Faculty Practice Associates Accounting

The FPA Statement Description

Each item is numbered to correspond with the explanation below in a blank FPA Statement.

1. Fund Number - The fund number is comprised of eight digits. The eight-digit number refers to an income fund statement, which covers the activity of a particular participant or group who use one income account to report their activities.
2. Fund Name - This is either the name of the participant (i.e. Dr. Smith) or a group (i.e. Radiology Associates) or a department (i.e. Rehabilitation Medicine).
3. Date - The date of statement preparation.
4. Cumulative - The period, which the statement represents, is cumulative from the first day of the calendar year to the end of the quarter. For example, the first quarter's statement may read "1/1/07 - 3/31/07," and the second quarter's statement may read "1/1/07 - 6/31/07."
5. Gross Receipts - from Practice - These receipts represent fees collected from patients seen at Mount Sinai or affiliated institution. (See sub-code 3051 in your fund ledger report.)
6. Gross Receipts - from Other Activities - This represents receipts for income from professional activities such as fees for patients seen off campus.
7. Total Receipts - This total is represented in line 5. and 6. by definition: "income defined as fees and unrestricted monetary donations, for patient-related activities, wherever performed, consultations or any other activity performed on campus or at an institution affiliated with the school, must be deposited either in the Professional Service Plan on the Department Fund". All fees for professional services received from Faculty Practice Associate participants will be deposited in their respective income fund for each participant or group.
8. Special department Allocation - The various percent of total receipts are accrued for use at the discretion of the department. Some department may not assess.
9. School Equalization Fund - 5 percent of total receipts are accrued for use at the discretion of the Dean.
10. Indirect Overhead Expenses - 5.4 percent of the Indirect Overhead Expense covers the following items:
    • Space utilization charge
    • FPA Administrative and Financial Services
    • Malpractice Insurance coverage relating to FPA Practice activities
    • Use of institutional support services
11. Growth Fund - .75 percent Growth Fund is intended to provide funding for the FPA Compliance Program.
12. Renovation Reserve Fund - .25 percent Renovation Reserve Fund is intended to provide funding for updating practice facilities within rules laid down by the Executive Council and FPA participants may apply for support. Funds are allocated by the FPA Executive Council.
13. Direct Overhead Expense - Direct overhead expenses are expenses incurred by participants in their practices, such as secretarial and administrative salaries, fringe benefits, supplies, telephone and answering services, billing services, etc. These expenses are accounted for in a direct overhead account (0265-xxxx). Overhead expenses are determined in one of three ways:
    1. If an FPA participant or group has one income fund number and one direct overhead expense account, the total in the direct overhead expense account is included in line 13. The percentage is derived by dividing the amount on line 13 by the amount on line 7.(Gross receipts)
    2. If FPA participants or group share a direct overhead account, the amount on line 13 is determined as follows. Let's say three individuals share in one direct overhead account and the total in that account is $10,000. The individuals receipts for the three participants are as follows:
    • Dr. X. $50,000
    • Dr. Y 30,000
    • Dr. Z 20,000

    Total $100,000

    The percentage of direct overhead to be applied to each participant's account is $10,000 divided by $100,000 or 10 percent. Overhead for each individual would then be:

    • Dr. X. $50,000 (50,000 x 10 percent)
    • Dr. Y 30,000 (30,000 x 10 percent)
    • Dr. Z 20,000 (20,000 x 10 percent)

    Total $10,000

    3. The third method is, by special agreement, among FPA participants involved, to charge a flat fee or overhead percentage to the gross receipts.
14. Total Assessments - Line 14 is the total of lines 8, 9, 10, 11, 12, and 13.
15. Adjusted Gross Income - Adjusted gross income is the gross receipts (line 7) less the total assessments (line 14).
16. Expenses - Expenses are defined as allowable charges or disbursements that are made against Adjusted Gross Income.
17. Salary - This amount represents a portion of the participant's base salary on which fringe benefits are paid or calculated. An approved personnel action from (PSM 100) is required to implement the salary charged to the practice income.
18. Fringe Benefits - This represents the fringe benefits related to the above salaries, which are charged at a composite rate (varies) to the practice income funds.
19. Salary Reimbursement - Reimbursements to Mount Sinai from outside institution for salary cost of physicians providing service. Balance is typically a negative amount or contra.
20. Bonus - This amount represents Faculty Bonus, which approved by department Chair and Dean.
21. Space - This space costs are allocated to the FPA in the annual administrative Service Agreement: All debt service (principal and interest) on buildings, institutional safety, security, housekeeping, and utilities. The cost of alterations/renovations to the space will follow the Renovation Reserve Fund policy.
22. Malpractice - This malpractice cost are allocated to the FPA under an existing agreement with the Medical Center, FOJP Service Corporation insures clinical practice activities of all full-time clinical faculty, participating in the FPA.
23. FPA Surcharge Adjustment - This FPA Surcharge Adjustment costs are adjustment to overhead after allocation of charges for space and Malpractice.
24. Disability Insurance - This represents charges to the practice income fund for cost of additional disability insurance over the amount provided through institutional program up to a premium limit to $10,000 per annum effective January 1, 2007. Payments are processed through the accounts payable department by check requests payable directly to the insurance company or reimbursed to the participant. All participants must elect to consider these premium payments either taxable on non-taxable. In the event that the decision is made to tax the Disability Insurance Premiums, all taxable payments will be included in the participant's W-2 form. The election forms are available on the FPA Accounting web site.
25. Total Expenses - The amount on this line is the total expenses or the sum of line 17 through 24.
26. Residual Balance - The amount on this line is the Adjusted Gross Income less the Total Expenses or line 15 minus line 25.
27. Division of Residual Balance - Generally, 50 percent of the Residual Balance is allocated for supplements. The balance remaining is allocated to the department.
28. Supplement Available - Unless there is a departmental exception, 50 percent of the Residual Balance (line 26) appears on this line.
29. Department Allocation - The remaining balance of the Residual Balance is placed on this line that is then available to the transferred to the designated Departmental Service Fund.
30. Residual Balance - This line represents the total of line 28 and 29, or the amount available for supplement plus the amount available for transfer to the Departmental Service Fund. The amount on this line must equal the amount on line 27.
31. Amount Available for transfer - This amount on this line is the amount on line 28.
32. Guaranteed Supplement - This amount is Guaranteed Supplement paid to the physician.
33. Transfers Department Allocation - The amount on this line represents the amount transfer to the designated department service fund as Allocation.
34. Transfers Hospital Funding - This amount is the transfer from Hospital funding sources for physician service render to MSH.
35. Transfers Other Funding - This amount is the transfer from Department, School or Grants funding sources for supports.
36. Net Amount available for transfer - The amount is the addition from line 31 to line 35 and net amount available for transfer as of cumulative date (line 4).

Schedule of Accumulated Balances

This section basically details how much is owed to (due from) the participant and the Departmental Service Fund as of a particular date. It also show the calculation of the Net Balance after funding for short falls support.

37. Balance as of 01/01/07 (Prior year) - This amount represents the balance carried forward from the prior period.
38. Amount Available for the period - This amount is the amount available for the current period for the Supplement. (from line 28)
39. Total - This is the total of line 37 and 38 representing the total amounts available from prior and current periods.
40. Less payouts - This line represents all payments made during the period.
41. Short Fall/Due - This amount is balance owe to (due from) the participant.
42. Funding - This amount is funding for Supplement short falls.
43. Balance (current period) - This amount is line 41 less line 42 or the cumulative balance.