Healthcare Exams

The healthcare industry is one of the most rapidly growing industries in the United States. With a growing, aging population, the demand for healthcare services has increased. As the market is dictating increased demand for services, conversely, healthcare providers are experiencing revenue pressure from regulators and private insurers. This has challenged providers to continually look for ways to control and manage costs while providing patient care. To meet these challenges, providers are looking to banks and other lenders to provide credit for cash flow support, with a provider’s receivables supporting the credit. As a result, these lenders are looking for information and analyses to make informed lending decisions. Through our considerable experience and knowledge of the healthcare industry, the Durkin Group Healthcare Lender Practice Area provides assistance to clients looking to finance such providers. Through our completion of more than 175 field exams in this industry of providers located in 25 states, our experienced staff has the capability to perform due diligence on a variety of companies in the healthcare industry. Each healthcare provider is unique; our professionals can tailor fieldwork and analysis to each specific organization to provide insight into its operations, reporting, and collateral valuation. As an organization, Durkin Group is sensitive to the confidentiality issues associated with healthcare records. Professionals that are assigned to healthcare projects are familiar and compliant with HIPAA (Health Insurance Portability and Accountability Act of 1996) and HITECH (Health Information and Technology for Economic and Clinical Health Act of 2009) regulations.

We offer comprehensive field examination services to our clients. Field examinations include an inspection of a provider’s books and records and an evaluation of working capital accounts, focusing on assets used as collateral for a secured lending facility. Our healthcare field examinations include:

  • Detailed analysis of the underlying healthcare collateral, with a focus on claims receivable from third party payors. Analyses include determining collection/liquidation rates by payor class and revenue to collections analysis in the determination of net realizable value of reported receivables.
  • Proof of service testing and substantiation of collection/liquidity rates via examiner review of payment documentation on a test basis.
  • A review of potential offsets to the collateral including a review of accrued expenses and payables as a result of regulatory audit results and Federal and State repayment rate changes.
  • A review of the entity’s cash cycle, cash flow, and procedures relating to the billing and collection of cash to validate reported revenue and potentially determine a facility repayment term.