Auditor's report redesigned for better communication

Do you know what would happen to your company if your CEO suddenly had to resign immediately for personal reasons? Or got seriously ill? Or worse, died? These scenarios, while rare, do happen, and many companies are not prepared. In fact, 45% of US companies do not have a contingency plan for CEO succession, according to a 2020 Harvard Business Review study.  

Do you have a plan for CEO succession? As a business owner, you may have an exit strategy in place for your company, but do you have a plan to bridge the leadership gap for you and each member of your leadership team? Does the plan include the kind of crises listed above? What would you do if your next-in-line left suddenly? 

Whether yours is a family-owned business, a company of equity partners, or a private company with a governing body, here are things to consider when you’re faced with a situation where your CEO has abruptly departed or has decided to step down.  

1. Get a plan in place. First, assess the situation and figure out your priorities. If there is already a plan for these types of circumstances, evaluate how much of it is applicable to this particular circumstance. For example, if the plan is for the stepping down or announced retirement of your CEO, but some other catastrophic event occurs, you may need to adjust key components and focus on immediate messaging rather than future positioning. If there is no plan, assign a small team to create one immediately. 

Make sure management, team leaders, and employees are aware and informed of your progress; this will help keep you organized and streamline communications. Management needs to take the lead and select a point person to document the process. Management also needs to take the lead in demeanor. Model your actions so employees can see the situation is being handled with care. Once a strategy is identified based on your priorities, draft a plan that includes what happens now, in the immediate future, and beyond. Include timetables so people know when decisions will be made.  

2. Communicate clearly, and often. In times of uncertainty, your employees will need as much specific information as you can give them. Knowing when they will hear from you, even if it is “we have nothing new to report” builds trust and keeps them vested and involved. By letting them know what your plan is, when they’ll receive another update, what to tell clients, and even what specifics you can give them (e.g., who will take over which CEO responsibility and for how long), you make them feel that they are important stakeholders, and not just bystanders. Stakeholders are more likely to be strong supporters during and after any transition that needs to take place. 

3. Pull in professional help. Depending on your resources, we recommend bringing in a professional to help you handle the situation at hand. At the very least, call in an objective opinion. You’ll need someone who can help you make decisions when emotions are running high. Bringing someone on board that can help you decipher what you have to work with and what your legal and other obligations may be, help rally your team, deal with the media, and manage emotions can be invaluable during a challenging time. Even if it’s temporary. 

4. Develop a timeline. Figure out how much time you have for the transition. For example, if your CEO is ill and will be stepping down in six months, you have time to update any existing exit strategy or succession plan you have in place. Things to include in the timeline: 

• Who is taking over what responsibilities? 
• How and what will be communicated to your company and stakeholders? 
• How and what will be communicated to the market? 
• How will you bring in the CEO's replacement, while helping the current CEO transition out of the organization? 

If you are in a crisis situation (e.g., your CEO has been suddenly forced out or asked to leave without a public explanation), you won’t have the luxury of time.  

Find out what other arrangements have been made in the past and update them as needed. Work with your PR firm to help with your change management and do the right things for all involved to salvage the company’s reputation. When handled correctly, crises don’t have to have a lasting negative impact on your business.   

5. Manage change effectively. When you’re under the gun to quickly make significant changes at the top, you need to understand how the changes may affect various parts of your company. While instinct may tell you to focus externally, don’t neglect your employees. Be as transparent as you possibly can be, present an action plan, ask for support, and get them involved in keeping the environment positive. Whether you bring in professionals or not, make sure you allow for questions, feedback, and even discord if challenging information is being revealed.  

6. Handle the media. Crisis rule #1 is making it clear who can, and who cannot, speak to the media. Assign a point person for all external inquiries and instruct employees to refer all reporter requests for comment to that point person. You absolutely do not want employees leaking sensitive information to the media. 
 
With your employees on board with the change management action plan, you can now focus on external communications and how you will present what is happening to the media. This is not completely under your control. Technology and social media changed the game in terms of speed and access to information to the public and transparency when it comes to corporate leadership. Present a message to the media quickly that coincides with your values as a company. If you are dealing with a scandal where public trust is involved and your CEO is stepping down, handling this effectively will take tact and most likely a team of professionals to help. 

Exit strategies are planning tools. Uncontrollable events occur and we don’t always get to follow our plan as we would have liked. Your organization can still be prepared and know what to do in an emergency situation or sudden crisis.  Executives move out of their roles every day, but how companies respond to these changes is reflective of the strategy in place to handle unexpected situations. Be as prepared as possible. Own your challenges. Stay accountable. 

BerryDunn can help whether you need extra assistance in your office during peak times or interim leadership support during periods of transition. We offer the expertise of a fully staffed accounting department for short-term assignments or long-term engagements―so you can focus on your business. Meet our interim assistance experts.

Read this if your CFO has recently departed, or if you're looking for a replacement.

With the post-Covid labor shortage, “the Great Resignation,” an aging workforce, and ongoing staffing concerns, almost every industry is facing challenges in hiring talented staff. To address these challenges, many organizations are hiring temporary or interim help—even for C-suite positions such as Chief Financial Officers (CFOs).

You may be thinking, “The CFO is a key business partner in advising and collaborating with the CEO and developing a long-term strategy for the organization; why would I hire a contractor to fill this most-important role?” Hiring an interim CFO may be a good option to consider in certain circumstances. Here are three situations where temporary help might be the best solution for your organization.

Your organization has grown

If your company has grown since you created your finance department, or your controller isn’t ready or suited for a promotion, bringing on an interim CFO can be a natural next step in your company’s evolution, without having to make a long-term commitment. It can allow you to take the time and fully understand what you need from the role — and what kind of person is the best fit for your company’s future.

BerryDunn's Kathy Parker, leader of the Boston-based Outsourced Accounting group, has worked with many companies to help them through periods of transition. "As companies grow, many need team members at various skill levels, which requires more money to pay for multiple full-time roles," she shared. "Obtaining interim CFO services allows a company to access different skill levels while paying a fraction of the cost. As the company grows, they can always scale its resources; the beauty of this model is the flexibility."

If your company is looking for greater financial skill or advice to expand into a new market, or turn around an underperforming division, you may want to bring on an outsourced CFO with a specific set of objectives and timeline in mind. You can bring someone on board to develop growth strategies, make course corrections, bring in new financing, and update operational processes, without necessarily needing to keep those skills in the organization once they finish their assignment. Your company benefits from this very specific skill set without the expense of having a talented but expensive resource on your permanent payroll.

Your CFO has resigned

The best-laid succession plans often go astray. If that’s the case when your CFO departs, your organization may need to outsource the CFO function to fill the gap. When your company loses the leader of company-wide financial functions, you may need to find someone who can come in with those skills and get right to work. While they may need guidance and support on specifics to your company, they should be able to adapt quickly and keep financial operations running smoothly. Articulating short-term goals and setting deadlines for naming a new CFO can help lay the foundation for a successful engagement.

You don’t have the budget for a full-time CFO

If your company is the right size to have a part-time CFO, outsourcing CFO functions can be less expensive than bringing on a full-time in-house CFO. Depending on your operational and financial rhythms, you may need the CFO role full-time in parts of the year, and not in others. Initially, an interim CFO can bring a new perspective from a professional who is coming in with fresh eyes and experience outside of your company.

After the immediate need or initial crisis passes, you can review your options. Once the temporary CFO’s agreement expires, you can bring someone new in depending on your needs, or keep the contract CFO in place by extending their assignment.

Considerations for hiring an interim CFO

Making the decision between hiring someone full-time or bringing in temporary contract help can be difficult. Although it oversimplifies the decision a bit, a good rule of thumb is: the more strategic the role will be, the more important it is that you have a long-term person in the job. CFOs can have a wide range of duties, including, but not limited to:

• Financial risk management, including planning and record-keeping
• Management of compliance and regulatory requirements
• Creating and monitoring reliable control systems
• Debt and equity financing
• Financial reporting to the Board of Directors

If the focus is primarily overseeing the financial functions of the organization and/or developing a skilled finance department, you can rely — at least initially — on a CFO for hire.

Regardless of what you choose to do, your decision will have an impact on the financial health of your organization — from avoiding finance department dissatisfaction or turnover to capitalizing on new market opportunities. Getting outside advice or a more objective view may be an important part of making the right choice for your company.

BerryDunn can help whether you need extra assistance in your office during peak times or interim leadership support during periods of transition. We offer the expertise of a fully staffed accounting department for short-term assignments or long-term engagements―so you can focus on your business. Meet our interim assistance experts.

Editor's note: read this if you are a CFO, controller, accountant, or business manager.

We auditors can be annoying, especially when we send multiple follow-up emails after being in the field for consecutive days. Over the years, we have worked with our clients to create best practices you can use to prepare for our arrival on site for year-end work. Time and time again these have proven to reduce follow-up requests and can help you and your organization get back to your day-to-day operations quickly. 

1. Reconcile early and often to save time.
   Performing reconciliations to the general ledger for an entire year's worth of activity is a very time consuming process. Reconciling accounts on a monthly or quarterly basis will help identify potential variances or issues that need to be investigated; these potential variances and issues could be an underlying problem within the general ledger or control system that, if not addressed early, will require more time and resources at year-end. Accounts with significant activity (cash, accounts receivable, investments, fixed assets, accounts payable and accrued expenses and debt), should be reconciled on a monthly basis. Accounts with less activity (prepaids, other assets, accrued expenses, other liabilities and equity) can be reconciled on a different schedule.
2. Scan the trial balance to avoid surprises.
   As auditors, one of the first procedures we perform is to scan the trial balance for year-over-year anomalies. This allows us to identify any significant irregularities that require immediate follow up. Does the year-over-year change make sense? Should this account be a debit balance or a credit balance? Are there any accounts with exactly the same balance as the prior year and should they have the same balance? By performing this task and answering these questions prior to year-end fieldwork, you will be able to reduce our follow up by providing explanations ahead of time or by making correcting entries in advance, if necessary. 
3. Provide support to be proactive.
   On an annual basis, your organization may go through changes that will require you to provide us documented contractual support.  Such events may include new or a refinancing of debt, large fixed asset additions, new construction, renovations, or changes in ownership structure.  Gathering and providing the documentation for these events prior to fieldwork will help reduce auditor inquiries and will allow us to gain an understanding of the details of the transaction in advance of performing substantive audit procedures. 
4. Utilize the schedule request to stay organized.
   Each member of your team should have a clear understanding of their role in preparing for year-end. Creating columns on the schedule request for responsibility, completion date and reviewer assigned will help maintain organization and help ensure all items are addressed and available prior to arrival of the audit team. 
5. Be available to maximize efficiency. 
   It is important for key members of the team to be available during the scheduled time of the engagement.  Minimizing commitments outside of the audit engagement during on site fieldwork and having all year-end schedules prepared prior to our arrival will allow us to work more efficiently and effectively and help reduce follow up after fieldwork has been completed. 

Careful consideration and performance of these tasks will help your organization better prepare for the year-end audit engagement, reduce lingering auditor inquiries, and ultimately reduce the time your internal resources spend on the annual audit process. See you soon. 

The COVID-19 emergency has caused CMS (Centers for Medicare & Medicaid Services) to expand eligibility for expedited payments to Medicare providers and suppliers for the duration of the public health emergency.

Accelerated payments have been available to providers/suppliers in the past due to a disruption in claims submission or claims processing, mainly due to natural disasters. Because of the COVID-19 public health emergency, CMS has expanded the accelerated payment program to provide necessary funds to eligible providers/suppliers who submit a request to their Medicare Administrative Contractor (MAC) and meet the required qualifications.

Eligibility requirements―Providers/suppliers who:

1. Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s/supplier’s request form,
2. Are not in bankruptcy,
3. Are not under active medical review or program integrity investigation, and
4. Do not have any outstanding delinquent Medicare overpayments.

Amount of payment:
Eligible providers/suppliers will request a specific amount for an accelerated payment. Most providers can request up to 100% of the Medicare payment amount for a three-month period. Inpatient acute care hospitals and certain other hospitals can request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals (CAHs) can request up to 125% of the Medicare payment for a six-month period.

Processing time:
CMS has indicated that MACs will work to review and issue payment within seven calendar days of receiving the request.

Repayment, recoupment, and reconciliation:
The December 2020 Bipartisan-Bicameral Omnibus COVID Relief Deal revised the repayment, recoupment and reconciliation timeline on the Medicare Advanced and Accelerated Payment Program as identified below. 

Application:
Applications for accelerated payments can be found on each MACs' website. CMS has established COVID-19 hotlines at each MAC that are operational Monday through Friday to assist providers with accelerated or advance payment concerns. Access your designated MACs' website here.

The MAC will review the application to ensure the eligibility requirements are met. The provider/supplier will be notified of approval or denial by mail or email. If the request is approved, the MAC will issue the accelerated payment within seven calendar days from the request.

When funding is approved, the requested amount is compared to a database with amounts calculated by Medicare and provides funding at the lessor of the two amounts. The current form allows the provider to request the maximum payment amount as calculated by CMS or a lesser specified amount.

We are here to help
If you have questions or need more information about your specific situation, please contact the healthcare consulting team. We’re here to help.

Read this if you are a leader at a state Medicaid agency.

CMS has delivered nearly  $34 billion, later updated to $51 billion, in the past week to the healthcare providers on the frontlines battling the 2019 novel coronavirus

• The process in which CMS is implementing requests has reduced times of an accelerated or advance payment to four to six days. Previously the timeframe was three to four weeks. 
• To date, CMS has received over 25,000 requests from providers and suppliers for accelerated and advance payments. Of these, CMS has approved over 17,000 requests in the past week. 
• It should be noted that this funding is separate and distinct from the $100 billion provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

CMS issues new wave of infection control guidance based on CDC guidelines to protect patients and healthcare workers 

CMS has issued a series of updated guidance documents focused on infection control to prevent the spread of COVID-19 in a variety of inpatient and outpatient care settings.

• The updated guidance includes a number of updates, notably the option of providing home dialysis training and support services. These are designed to help some dialysis patients stay home during the pandemic.
• In particular, the guidance includes the establishment of Special Purpose Renal Dialysis Facilities (SPRDFs), which can allow dialysis facilities to isolate vulnerable or infected patients.
• For hospitals, psychiatric hospitals and CAHs, the updated guidance provides recommendations on screening and visitation restrictions, discharge to subsequent care locations, as well as staff screening and testing.

CMS acts to ensure US healthcare facilities can maximize frontline workforces to confront COVID-19 crisis 

CMS has temporarily suspended a number of rules in order for hospitals, clinics, and other healthcare facilities to boost their frontline medical staffs.

The CMS guidance focuses on reducing supervision and certification requirements so that practitioners can both be hired rapidly and perform work to the extent of their licensure. CMS guidance allows the following:

• Doctors can now directly care for patients in certain settings without having to be physically present.
• Nurse practitioners may now perform some medical exams on Medicare patients at skilled nursing.

CMS approves additional state Medicaid waivers and amendments to give states flexibility to address coronavirus pandemic

CMS continues to deliver regulatory relief to a number of new states in the form of waivers and state plan amendments.

• In total, CMS has now approved 49 emergency 1135 waivers, 26 state amendments, seven COVID-19 related Medicaid disaster amendments and the first CHIP COVID-related disaster amendment
• The COVID-related Children’s Health Insurance Program (CHIP) disaster amendment is for the State of Maine. 
• CMS has now approved COVID-related Medicaid disaster state plan amendments for North Dakota, Rhode Island, and Wyoming.

HHS authorizes licensed pharmacists to order and administer COVID-19 tests

On April 8, HHS released new guidance under the Public Readiness and Emergency Preparedness Act that authorizes licensed pharmacists to order and administer FDA-approved COVID-19 tests.

• The guidance allows pharmacists to order and administer COVID-19 tests to their patients will provide easier access to testing and will expand testing for healthcare workers and first responders. 

We’re here to help. If you have more questions or want to have an in-depth conversation about your specific situation, please contact the team. 

Read this if you are a leader at a state Medicaid agency.

Here is a summary of information we have gleaned from the Center for Medicare and Medicaid Services (CMS) Administrator Verma’s recent call.

CMS is implementing new rules and waivers that increase provider flexibility and free up resources to deal with a surge in COVID-19 patients. CMS is working with the provider community to provide clarity around specific changes that impact their operations.

• The rulemaking process has been dramatically expedited to accommodate recent and forthcoming regulatory changes
• CMS is in the process of working out details to administer CARES Act provisions, including further regulatory flexibilities, expansion of accelerated payment program, and $100 billion appropriated to reimburse eligible health care providers
• CMS clarifies that the 3-Day Rule Waiver for skilled nursing facilities applies throughout the country and to all patients, regardless of their COVID-19 status

Medicaid Substance Use Disorder Treatment via Telehealth, and Rural Health Care and Medicaid Telehealth Flexibilities Guidance

This informational bulletin is composed of two parts: Rural Health Care and Medicaid Telehealth Flexibilities and Medicaid Substance Use Disorder Treatment via Telehealth.

• The informational bulletin identifies opportunities for telehealth delivery for services to increase access to Medicaid services. It is composed of two parts, Rural Health Care and Medicaid Telehealth Flexibilities and Medicaid Substance Use Disorder (SUD) Treatment Services Furnished via Telehealth
• The bulletin provides SUD guidance around Medication Assisted Treatment (MAT), counseling, high risk populations, and other areas critical to providing SUD services.

Long-Term Care Nursing Homes Telehealth and Telemedicine Tool Kit

CMS is issuing an electronic toolkit regarding telehealth and telemedicine for Long Term Care Nursing Home Facilities.

• The toolkit includes electronic links to sources of information regarding telehealth and telemedicine, including the changes made by CMS over the last week in response to the national health emergency.
• Much of the toolkit’s information is intended for providers who may wish to establish a permanent telemedicine program, but there is information here that will help in the temporary deployment of a telemedicine program as well.
• There are specific documents identified that may be useful in choosing telemedicine vendors, equipment, and software, initiating a telemedicine program, monitoring patients remotely, and developing documentation tools. 

CMS makes regulatory changes to help US healthcare system address COVID-19 patient surge

CMS has issued a number of temporary regulatory waivers and new rules to assist the nation’s healthcare system with improved flexibility.

• Increased hospital capacity. CMS will allow communities to take advantage of local ambulatory surgery centers that have canceled elective surgeries, per federal recommendations.
• Healthcare workforce expansion. CMS’s temporary requirements allow hospitals and healthcare systems to increase their workforce capacity by removing barriers for physicians, nurses, and other clinicians to be readily hired from the local community as well as those licensed from other states without violating Medicare rules.
• Paperwork requirements. CMS is temporarily eliminating paperwork requirements.
• Telehealth in Medicare. CMS will now allow for more than 80 additional services to be furnished via telehealth.

Additional COVID-19 FAQs for state Medicaid and Children's Health Insurance Program (CHIP) agencies

CMS released an update to the COVID-19 FAQs posted on March 18, 2020 related to emergency preparedness and response, eligibility and enrollment flexibilities, benefit flexibilities, cost sharing flexibilities, financial flexibilities, managed care flexibilities, fair hearing flexibilities, health information exchange flexibilities, and COVID-19 T-MSIS coding guidance. Notably:

• States that have CHIP disaster provisions in their state plans can activate these provisions. CMS considers a significant outbreak of an infectious disease to be a disaster. CMS also recommends that states that do not have disaster relief provisions in their CHIP state plans include language that a federal- or governor-declared emergency is considered an event that can trigger the disaster provisions.

States may not suspend use of their AVS, however CMS reminds states that they can rely on self-attestation of assets and verify financial assets using their AVS post-enrollment in Medicaid.

• CMS can help provide technical assistance regarding approaches states can use to rapidly scale telehealth technologies.
• CMS clarified and provided COVID-19 T-MSIS coding guidance.

For more information

We’re here to help. If you have more questions or want to have an in-depth conversation about your specific situation, please contact the team. 

Per CMS, all state Medicaid agencies, including territories, are eligible for the increased Federal Medical Assistance Percentage (FMAP), provided they adhere to the conditions outlined in the Families First Coronavirus Response Act (FFCRA). 

Key takeaways:

• The increase in FMAP will be retroactive to January 1, 2020 and will be available to state Medicaid agencies through the end of the quarter in which the public health emergency for COVID-19 ends.
• This guidance answers some of the following questions for states, including:
  • How long the funding will be available and when it begins
  • What costs are matchable under the enhanced funding 
  • The specific conditions under which states are eligible to claim the funds 
  • What documentation and processes will be needed in order to gain full access to funding

Trump administration releases COVID-19 checklists and tools to accelerate relief for state Medicaid & CHIP programs

In order to assist states as part of the COVID-19 outbreak, the Trump administration has released a number of tools and checklists that constitute a federal authority toolkit to support states in applying for and receiving federal waivers and other key flexibilities for their program. 

Key takeaways:
The tools released today include:

• 1115 Waiver Opportunity and Application Checklist 
  Under this demonstration opportunity states may select from a variety of options to deliver the most effective care to their beneficiaries as a result of COVID-19.
• 1135 Waiver Checklist 
  CMS released a template that states can use to help develop their 1135 Waiver request to temporarily waive certain Medicaid program requirements.
• 1915(c) Appendix K Template 
  Appendix K is a standalone appendix that states can utilize during emergency situations to request an amendment to approved 1915(c) waivers.
• Medicaid Disaster State Plan Amendment (SPA) Template 
  CMS released a SPA template and instruction document dedicated to temporary changes to support COVID-19 response.

CMS issues FAQs on catastrophic health coverage and the coronavirus

A catastrophic health plan may not provide coverage of an essential health benefit prior to an enrollee meeting the deductible for that plan. In order to clarify treatment and coverage of COVID-19 for catastrophic health plans CMS has issued Frequently Asked Questions (FAQs).

Key takeaways:

• Catastrophic plans currently include coverage for the diagnosis and treatment of COVID-19 as they must cover the essential health benefits (EHB) as required by the Patient Protection and Affordable Care Act (PPACA).
• Issuers of catastrophic plans will be able to provide coverage for the diagnosis and treatment of COVID-19 for enrollees who have not yet met their deductible without CMS taking enforcing action.
• The FAQ document encourages states to take an enforcement approach and CMS does not “consider a state to have failed to substantially enforce section 1302(e) of the PPACA if it takes such an approach.”

Relief for clinicians, providers, hospitals, and facilities participating in quality reporting programs in response to COVID-19

CMS is granting exceptions from reporting requirements and extensions for clinicians and providers participating in Medicare quality reporting programs.  

Key takeaways:

• The exceptions include pending dates for measure reporting and data submission for related programs. 
• For data submission deadlines in April and May of 2020, submission of those data will be optional, based on the facility’s choice to report.
• 2019 data submission
  • Deadline extended from March 31, 2020 to April 30, 2020.
  • Deadlines for October 1, 2019 - December 31, 2019 (Q4) 
  • Data submission is optional for inpatient rehabilitation and hospital-acquired conditions.

CMS releases telehealth toolkits for general practitioners and End-Stage Renal Disease (ESRD) providers

CMS has released two toolkits on telehealth which follow the broadened access to Medicare telehealth services under the 1135 waiver authority and Coronavirus Preparedness and Response Supplemental Appropriations Act.

Key takeaways:

• The toolkit consists of electronic links to sources of information pursuant to telehealth and telemedicine. 
• Generally directed towards providers, particularly ones who may be considering a permanent telemedicine program.
• CMS notes that most of the resources were established prior to the current COVID-19 crisis. As a result, there are likely references to rules and regulations whose requirements may have been waived for the duration of the outbreak.

Toolkits:

• General Practitioners
• End-Stage Renal Disease Providers

For more information

We’re here to help. If you have more questions or want to have an in-depth conversation about your specific situation, please contact the team.