What is Program Service Revenue (PSR)?
Program service revenue is defined as the revenue an organization receives from aging services. It EXCLUDES unrelated items such as interest, realized and unrealized gains or losses, special events/activities, charitable contributions and any other services unrelated to our mission. Program revenue activities are “primarily those that form the basis for an organization’s exemption from tax”, according to the IRS. Program service revenue is reported on Line (9) of the 990-form filed with the IRS or may be identified in an organization’s Medicaid cost report or year-end financial statement. Please note: PSR is NOT net revenue. It is gross revenue.
Why Do we Collect PSR?
LeadingAge and LeadingAge Kansas collect PSR to calculate dues similar to a millage system. Millage emphasizes program, not setting of service delivery. Nursing home beds are decreasing as assisted living and housing have increased over the years. With members diversifying into a growing range of services, the association’s growth may be not as “bricks and mortar-based” as it has been in the past. In addition, millage is directly related to the individual member’s experience, taking into account variations due to geography, services provided and annual fluctuations in operations.
How is Millage Calculated?
Millage is calculated as a factor of your program service revenue of your organization.
Once program service revenue is received, LeadingAge calculates national dues and then LeadingAge Kansas dues are a multiplier (2.6%) of national dues which are reflected on your invoice that is mailed annually in November.
What happens if I don’t submit my program service revenue to LeadingAge Kansas?
If no program service revenue is received, dues automatically increase 5% (or more) over previous year’s dues – or LeadingAge Kansas will go to cost report data or public form 990s. We encourage members to provide that information to LeadingAge Kansas on a yearly basis. LeadingAge Kansas has been collecting program service revenue since June 1, 2016. Reminders will be sent through newsletters, personal e-mails and personal phone calls to each organization if it is not received. Our goal is 100%. If you cannot find your PSR, please contact Tina Andres and she will help you.
Do I have to be a member of LeadingAge as well as LeadingAge Kansas?Yes. LeadingAge serves you on the national scale by advocating with congress, CMS and in many different areas. LeadingAge Kansas and LeadingAge National have entered into an agreement that all memberships will be reciprocal. This agreement occurs with each state affiliate in the LeadingAge membership. Each LeadingAge Kansas member Director, Admin or CEO should be receiving weekly communications from LeadingAge National updating you on what is happening in Washington. If you are not receiving information from them or would like to add additional people to their e-mail list, please go to http://my.leadingage.org and set up your account.
What guiding assumptions did LeadingAge Kansas use when determining the state millage rate?
The Board agreed on several fundamental guiding assumptions related to a change in dues structure. First, a switch to millage must be budget neutral and should not be designed to result in a “windfall” for the association. Every member should pay their fair share. Membership should remain accessible to the small member. And finally, value is of foremost importance to members and the association.
I have additional questions. Who should I contact?
Contact Tina Andres at the LeadingAge Kansas offices at 785-233-7443.
