URGENT: Budget Analysis and memo
heh96
ZoomMeetingAssignment3.pptxHealth Care Finance
March 16, 2020
Assignment 3
Assignment #2
Break-even Analysis Due Sunday, March 15th
Should MHCBS invest in a multipurpose Senior Center to expend it service offerings to appeal to the growing senior market in the area?
Details of revenue as well as direct and indirect expenses provided in Announcement; formula’s provided in PowerPoint from March 5th Zoom Meeting
To approve the expansion, the Board of MHCBS has two requirements:
Evidence that the expanded program is a benefit to the community
A break-even analysis that indicates MHCBS can recoup its investment in 5 years
Assumptions
Current fiscal year July 1, 2019 – June 30, 2020
Patient Service Revenue
Projected total hospital patient revenue to be under budget by $10 million
Of the projected $1.2 billion in patient services revenue, approximately 57% of the total projected revenue is for in-patient care; the other 43% is for outpatient revenue
The Medical Surgical Budget reflects only in-patient revenue
Yearly budgeted Medical Surgical Dept. in-patient revenue: $50,000,000
As a percent of the total in-patient revenue: 7%
In-patient revenue for the Dept. in the first 6 months is below budget by approximately $1.9 million – is this likely to increase given the information in the Budget Mtg transcript?
Next Fiscal Year July 1, 2020 – June 30, 2021
Assumptions
Projected total hospital revenue to increase by 5% due to marketing and managed care contract negotiation
When projecting revenue take into consideration that Medical-Surgical Dept. will only see increases relative to in-patient revenue
Overall hospital goal is to decrease total spending by up to 5%
Cuts in expenses may be targeted, not all expense categories need to be decreased
2019 – 2020 Medical-Surgical Budget
| 6 Month Revenue | 2019 – 2020 Budget Revenue | FY 2019 - 2020 6 Month Variance |
| $23,123,516 | $50,000,000 | $(1,876,484) |
| 6 Month Expenses | 2019 - 2020 Budget Expenses | FY 2019 Variance |
| $22,433,565 | $40,895,000 | $1,986,065 |
For the first 6 months -- Revenue is below budget, expenses exceed the budget
Budget for Fiscal Year 2019 – 2020
Estimate the revenue and expenses for the Medical – Surgical Dept. through the current month of the current fiscal year – July 2019 thru February 2020 (8 Month Budget projections)
Estimate the revenue and expenses for the Medical-Surgical Dept. for the rest of the 2019-2020 fiscal year based on the assumptions provided in the transcript documents (12 Month Budget Projections)
Detailed Excel Spreadsheet with the 2019-2020 yearly budget and explanation of projections in budget Memo
Total in-patient revenue (take into consideration the percent difference between budgeted vs. actual revenue and make adjustments to account for the projected shortfall in revenue)
Total expenses (Highlight specific categories that are projected to be significantly over budget and make any recommended cuts in specific categories of expenses)
In the Memo, discuss changes in projected revenue, and highlight the rationale for any proposed cuts in select expenses
Your projections will vary from the projected 2019 -2020 budget provided to reflect any changes you may make to revenue and expenses based on the information contained in the Budget Meeting Transcript
2020-2021 Fiscal Year Budget
Prepare a Medical Surgical budget for the next fiscal year – July 1, 2020– June 30, 2021
Detailed Excel spreadsheet providing revenue and expenses by category and discuss revenue and expense projections in budget Memo
Total in-patient revenue (Take into consideration the total projected revenue increases due to contracting and marketing that are projected to benefit the whole hospital – remember the Medical-Surgical budget only includes in-patient revenue)
Detailed Expenses by category
Highlight any percent expense increases and reductions based on the 2019 – 2020 projected yearly budget by category and explain rationale in budget Memo
Assignment Deliverables
Excel Spreadsheets
Projected budget for Fiscal Year 2019 through February 2020 (8 Month Budget)
Projected remaining Fiscal Year 2019-2020 Budget (12 Month Budget)
Revenue and Expenses
Note: Your projections for the yearly budget will differ if you make any changes to the revenue and expenses given the Budget Meeting Transcript
Projected Fiscal Year 2020-2021 Budget
Revenue and Expenses (12 Month Budget)
Budget Memo
Explain rationale for any increases or shortfalls in revenue and the rationale behind any cuts in specific expense categories
Reminder – the fiscal year for this hospital is July 1st thru June 30th
Assignment Due Dates
The due date for submission of Assignment 3 is March 22nd
The due date for submission of Assignment 4 is March 29th
Assignment #4
Using the OIG website (https://oig.hhs.gov/) or another of your choosing, select a real-time healthcare fraud news report from your local area to feature within your paper to educate the organization on the various case(s), the importance of healthcare finance compliance practices and the potential criminal and monetary fines that can be imposed on the individual and/or organization from the case.
Develop a 3-5 page white paper that provides a succinct overview of the specific healthcare finance fraud committed including the details specified at the end of the course syllabus.
Due Sunday, March 29th
