Your facility has the following payer
mix:
40% commercial insurances
25% Medicare insurance
15% Medicaid
insurance
15% liability insurance
5% all others including self-pay


Assume that for the time in question you have 2000 cases in the proportions
above. (what are the proportions of the total cases for each payer?)
The
average Medicare rate for each case is $6200- use this as the baseline.
Commercial insurances average 110% of Medicare, Medicaid averages 65% of
Medicare, Liability insurers average 200% of Medicare and the others average
100% of Medicare rates. (what are the individual reimbursement rates for all 5
payers?)
1) What are the expected rates of reimbursement for this time frame
for each payer? What is your expected A/R?
2) What rate should you charge for
these services (assuming one charge rate for all payers)?(this gives you your
total A/R.) Calculate the total charges for all cases based on this rate.
3)
What is the difference between the two A/R rates above? Can you collect it from
the patient? What happens to the difference?
4) Which of these costs are
fixed? Which are variable? Direct or indirect?
a. materials/supplies (gowns,
drapes, bedsheets)
b. Wages
(nurses, technicians)

c. Utility, building, usage exp (lights, heat, technology)
d.
Medications
e. Licensing of facility
f. Per diem staff
g.
Insurances (malpractice, business etc.)
5) Calculate the contribution margin
for one case (in $) with the following costs for this period, per case:
a.
materials/supplies:
$2270
b.
Wages:
$2000
c. Utility, building, usage
exp: $1125
d.
Insurances (malpractice, business etc.):
$175
6) Using the above information, determine which is fixed and which cost
is variable. Then calculate the breakeven volume of cases in units for this
period.
7) Suppose you want to make $150,000 profit between this period and
next period to fund an expansion to the NICU, how many cases would you have to
see? At what payer mix would this be optimal?

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