A non profit health system is operating assumptions for revenue projection. Use these assumptions to determine the expected gross revenue, contractual allowances and net revenue.

1. Assume physicians see patients 5 days/week

2. Assume physicians work 48 weeks/year

3. Assume the following distribution of E/M visit codes:

a. 25% of total volume are new patients

b. 75% of total volume are existing patients New Patients Medicare Payment Existing Patients Medicare Payment 99201 25% $46 99211 15% $25 99202 30% $78 99212 40% $48 99203 30% $110 99213 30% $79 99204 15% $170 99214 15% $115

4. Assume all patients are fee-for-service, no capitation.

5. Assume commercial charges are Medicare payment x2 (i.e. 99211 =$25 x 2 = $50)

6. Assume Medicaid charges will require a contractual allowance (deduction) of 80% off commercial charges

7. Assume contractual write off of 40% on commercial payers.

8. Assume the following is your payer mix: Commercial 45% Medicare 35% Medicaid 15% Cash 5%

If your Medical Practice is expected to see 15,000 patients next year, what is your expected gross revenue? What would your contractual allowances be? So therefore, what would your net revenue end of being for those 15,000 patients? (you must show your basic work at how you answered each question.) Value of extra credit 35 points.