U.S. and international accounting rule makers are planning to propose an overhaul of lease accounting which is expected to affect $1.2 trillion in leased assets.

Accounting rules have normally given companies a lot of flexibility in how they record leases for assets. As a result, only certain types of leases appear on the balance sheet while a majority of a company’s leases can be kept off the balance sheet and partially hidden from an investors’ view. The Financial Accounting Standards Board will aim to change all of this by proposing to bring many of these assets, and related liabilities, onto corporate balance sheets. While some investors may welcome the change to lease accounting because it will provide more clarity, many companies are fearful that the change will force their balance sheets to balloon overnight, and change all sorts of leverage and debt ratios, forcing them to renegotiate covenants with their lenders.

To read more on these pending changes click here. To learn how these rules could impact you or your organization, contact REDWs or

According to the University of California, San Francisco, emergency room visits to U.S. hospitals increased more than 23 percent from 1997 to 2007, which is double what researchers expected the rise would be based on population growth. Relatively low reimbursements to physicians who care for patients on Medicaid, the federal-state health program for the poor who meet certain criteria, were believed to be a key factor behind the increase.

This emergency room study raises concerns about the growing strain on America’s safety-net services because of the recession and the impact of the national health care overhaul law. The law will increase coverage to an estimated 16 million Americans by expanding Medicaid programs in 2014, raising questions about whether there will be enough physicians and services to accommodate them.

According to Moody’s Investors Service, the recent 0.4 percent net reduction in inpatient hospital rates announced by the Centers for Medicare and Medicaid Services for federal FY11 is “an unambiguous credit negative for not-for-profit hospitals and a key driver to our maintaining a negative outlook for the industry.” On Oct. 1, the estimated $440 million rate reduction will take place, which is an “extremely rare event.”
Besides the FY11 cuts, hospitals are also challenged with Medicaid rates, tougher negotiations with commercial payers, a sluggish economy and poor volume.

Read more about these cuts in this extended article.

The Patient Protection and the Affordable Care Act has a number of new requirements for tax-exempt hospitals. In response to a request for comments from the Internal Revenue Service, the Healthcare Financial Management Association (HFMA) has submitted comments regarding the application of certain requirements. These comments have the potential to help tax-exempt healthcare providers demonstrate that they are fulfilling their tax-exempt purpose and build upon a high standard of community service.

Additional requirements under the Affordable Care Act include the following:
- Community Health Needs Assessment (CHNA) — Effective for tax years beginning March 23, 2012.
- Financial Assistance Policy
- Limitation on Charges
- Billing and Collection

For further analysis on these additional requirements and for more information about HFMA’s comments, please click here.

An article released on The Hill states that the senate will be asked to approve by unanimous consent settlement of the proposed Cobell Lawsuit (Cobell v. Salazar). It creates a new class to settle land and natural resource mismanagement claims that were never part of the original litigation and not been part of the 14-year-long Cobell lawsuit, which sought only an accounting of individual Indian money (IIM) accounts. If congress approves it, the settlement will consist of two classes: those of the historical accounting class and the new “un-litigated” class — the trust mismanagement class. The first class will receive $1,000 and the second new class will receive $500 and a formula based on the top 10 sums that have filtered through a person’s IIM account.

Learn more about this settlement at www.TheHill.com.