attorney reviewed the organization’s activities for possible legal and other risk assessments?

 Is there anything about the organization or its operations that would be an embarrassment

to read or hear about in media outlets, such as the newspaper, evening news, social networking sites, such as Facebook?

6

Continued

III. Government Grants and Related Funding Streams

    

Does the organizationhave adequate time records to support charges to grants?

Is the organization following acceptable procurement procedures?

Is the organization adequately monitoring sub-recipients?

Has the organization filed all required reports on a timely basis?

Does the organization know the accounting system enhancements to conform to government regulations?

 Is the organization aware of the following: ■ The additional forms required, such as timesheet certifications and payment request forms?

■ The need to prepare indirect cost rate proposal, 90 days after initial award and six months after year-end? That there are agency-specific templates for your indirect cost rate proposal, such as HHS? Please see https://rates.psc.gov/fms/dca/np1.html.

■ The filing requirement for quarterly and online Federal Financial Report, SF Form 425?

 Has the organization had all required audits under Circular A-133? ($500,000 threshold)

Organizations have nine months from year-end to complete the audit? Were there any findings?

If so, have they been appropriately followed up with a corrective action plan?

 Has any government agency challenged any of the organization’s procedures or charges to grants? If so, has the matter been satisfactorily resolved?

IV. Financial Reporting and Audits

 Has the organization received clean (unqualified) reports from our auditor?  Is the organization satisfied that its auditor is independent?  How much in non-audit fees has the organization paid its audit firm?  How many years has the current audit firm/team been used for annual financial statement audits?

 Does the organization’s auditor understand that (s)he has unrestricted access to the board/ audit committee?

 Has the organization’s auditor received a clean peer review report?  Has the organization filed all required government reports (Form 990, state forms, etc.) on a timely basis?

7

Fiscal Monitoring

Nonprofit Organization Fiscal SustainabilityAssessment

Fiscal Health

Fiscal Monitoring

Nonprofit Organization Fiscal SustainabilityAssessment

Fiscal Health

Continued

V. Other

 Has the organization made all payroll tax deposits fully and on a timely basis? (If this is not done, officers and board members can be held personally liable.)

 Are the organization’s human resources (HR) practices current? Are they administered in

a fair and equitable manner? Is the organization’s employment manual regularly reviewed and updated?

 Does the organization carry adequate property and liability insurance and other insurance to protect its assets?

 Does the organization have a directors’ and officers’ insurance (errors and omissions) policy?

If so, coverage adequate and are premium payments current?

 Has the organization’s board adopted a formal policy on desired levels of operating reserves, and are the reserves adequate?

   

Has the organization analyzed cash flows for possible problems and risks?

Are by-laws and operating policies adhered to and periodically reviewed and updated?

Is there a board orientation for all new board members?

Are there any chapters, committees, task forces and the like acting on behalf of the organization?

 Has a code of ethics been adopted? Does it include a conflict of interest policy?  Has the investment policy been reviewed and updated?  Has the board been given the opportunity to review our Form 990 to make sure it is complete and tells an accurate story about the activities and operations of the organization before filing?

* “Related parties” include organization officers, directors, trustees, and management in decision-making positions, major donors, and members of the immediate families of any of the preceding; controlled and affiliated organizations, trusts, and businesses in which any of the preceding are in significant positions of authority (owner or manager).

8

Top 10 Federal Grant Compliance Pitfalls 1.

Lack of knowledge and/or understanding of federal Office of Management and Budget (OMB) regulations, combined with failure to obtain training and/or failure to ask for help.

2.

Restricted funds expended for unauthorized purposes per the funder memorandum of understanding (MOU).

3.

Improper or lack of supporting documentation for expenses and required matching funds.

4.

Personal activity reports based on budgeted hours instead of actual time worked.

5.

Federal financial reports cannot be reconciled to the general ledger for the appropriate federal award.

6.

Cash draws used to advance funds on federal awards where such funds are not used to pay expenses in a timely fashion.

7.

Inconsistent allocation of shared/indirect costs.

8.

Lack of written fiscal policies and procedures.

9.

Staffing programs with “contractors� to avoid paying FICA Employer Taxes.

10. Commingling of federal funds.

9

Fiscal Monitoring

Fiscal Health

Fiscal Monitoring

Fiscal Health

Top 10 Tips For Addressing Administrative/Indirect Cost Continued

1.

Understand the difference between administrative/indirect costs and indirect costs, as defined by the Office of Management and Budget (OMB): ■ Administrative/indirect costs are costs that are not directly accountable to a cost

object, such as a particular function or product.

■ Indirect costs, also known as overhead, may be fixed or variable, and include

occupancy, taxes, administration, personnel, and security costs.

2.

Determine whether a cost can be allocated directly vs. indirectly, as dictated by the OMB’s Cost Principles: “Costs identified specifically with awards are direct costs of the awards and are to be assigned directly thereto. Costs identified specifically with other final cost objectives of the organization are direct costs of those cost objectives and are not to be assigned to other awards directly or indirectly.” (OMB Circular A-122) Note: It is possible to justify the handling of almost any kind of cost as either direct or indirect. Labor costs, for example, can be indirect, as in the case of maintenance personnel and executive officers; or they can be direct, as in the case of project staff members.

Similarly, materials such as miscellaneous supplies purchased in bulk—pencils, pens, paper - are typically handled as indirect costs, while materials required for specific projects are charged as direct costs.

3.

Determine fixed costs vs. variable costs. They are generally determined by the CFO or budget officer.

4.

Pay close attention to budgetary allocations of administrative/indirect costs.

5.

Address tracking administrative/indirect costs in the budgetary and financial system(s).

6.

Determine whether the Health Resources and Services Administration (HRSA) requires the organization to have an approved indirect cost agreement and, if so, how it is secured.

7.

Develop cost allocation plans and how they facilitate improved monitoring of expenditures both within and across programs.

8.

Review regulations governing the use of program income to augment administrative/ indirect costs. Maintain effective communication between program, grant and finance staff regarding budget issues that include administrative/indirect cost monitoring.

10

Top 10 Tips For Addressing Administrative/Indirect Cost Continued

9.

Maintain effective communication between, program, grant and finance staff regarding budget issues that include administrative/indirect cost monitoring.

10. Avoid comingling of federal funds. To ensure proper administration of grant funds, it is recommended that AIDS service organizations have financial systems that: ■ Provide specific cost centers that identify each grant.

■ Never use funds granted for a specific purpose to support any activities not authorized

by the Notice of Grant Award (NGA).

■ Adhere to the approved categorical budget, and request authorization for budget

modifications, as required by HRSA policy.

■ Have, at minimum, monthly meetings that include program, financial, and grant

representatives to discuss progress with administering the program in accordance with the program budget and identify additional or unforeseen fiscal needs.

11

Fiscal Monitoring

Fiscal Health

Income Diversification

Fiscal Health

Top 10 Income Diversification and Revenue Generation Tips 1.

Ensure communication between program and fiscal managers.

2.

Understand the organization or program’s funding sources in order to determine reliance on a single funding source.

3.

Determine the organization or program’s financial funding breakdown (i.e. federal, state, local, private).

4.

Identify other funding sources.

5.

Build relationships with grant officers to understand funding requirements and future RFP requirements.

6.

Determine if the organization can begin to bill Medicaid or third party insurance for specific services.

7.

Determine expertise of staff that can be leveraged for other funding opportunities.

8.

Ensure the board of directors understands its role in sustaining the organization.

9.

Explain to line staff their role in ensuring the sustainability of programs through data collection and accurate reporting.

10. Consider strategic alliances and strategic partnerships as ways to expand funding, apply for joint programming or to sustain services.

12

Program or Organization Financial Profile This worksheet can be used to help individual organizations determine if its fiscal portfolio includes diversification or opportunities to diversify. Program managers should consider the funding for a program.

Consider the entire organization’s funding when completing.

Fiscal Year 20___ - 20 ___ Total Operating Budget: ____________________________

Funding Source

Approximate Amount

Percent of Total Budget

i.e. Ryan White

$650,000

$650,000/1,200,000 = 54%

Federal Funding

Total Federal Funding

% of Total Budget

State Funding

Total State Funding

% of Total Budget

Local Funding

Total Local Funding

% of Total Budget

Private Funding

Total Private Funding

% of Total Budget

13

Income Diversification

Fiscal Health

Program Monitoring

Top 10 Questions to Assist in Program Monitoring

1.

Is the agency/program in compliance with requirements specified in the contract or grant?

2.

Is the program achieving the goals and objectives outlined in the organization’s proposal and/or final contract agreement?

3.

Has the organization developed program-specific policies and procedures?

4.

Do staff credentials meet or exceed contract requirements?

5.

Is the organization generating accurate and timely program and fiscal reports?

6.

Are client records complete, accurate and well organized?

7.

Does the organization have documentation to support all program activities?

8.

Is the organization’s actual levels of service meeting its projected contract levels of service?

9.

Does the organization have a staff development and training plan?

10. Has the organization used consumer feedback and customer satisfaction findings when making program improvements?

14

Fiscal Health

Top 10 Eligibility Determination (ED) Strategies for Ryan White HIV/AIDS Program Direct Service Grantees and Subgrantees 1.

Ensure that grantee and subgrantee ED policies and procedures reflect Health Resources and Services Administration (HRSA), HIV/AIDS Bureau (HAB) Part A and B Fiscal Monitoring Standards, funding opportunity announcements, and policy announcements.

2.

Monitor federal and state health policy updates regarding the Patient Protection and Affordable Care Act (ACA) Marketplaces and Medicaid expansion to ensure that staff has an accurate understanding of eligibility criteria and enrollment processes.

3.

Train case managers, eligibility workers, and other key staff about ED processes and eligibility criteria for Medicaid/Medicare, private insurance, and Marketplace Qualified Health Plans. Participate in national and local webinars and workshops regarding ED and Marketplace enrollment. Train staff to calculate accurately, household membership and income, including calculation of modified adjusted gross income (MAGI).

4.

Review and update intake and assessment forms to ensure that staff accurately gather information needed to determine enrollment in or eligibility for public and private health insurance.

5.

Help clients to enroll in the health insurance plan that best meets their eligibility and ability to pay for premiums, co-pays, and deductibles. Refer low-income clients to the AIDS Drug Assistance Program (ADAP) or Health Insurance Continuation Program for assistance in paying for premiums, co-payments, and deductibles. Notify clients about which health insurance plans your agency participates to ensure that they can continue to receive your services.

6.

Use public and private insurance electronic verification search engines to confirm health insurance enrollment before each visit to identify lapses in enrollment. Counsel clients about the need to reenroll in insurance.

7.

Conduct chart review to monitor the ED activities of the agency’s staff to ensure accurate ascertainment of enrollment in or eligibility for health insurance. Use case conferences to address the ED needs of complex clients.

8.

Work with Part A and Part B grantees to design and implement centralized ED to improve accuracy and reduce administrative burden on clients and agency staff.

9.

Use CAREWare or other client-level data systems to post scanned updated ED documents to reduce paper records and improve ED and care coordination.

10. Assist clients to enroll in SSI, SSDI, or TANF. Participate in SSI/SSDI Outreach, Access, and Recovery (SOAR) training workshops, webinars, and local networks. Coordinate SSI/SSDI enrollment activities with Social Security Administration (SSA) field offices and state disability determination service staff to expedite disability claims.

15

Program Monitoring

Fiscal Health

Program Monitoring

Fiscal Health

Top 10 Client Fee Strategies for Ryan White HIV/AIDS Program Grantees 1.

Ensure client fee and sliding fee scale policies and procedures reflect Health Resources and Services Administration (HRSA), HIV/AIDS Bureau (HAB) Part A and B Fiscal Monitoring Standards, funding opportunity announcements, and grantee handbooks, as well as grantee organizational requirements.

2.

Request technical assistance (TA) from HAB if methods for assessing, collecting, and accounting for client fees are difficult to implement.

3.

Develop and maintain written client fee policies and procedures, and circulate them among grantee and subgrantee staff.

4.

Develop your agency’s fee schedule for use in determining.

5.

Provide written notification to applicants for Ryan White Program services about the client fee policy and applicants’ rights and responsibilities.

6.

Train grantee and subgrantee staff to assess client income accurately. Provide spreadsheets or other software to help staff to calculate clients’ gross income and to determine client fees.

7.

Develop software systems that help track client out-of-pocket payments and determine when the cap on charges has been met.

8.

Consider developing a centralized system for calculating and tracking client charges to determine when clients meet their annual cap.

9.

Apply standard auditing practices to develop a fiscal monitoring protocol to guide monitoring visits to subgrantees regarding client charges and other fiscal policies.

10. Coordinate implementation of the HAB client charge policy with other Ryan White Program grantees in your service area to ensure consistent approaches and avoid overcharging clients.

16

Top 10 Third Party Reimbursement Strategies for Ryan White HIV/AIDS Program Direct Service Grantees and Subgrantees 1.

Ensure that grantee and subgrantee policies and procedures reflect Health Resources and Services Administration (HRSA), HIV/AIDS Bureau (HAB) Part A and B Fiscal Monitoring Standards, funding opportunity announcements, and policy announcements related to payer of last resort. Track and report grant income to HAB.

2.

Enroll in Medicaid/Medicare as a fee for service (FFS) provider and managed care plan network member. Assess Medicaid/Medicare requirements for clinician credentialing and determine if the enrolling organization’s staff meet those requirements.

3.

Identify and enroll in private insurance plans and managed care organizations in the organization’s service area, including plans participating in the Patient Protection and Affordable Care Act (ACA) Marketplace. Have the organization’s legal counsel carefully review contracts with insurers.

4.

Become familiar with services covered by public and private insurers, the amount reimbursed for those services, and assess the organization’s program costs to determine adequacy of payment.

5.

Establish effective eligibility determination processes to identify insured clients and bill for their services accordingly. Use electronic health insurance enrollment verification systems prior to visits to identify and address lapses in client enrollment.

6.

Adopt effective coding and billing practices, obtain an up-to-date electronic billing system, and employ (directly or through contract) experienced, credentialed billing staff.

7.

Train clinicians and other staff producing billable services to document appropriately the services that they provide to support insurance claims.

8.

Identify strategies that may increase revenue, such as certification as a Patient Centered Medical Home (PCMS) or engaging in risk sharing arrangements with insurers.

9.

Assess the efficiency of patient flow, determine if task shifting can increase clinician productivity, identify methods for increasing market share of HIV-positive or other patients, and consider other ways to increase your program’s volume.

10. Integrate Continuous Quality Improvement (CQI) techniques to identify processes that can be improved; undertake short Plan-Do-Study-Act (PDSA) cycles to test changes in those processes; review findings to assess the outcomes of the PDSAs; further refine processes; and adopt the refined processes. Topics of PDSAs might include reducing the number of rejected claims, shortening the claims submission process, increasing revenue capture, and improving chart documentation to support claims.

17

Program Monitoring

Fiscal Health

Organizational Planning

Top 10 Planning Issues in Navigating the Patient Protection and Affordable Care Act

Fiscal Health

Although it is difficult to isolate just 10 important points about the Patient Protection and Affordable Care Act (42 USC 18001), here are the more key points: 1.

The act mandates specific essential health benefits of a qualified health plan including mental health and substance use services.

2.

There is a provision for the establishment and operation of nonprofit, member-run health insurers as well as a community health insurance option.

3.

Small businesses are eligible for a tax credit for employee health insurance expenses.

4.

Specific employer responsibilities include notifying employees of qualified plans and reporting of health insurance information.

5.

There are specific requirements to improve access to and make improvements in particular public programs including Medicaid, CHIP, Medicare and Maternal & Child Health Services. These improvements include streamlining procedures for enrollment.

6.

Emphasis on improving the quality and efficiency of health care (i.e. linking payment to quality outcomes under the Medicare Program and encouraging the development of new patient care models).

7.

Mandates a variety of grant related initiatives including community transformation grants, healthcare innovation grants, and workforce development grants.

8.

Ensures beneficiary access to physician care and clinical preventive services (includes the establishment of school based health centers and oral healthcare prevention activities).

9.

Strengthens primary care and improves overall access to healthcare services by increasing spending on Federally Qualified Health Centers and providing for the co-location of primary and specialty care in community-based mental health settings.

10. Provides for more affordable medicines for children and underserviced communities by expanding participation in the federal 340B pharmaceutical program.

18

1.

Clarifies the organizational vision.

2.

Clarifies the organizational mission.

3.

Establishes organizational values, which sets an ethical tone for the organization.

4.

Provides an opportunity to assess internal organizational strengths and weaknesses.

5.

Challenges the organization to assess external organizational threats and opportunities.

6.

Identifies critical issues that the organization should address in the near and long term.

7.

Clarifies organizational priorities.

8.

Establishes measurable organizational goals and objectives.

9.

Engages the organization in the process of resource allocation in order to address goals and objectives.

10. Identifies the staff to carry out the organization’s strategic plan.

19

Organizational Planning

Top 10 Reasons to Engage Your Organization in Periodic Strategic Planning

Fiscal Health

Organizational Planning

Fiscal Health

Organizational Capacity Analysis Characteristics

Strength (+)

Strategic Leadership Leadership (managing culture, setting direction, supporting resource development, ensuring tasks are done) Strategic planning (developing tactics to attain objectives, goals and mission)

Governance (legal framework, decision-making process, methods for setting direction, external links) Structure (roles and responsibilities, coordinating systems, authority systems, accountability systems) Human Resources Human resource planning (job descriptions, recruiting, selecting, orientation) Training and professional development (performance management, monitoring and evaluation) Career management (performance appraisal system)

Compensation (wage rates, incentives)

Core Resources Infrastructure (facilities, equipment, maintenance systems, utilities)

Technology (information, communication technologies, levels of technology needed/acquired to perform work) Finance (planning, managing and monitoring, cash flow and budget, ensuring an accountable and auditable financial system)

20

Weakness (-)

Not Addressed (NA)

Organizational Capacity Analysis Characteristics

Strength (+)

Process Management Problem-solving and decision-making (defining problems, gathering data, creating alternatives, deciding on solutions, monitoring decisions) Communications (exchanging information, achieving shared understanding among organizational members) Monitoring and evaluation (generating data, tracking progress, making judgments about performance, utilizing information, changing and improving organization, program, etc) Linkages Networks (type, nature, number, utility, recruitment of appropriate members, coordination, participatory governance, management structure, technology, donor support, cost-benefit, sustainability) Partnerships (type, nature, number; utilization, cost-benefit, needs met, sustainability) External Communication (type, nature, number, utilization, frequency, cost-benefit, needs met)

21

Weakness (-)

Not Addressed (NA)

Organizational Planning

Fiscal Health

Organizational Planning

Top 10 Reasons Organizations Should Engage in Business Planning 1.

Provides an opportunity to develop or clarify organizational mission and vision.

2.

Helps the organization establish or re-examine its legal structure and organizational governance (boards, advisory committees, and reporting).

3.

Provides an analysis of the organization’s target population including client characteristics and needs.

4.

Challenges the organization you to engage in a competitive self-analysis, including identifying competitors, the nature of the competition, and the changes in industry.

5.

Challenges the organization to examine its current and future products and/or services, including how products and services are positioned, as well as their overall competitive nature.

6.

Forces the organization to lay out its value proposition (i.e. a specific description of its competitive advantages).

7.

Facilitates development and/or clarification of the organization’s marketing strategy, including advertising and public relations.

8.

Challenges the organization to examine its operations, including personnel, technology, and facilities.

9.

Provides an opportunity to establish a resource allocation plan to support product development and/or service delivery.

10. Assists in developing long-term business goals (both financial and non-financial), as well as an overall monitoring and assessment strategy.

22

Fiscal Health

Sample Characteristics ■ Reputation ■ Gaps in ■ Cash Flow Capabilities ■ Morale ■ Leadership

Sample Characteristics ■ Resources ■ Brand ■ Staff Skills ■ Accreditations ■ Location

Strengths

Weaknesses

1.

1.

2.

2.

3.

3.

4.

4.

5.

5.

Opportunities

Threats

1.

1.

2.

2.

3.

3.

4.

4.

5.

5.

Sample Characteristics ■ External Funding ■ Innovation in ■ Market Demand Technology ■ Political Landscape ■ Increased Competition

Sample Characteristics ■ Industry Trends ■ Technological ■ New Locations Developments ■ Partnerships ■ New Funding Initiatives

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Organizational Planning

SWOT Table Worksheet

Fiscal Health

Organizational Development and Sustainability

Top 10 Tips for Leading Resilient Healthcare Organizations 1.

Coordinate care through the use of information, people, and resources to achieve the best clinical outcomes for patients and clients.

2.

Understand that communication and synergy between the fiscal department and program/clinical service departments are lifelines to a resilient health care organization.

3.

Employ reliability tools to measure health-related processes, procedures, and services, ensuring performance of intended functions in the required time under commonly occurring conditions.

4.

Redesign for success in order to mitigate failures.

5.

Ensure the agency is “coupled,� meaning team members depend on each other to perform tasks across teams.

6.

Rely completely on team strength and resources.

7.

Defer to internal or external expertise.

8.

Give specific consideration to complex communications networks, multiple decision makers, and the adoption of a culture of quality.

9.

Examine the organization’s entire system for ways to enhance performance, efficiency, and patient safety.

10. Implement well-designed information systems and work flow processes that facilitate transferring information clearly and sharing across departments.

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Fiscal Health

1.

Create a unique strategy. There is no one-size-fits-all strategy for effective transitions. Strategies will differ based on an organization’s size, type, and culture.

2.

Know the goal. The ultimate goal in adapting to the changing health care environment is to ensure effective change and effective transition. Transition is the psychological process that staff team members experience when adjusting to new processes, standards, and operations.

3.

Set transition phases. Stage the transition process within three major domains pre-implementation, implementation, and post-implementation. Identify measures of success for each phase.

4.

Ensure stages meet goals. Characteristics of effective transitioning teams include plans and actions that affirm the following during each of the three stages: a) the structure of the organization; b) contributions of individual staff; and c) team processes.

5.

Provide structural supports. Structural supports to effective transitions include a culture that emphasizes transparency, quality, and safety, based on a shared vision and mutually agreed upon goals.

6.

Allocate adequate resources for business planning, training, health information technology [hardware and software], external consultants and vendors, technical support, and end-user education.

7.

Ensure team members exhibit self-knowledge, trust, commitment, and flexibility.

8.

Follow literature on effective transitions that highlights frameworks that emphasize team environment, team structure, team process, and individual contributions.

9.

Establish effective implementation teams called I-Teams to lead the transition process. The teams are led by or supported by executive leadership.

10. Follow the nine considerations for proposed I-Teams: motivation; leadership and vision; value; project management; technology; training and support; costs; integration; and learning.

*The term learning organization refers to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A learning organization has five main features: systems thinking, personal mastery, mental models, shared vision, and team learning. Source: http://en.wikipedia.org/wiki/Learning_organization. August 11, 2013.

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Organizational Development and Sustainability

Top 10 Tips to Transition Healthcare Organizations

Fiscal Health

Organizational Development and Sustainability

Top 10 Financial Sustainability Traits of Successful Nonprofit Healtcare Agencies 1.

Current grants achieve their maximum usefulness.

2.

Funding sources are well diversified, reducing reliance on a single source, such as a government grant.

3.

Operating efficiencies provide a positive monthly cash flow.

4.

Cash/near-cash reserves are equal to three or more months of operating expenses.

5.

Expense/capital management tools, such as budgets and cash flow forecasts, are utilized.

6.

A monthly budget analysis of expense and revenue variations is conducted, with pro-active interventions as needed.

7.

A strong government grant writer, who knows where to look for other funding sources, such as foundations and private donors, is employed.

8.

A large and proactive board drives outside funding and new revenue sources, as well as monitors monthly financial results and forecasts.

9.

Collaborative agreements have been established with other health systems to enhance revenues or reduce costs.

10. A strategic plan is in place that incorporates the above elements, such as a financial sustainability component.

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Fiscal Health

Financial Sustainability Checklist for Healthcare Nonprofits Grants

 Does the organization use a grant writer with a record of success in locating government

and nongovernment grant opportunities, preparing the request and obtaining the funding?

 Does the organization stretch current grant dollars ensuring no leftover funds at grant-end, and obtaining any possible supplements or extensions?

 Does the organization leverage current grants in order to develop other sources of financial support?

 Does the organization use in-kind donations, volunteers, etc., to extend the service base of grants?

Financial Policies and Procedures

 Does the organization operate at maximum efficiency so far as expenses are concerned?  If the organization has capital expenditures, is there a good policy and procedure to assure the best price vs. quality?

 Does the organization operate with a budget that has been properly allocated by month vs. straight-lined?

 Does the organization ever incur a shortage of cash to meet its monthly obligations?  Is a cash flow forecast generated each month covering at least three months in the future?

Full year?

 Is the organization consistently preparing a written monthly revenue and expense variance analysis for the board and management?

 Has the organization been able to maintain at least a three-month cash reserve during the past year?

Other

 Does the organization have good diversity of sources for our funding, i.e., not overly

dependent upon government grants? These would include donations, endowments, fees, Medicaid and Medicare charges, in-kind support, fund-raising events, non-government grants, corporate contributions, internet site, etc.

 Has the organization explored/established collaborative arrangements with other

organizations that may allow an increase in revenues, reduction of expenses, or avoidance of a capital expenditure?

 Can it be said that the organization has a large and proactive Board of Directors that takes a lead role in locating and establishing significant outside funding sources or new revenue opportunities?

 Does the organization have a plan for assured financial health and sustainability built into its strategic plan?

 Is the organization’s financial sustainability plan working, or does it need to be improved?

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Organizational Development and Sustainability

Fiscal Health

NOTES

Fiscal Health

NOTES

Fiscal Health

HealthHIV acknowledges the Fiscal Health Consultants who contributed to this publication: Nokware Adesegun; John Alston; Paul Calabrese; Jacqueline Coleman, MEd, MSM; Ingrid Floyd, MBA; A. Michael Gellman, CPA,; Dr. Julia Hildalgo; Sandra Houston; M. Lee Jenkins, III; and Richard Maycock.

The Fiscal Health: Systems to Sustainability program’s goal is to ensure the fiscal viability and sustainability of Ryan White-funded grantees and nonprofit organizations.

The program provides customized capacity building assistance, regional training, and expert consultations in organizational sustainability, fiscal management and accountability, and diversification of income streams.

E-mail: training@healthhiv.org Telephone: 202.232.6749 Fax: 202.232.6750

Website: www.healthhiv.org @HealthHIV www.Facebook.com/HealthHIV http://www.YouTube.com/HealthHIV http://tinyurl.com/HealthHIVLinked

is a project of Fiscal Health

The Fiscal Health program is funded through a cooperative agreement from HRSA, HIV/AIDS Bureau (HAB)