4.12 Payroll variance Subdomain VI.G.3 Explain budget variances Subdomain IV.A.3 Apply principles of healthcare finance for revenue management In anticipation of ICD-10 implementation, you plan to contract with a coding consultant to provide coding services for your outpatient endoscopy and heart-center procedures and have included this in your annual budget. It is expected that this service will be needed for two months while staff become familiar with ICD-10 coding, but you reserve the right to shorten or extend the contract based on circumstances at the time. Payment will be at the rate of $3.50 per chart. The projected volume for the period is 365 charts per week Two weeks after ICD-10 is implemented, you realize that the coding staff can take on the outpatient and heart center procedures earlier than originally anticipated. You give the consultant two weeks' notice that you will be returning the workload to in-house staff At the conclusion of the consultant's service you receive this invoice. Week 1 377 charts coded Week 2 363 charts coded Week 3 358 charts coded Week 4 372 charts coded Total 1,470 charts coded @ $3.50 per chart $5,145.00 e Classify and explain the type of budget variance depicted in this scenario. References Revoir, R. and N. Davis. 2016. Financial Management. Chapter 26 in Health Information Management: Concepts, Principles, and Practice, 5th ed. Oachs, P. and A Watters, eds. Chicago: AHIMA 4.12 Payroll variance Subdomain VI.G.3 Explain budget variances Subdomain IV.A.3 Apply principles of healthcare finance for revenue management In anticipation of ICD-10 implementation, you plan to contract with a coding consultant to provide coding services for your outpatient endoscopy and heart-center procedures and have included this in your annual budget. It is expected that this service will be needed for two months while staff become familiar with ICD-10 coding, but you reserve the right to shorten or extend the contract based on circumstances at the time. Payment will be at the rate of $3.50 per chart. The projected volume for the period is 365 charts per week Two weeks after ICD-10 is implemented, you realize that the coding staff can take on the outpatient and heart center procedures earlier than originally anticipated. You give the consultant two weeks' notice that you will be returning the workload to in-house staff At the conclusion of the consultant's service you receive this invoice. Week 1 377 charts coded Week 2 363 charts coded Week 3 358 charts coded Week 4 372 charts coded Total 1,470 charts coded @ $3.50 per chart $5,145.00 e Classify and explain the type of budget variance depicted in this scenario. References Revoir, R. and N. Davis. 2016. Financial Management. Chapter 26 in Health Information Management: Concepts, Principles, and Practice, 5th ed. Oachs, P. and A Watters, eds. Chicago: AHIMA
