Rebecca McKinley, manager at Draffin & Tucker, LLP, authored the article, “Medical Malpractice Reporting: Implementation Guidance for ASU 2010-24,” that appeared in the VHA Georgia, Inc. December 2012 newsletter. McKinley sheds light on the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2010-24, Healthcare Entities (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries that has been in effect for almost one year.
As the current economic and regulatory environments are changing, McKinley suggests that healthcare financial managers need to consider expanded financial reporting. She explains that ASU 2010-24 requires healthcare entities to report medical malpractice and similar liabilities on a gross basis. “The primary concern and confusion has centered on what information is needed to determine the gross liability and the related receivable, which is dependent on the entity’s type of insurance coverage,” said McKinley.
McKinley explains another element that must be considered is the incurred but not reported (IBNR) reserves. Overall, she states that an entity needs to obtain an understanding of the type of insurance coverage for malpractice and other similar risks to guarantee that consideration has been given for proper evaluation and recording or assets and liabilities under these new guidelines.
To read the entire article, please click here.
For more information on implementation guidance for ASU 2010-24, please contact Rebecca McKinley at rmckinley@draffin-tucker.com.