All the data is provided #7 and # 8 need help

Community Hospital is a 455 bed hospital. You are starting to look at your sources of revenue for the next year. Assume your hospitals rate is $6743. This includes provisions for the wage index and labor and non-labor rate. Your top 5 MS-DRGs along with the anticipated number of discharges for 2018 are listed below. You will need to look up the MS-DRG weight for these DRGs on the CMS listing. Calculate the projected reimbursement you are scheduled to receive from Medicare.

(10) MS-DRG Description Weight # of Discharges Reimbursement

292 Heart Failure w CC 0.9574 845 5,455,107

470 Major Joint Replacement w/o MCC 2.0671 766 10,676,857

392 Esophagitis, Gastroenteritis and

Misc Digestive Disorders w/o MCC 0.7402 573 2,859,940

194 Simple Pneumonia 0.7028 443 2,099,368

690 Kidney and Urinary Tract Infections w/o MCC 0.7777 343 1,798,703

Total Projected Reimbursement 22,889,975

You anticipate the following activity for 2018 for commercial insurance patients. Using the price information from Elyria Medical Center, calculate the projected reimbursement you are scheduled to receive from commercial insurance patients prior to negotiating a rate.

Category Activity Rate Reimbursement

Nursery 4,552 days 757 3,445,864

ICU/CCU 30,300 days 2994 90,718,200

Semi-private 124,286 days 1350 167,786,100

C-sections: 276 4092 11,129,392

Normal Labor and Delivery 924 3221 2,976,204

Total Projected Reimbursement 266,055,760

A. What will your gross patient revenue be? (2)

Gross patient revenue 288,945,735

Using the numbers above, you have the following assumptions:

1. Assume that your commercial payers have negotiated a 30% discount for their patients. (2) 266,055,760X30%=79,816,728

Commercial Payer Adjusted Rate 186,239,032

2. Medicare will deny 5% of your reimbursement due to poor coding and billing discrepancies.

(2) 1,144,499+22889975X5%

Medicare Adjusted Rate 21,745,476

3. You anticipate providing $300,000 in charity care

4. What is your net patient service revenue based on # 1, 2, and 3 above? (3)

Net Patient Service Revenue 207,684,508

5. Based on past experience, 10% of your net patient service revenue will be uncollectable accounts. What is your anticipated net patient service revenue less your allowance for uncollectable accounts for 2018? (3)

Net Patient Service Revenue (less allowance for doubtful accounts) 186,916,057

6. If your anticipated expenses for 2018 are $73,500,000, what will your net income or loss be? (3)

Net Income (Loss) 113,416,057.07

7. Explain what happens to the difference between gross patient revenues (projected reimbursement) and net patient service revenue less allowance for doubtful accounts (actual reimbursement). Where does that money go? Justify your response.

8. Consider your top 5 DRGs. What can your facility do to maximize the set amount of reimbursement that you will receive. Justify your response.