Understanding Finances in a Service Line Model

The purpose of this paper is to educate practice administrators on service line models and how to financially manage these models. The areas of financial management to be reviewed are financial statements, financial metrics, cost allocation models, budgets, and reporting. At the conclusion of this paper, the practice administrator should be able to define what is a Service Line, describe the internal and external forces that are driving hospitals and group practices to embrace the service line model, identify financial management tools that can assist in supporting Operations staff successfully manage service lines, develop Service Line budgets, and monitor Service Line performance via reports.

MGMA does not endorse any solutions put forth in this paper. The Association urges readers to explore the legal issues – federal, state and local – that may arise from a particular course of action.