A comparative study of financial data sources for critical access hospitals: audited financial statements, the Medicare cost report, and the Internal Revenue Service form 990.
OBJECTIVE
Medicare cost reports (MCR), Internal Revenue Service form 990s (IRS 990), and audited financial statements (AFS) vary in their content, detail, purpose, timeliness, and certification. The purpose of this study was to compare selected financial data elements and characterize the extent of differences in financial data and ratios across the MCR, IRS 990, and AFS for a sample of nonprofit critical access hospitals (CAHs).


METHODS
Line items from AFS of 47 CAHs were compared to data reported in the hospitals' MCR and IRS 990s. Line items were based on 9 financial indicators commonly used to assess hospital financial performance.


RESULTS
Of the indicators examined, the equity financing ratio most frequently matched between the 3 reports, while salaries and benefits to total expenses and debt service coverage were often different. Variances were driven by differences in individual account balances used to construct the ratios. Relative to AFS, cash was frequently lower on the IRS 990 while marketable securities and unrestricted investments were often higher. Other revenue and net income were consistently lower on the MCR and IRS 990, and depreciation was often higher on the MCR. The majority of total assets and fund balance (equity) values matched across the 3 reports, suggesting differences in classification among detailed accounts were more common than variances between the component totals (total assets, total liabilities, and fund balance).


CONCLUSIONS
Health policy researchers should consider the impact of these variances on study results and consider ways to improve the availability and quality of financial accounting information.
Health Policy and Management Department, University of North Carolina at Chapel Hill Gillings School of Global Public Health, Chapel Hill, North Carolina 27599-7411, USA.
Alisha Bhadelia
AB
Ozmeral
Kristin L
KL
Reiter
George M
GM
Holmes
George H
GH
Pink
D000066:Accounting / Q000379:methods; D002202:Capital Financing / Q000191:economics / Q000706:statistics & numerical data; D003625:Data Collection; D004469:Economics, Hospital / Q000706:statistics & numerical data*; D005375:Financial Audit / Q000191:economics / Q000379:methods* / Q000706:statistics & numerical data; D006780:Hospitals, Rural / Q000191:economics* / Q000706:statistics & numerical data; D006801:Humans; D006278:Medicare / Q000191:economics* / Q000706:statistics & numerical data; D013660:Taxes / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States