You are going to create the three scenarios now by calculating the Adjusted PMPM Cost (column H) and Inflation Adjusted PMPM Cost (column I) for each item Case study 5

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Home>Business & Finance homework help>Accounting homework help> You are going to create the three scenarios now by calculating the Adjusted PMPM Cost (column H) and Inflation Adjusted PMPM Cost (column I) for each item Case study 5

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CASE 5 Student Version Copyright 2010
8/18/09 by FACHE
BLUE POINTE HEALTHCARE
Premium Development
This case illustrates the development of a premium rate by a managed care plan for submission of
a bid to furnish healthcare services to employees of a buyer consortium.
This model differs from most models in that much of the input data required is in the MODEL-
GENERATED DATA section. All input values in the student version have been replaced with zeros.
Thus, students must enter the appropriate input data into the red cells containing a zero or hyphen.
When this is done, any error cells will be corrected and the base case solution will appear. However,
the model does not contain any scenario analyses, so students will have to create their own if
necessary. Furthermore, students must create their own graphics output (charts) as needed to
present their results.
Note that the historical cost input data for facilities services is the per deim reimbursement rate for
inpatient acute care, the daily cost for skilled nursing facility care, the daily cost for inpatient mental
health care, the per case cost for hospital-based surgery, and the per visit cost for emergency room
services.
The historical utilization input data for facilities services is days per member for acute care,
nursing home care, and inpatient mental health care; cases per member for inpatient surgery; and
visits per member for emergency room care.
KEY INPUT: KEY OUTPUT:
Inflation adjustment 5.0% PMPM bid $ 129.48
Administrative expense percent 15.0% Premium rates:
Profit/reserves percent 5.0% Single $ 157.45
Family $ 434.54
OTHER INPUT AND MODEL-GENERATED DATA:
PMPM Calculation:
Historical Historical Base Copay Adjustment Factors Adjusted Inflation Adjusted
Cost Data Utilization PMPM Cost Cost Utilization PMPM Cost PMPM Cost
I. Medical Expenses
Facility Services:
Inpatient:
Acute $ 1,100.00 0.4250 $ 38.96 0.9777 0.9600 $ 36.57
Skilled nursing 650.00 0.0252 1.37 1.0000 1.0000 1.37
Mental health 740.00 0.0644 3.97 0.9768 1.1520 4.47
Substance abuse 0.41 1.0000 1.0000 0.41
Surgical procedures 1,800.00 0.0417 6.26 0.9231 1.0000 5.77
Emergency room 250.00 0.1320 2.75 0.9429 0.9850 2.55
Outpatient procedures 3.43 1.0000 1.0000 3.43
Total facility services PMPM amount $ 57.14 $ 54.57 $ 57.30
Physician Services:
Primary care $ 14.17 0.8593 0.9500 $ 11.57
Specialist care
Office visits 11.58 0.7795 0.9460 8.54
Surgical services 9.00 0.9544 1.0000 8.59
All other services 23.67 0.8659 0.9100 18.65
Total physician services PMPM amount $ 47.35 $ 49.71
Total medical PMPM amount $ 107.01
II. Other Expenses
Administrative $ 16.05
Reserves 5.35
Total other expenses $ 21.40 $ 22.47
Total PMPM amount $ 129.48
III. Premium Rates
Single Family
Rate factor 1.216 3.356
Monthly premium rate $157.45 $434.54
END

High Premium

CASE 5 Student Version Copyright 2010
8/18/09 by FACHE
BLUE POINTE HEALTHCARE
Premium Development
This case illustrates the development of a premium rate by a managed care plan for submission of
a bid to furnish healthcare services to employees of a buyer consortium.
This model differs from most models in that much of the input data required is in the MODEL-
GENERATED DATA section. All input values in the student version have been replaced with zeros.
Thus, students must enter the appropriate input data into the red cells containing a zero or hyphen.
When this is done, any error cells will be corrected and the base case solution will appear. However,
the model does not contain any scenario analyses, so students will have to create their own if
necessary. Furthermore, students must create their own graphics output (charts) as needed to
present their results.
Note that the historical cost input data for facilities services is the per deim reimbursement rate for
inpatient acute care, the daily cost for skilled nursing facility care, the daily cost for inpatient mental
health care, the per case cost for hospital-based surgery, and the per visit cost for emergency room
services.
The historical utilization input data for facilities services is days per member for acute care,
nursing home care, and inpatient mental health care; cases per member for inpatient surgery; and
visits per member for emergency room care.
KEY INPUT: KEY OUTPUT:
Inflation adjustment 5.0% PMPM bid $ 142.49
Administrative expense percent 15.0% Premium rates:
Profit/reserves percent 5.0% Single $ 173.27
Family $ 478.19
OTHER INPUT AND MODEL-GENERATED DATA:
PMPM Calculation:
Historical Historical Base Copay Adjustment Factors Adjusted Inflation Adjusted
Cost Data Utilization PMPM Cost Cost Utilization PMPM Cost PMPM Cost
I. Medical Expenses
Facility Services:
Inpatient:
Acute $ 1,100.00 0.4250 $ 38.96 1.0000 1.0000 $ 38.96
Skilled nursing 650.00 0.0252 1.37 1.0000 1.0000 1.37
Mental health 740.00 0.0644 3.97 1.0000 1.2500 4.96
Substance abuse 0.41 1.0000 1.0000 0.41
Surgical procedures 1,800.00 0.0417 6.26 1.0000 1.0000 6.26
Emergency room 250.00 0.1320 2.75 1.0857 1.0250 3.06
Outpatient procedures 3.43 1.0000 1.0000 3.43
Total facility services PMPM amount $ 57.14 $ 58.44 $ 61.36
Physician Services:
Primary care $ 14.17 1.0352 1.0150 $ 14.89
Specialist care
Office visits 11.58 1.0000 1.0000 11.58
Surgical services 9.00 0.9544 1.0000 8.59
All other services 23.67 0.8659 0.9100 18.65
Total physician services PMPM amount $ 53.71 $ 56.39
Total medical PMPM amount $ 117.76
II. Other Expenses
Administrative $ 17.66
Reserves 5.89
Total other expenses $ 23.55 $ 24.73
Total PMPM amount $ 142.49
III. Premium Rates
Single Family
Rate factor 1.216 3.356
Monthly premium rate $173.27 $478.19
END

Low Premium

CASE 5 Student Version Copyright 2010
8/18/09 by FACHE
BLUE POINTE HEALTHCARE
Premium Development
This case illustrates the development of a premium rate by a managed care plan for submission of
a bid to furnish healthcare services to employees of a buyer consortium.
This model differs from most models in that much of the input data required is in the MODEL-
GENERATED DATA section. All input values in the student version have been replaced with zeros.
Thus, students must enter the appropriate input data into the red cells containing a zero or hyphen.
When this is done, any error cells will be corrected and the base case solution will appear. However,
the model does not contain any scenario analyses, so students will have to create their own if
necessary. Furthermore, students must create their own graphics output (charts) as needed to
present their results.
Note that the historical cost input data for facilities services is the per deim reimbursement rate for
inpatient acute care, the daily cost for skilled nursing facility care, the daily cost for inpatient mental
health care, the per case cost for hospital-based surgery, and the per visit cost for emergency room
services.
The historical utilization input data for facilities services is days per member for acute care,
nursing home care, and inpatient mental health care; cases per member for inpatient surgery; and
visits per member for emergency room care.
KEY INPUT: KEY OUTPUT:
Inflation adjustment 5.0% PMPM bid $ 118.32
Administrative expense percent 15.0% Premium rates:
Profit/reserves percent 5.0% Single $ 143.88
Family $ 397.08
OTHER INPUT AND MODEL-GENERATED DATA:
PMPM Calculation:
Historical Historical Base Copay Adjustment Factors Adjusted Inflation Adjusted
Cost Data Utilization PMPM Cost Cost Utilization PMPM Cost PMPM Cost
I. Medical Expenses
Facility Services:
Inpatient:
Acute $ 1,100.00 0.4250 $ 38.96 0.9642 0.9200 $ 34.56
Skilled nursing 650.00 0.0252 1.37 1.0000 1.0000 1.37
Mental health 740.00 0.0644 3.97 0.9532 0.8762 3.32
Substance abuse 0.41 1.0000 1.0000 0.41
Surgical procedures 1,800.00 0.0417 6.26 0.8077 1.0000 5.05
Emergency room 250.00 0.1320 2.75 0.8000 0.9550 2.10
Outpatient procedures 3.43 1.0000 1.0000 3.43
Total facility services PMPM amount $ 57.14 $ 50.23 $ 52.75
Physician Services:
Primary care $ 14.17 0.6834 0.8900 $ 8.62
Specialist care
Office visits 11.58 0.6692 0.9080 7.04
Surgical services 9.00 0.9544 1.0000 8.59
All other services 23.67 0.8659 0.9100 18.65
Total physician services PMPM amount $ 42.89 $ 45.04
Total medical PMPM amount $ 97.78
II. Other Expenses
Administrative $ 14.67
Reserves 4.89
Total other expenses $ 19.56 $ 20.53
Total PMPM amount $ 118.32
III. Premium Rates
Single Family
Rate factor 1.216 3.356
Monthly premium rate $143.88 $397.08
END