INTRODUCTION

The United States Sentencing Guidelines states that an organization shall exercise due diligence to prevent and detect criminal conduct and otherwise promote an organizational culture that encourages ethical conduct and commitment to compliance with the law. The organization’s governing authority must be knowledgeable and ensure that the organization’s compliance program is effective. Individual board members face personal liability for corporate misconduct on an unprecedented scale. Therefore, it is imperative that an entity acquiring a healthcare organization ensure that thorough due diligence is conducted in order to comply with the Federal Sentencing Guidelines.

KEY DEVELOPMENTS

Five major areas demand the attention of healthcare providers: mergers and acquisitions, regulatory compliance, information technology and operational management. Managing the risks associated with these areas is extremely important to the success of every healthcare provider and any entity acquiring a provider. In recent years, mergers and acquisitions have dominated the healthcare industry. According to the publication Modern Healthcare, approximately 600 hospitals have been involved in merger activity in the past four years. The risk factors in a merger, acquisition or joint venture are obvious. With healthcare providers, the risks are compounded. Along with financial institutions and technology firms, healthcare is among the most aggressive industries seeking synergies and economies of scale through merger activity. Healthcare providers are forced to operate on tiny profit margins as out-of-control insurance and regulatory systems coupled with a hyper-competitive marketplace erode profits. Thus, any miscalculation of finances, liabilities, market conditions, or the ability to maintain a productive workforce, can have grave consequences for both the lead organization and the target health system. In fact, over 75 percent of mergers and acquisitions fail to meet expected financial results.
 
HOW DAYLIGHT CAN HELP

Daylight professionals have extensive expertise conducting due diligence reviews in the healthcare industry. We can provide valuable services to any entity or provider including
conducting or coordinating due diligence investigations.

DAYLIGHT HEALTHCARE DUE DILIGENCE SERVICES
INCLUDE:

•    Compliance effectiveness evaluation audit of measurements
•    Design, vendor selection and implementation of a thorough pre-employment screening program to ensure compliance with applicable laws and regulations
•    Due diligence investigations to identify red flags such as undisclosed contingent liabilities, misrepresentations or other issues that could endanger the viability of the proposed transaction
•    Analysis by medical review specialists of all billing and documentation used to arrive at findings
•    Analysis by auditors specializing in healthcare industry to review the auditing methods used to arrive at findings about the organizations

Mergers and Acquisitions

•    Pre-acquisition review to assess billing compliance risks within the acquisition target
•    Accurate valuation of accounts receivable balances which can impact provider sales proceeds
•    Utilization of Computer Assisted Auditing Tools (CAATs) by experienced auditors with technical experience
•    Review of all critical documentation and contracts with legal counsel
•    Review and analysis of
o    Pre-certification requirements with managed care plans
o    Documentation regarding the accuracy of demographic, guarantor and insurance information
o    Information systems, patient accounting systems and medical record systems along with related documentation

For more information, please visit us:
Daylight Forensic & Advisory LLC
www.daylightforensic.com
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it