Section 442.22 - Related organizations

442.22 Related organizations. (1430) A hospital itself may be subsidiary to or under the control of a larger organization such as a university, governmental entity or parent corporation. It is typical in such situations for hospitals to receive services from these related organizations. Examples of services received are administration, purchasing, general accounting and menu planning. In addition, related organizations lease property, plant and equipment to hospitals as well as paying for various other items such as insurance. The related organization then usually charges for the service either directly or through a management fee. For uniform reporting purposes the direct charges must be reported as purchased services in the appropriate functional cost centers as billed, and the management fee must be reported in the functional cost centers in amounts relative to the services received for which the fee is paid.
 

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