Managing reclass definitions

Reclassification is the process of moving dollars from one General Ledger location to another. Unlike overhead allocations that allow you to move only overhead expenses, you can use reclasses to move expenses, statistics, revenue, deductions, and other dollar types from one department or account to another. For example, you can take non-patient revenue and reclass it as a negative expense from one department to another or reclass statistics from one statistical account to another.

Let's say you have a cafeteria in your hospital. You can run a revenue reclass to offset the expenses of the cafeteria with its revenue, and then run an overhead allocation to redistribute any remaining dollars across different In Patient departments.

There are three types of reclass definitions you can create:

• Payroll - Reclass payroll dollars from one department to another
• Account - Reclass dollars from specified accounts to spread across accounts in the same or other departments
• Department - Reclass dollars from specified departments to spread across other departments

Axiom Cost Accounting determines the spread amount by performing the following calculations and applying a reclass rate to each applicable department or account:

• Sum the total number of statistical accounts
• Divide the total source dollars from the accounts (the departments you are moving dollars from) by the total stats to determine a rate per stat
• Multiple the rate by the total number of stats for each department

In the following example, a hospital reclasses $93,365 of expenses from the Radiology division to spread them across separate Radiology departments. The system determines the M1 reclass rate by dividing $93,365 by the key stat of $12,400. This calculates to a reclass rate of $7.53. The system then multiplies $7.53 by the key stat for each department. The Radiology Diagnostics department receives most of the expenses with a total of $26,759.