Case Study Chisos Mountains Medical Center need answers for questions 8 13 8 Our radiology department is in violation of the antitrust statutes by developing a fee schedule using College of American Radiology relative value units (RVUs) You must establish a new RVU system before we can set FY 2021 rates The radiology manager has already completed some of the work and I'll send it over to you see Table IV at the end of this case study Please develop a hospital specific RVU schedule and assign 2021 radiology department rates (Total radiology expenses for 2021, including hospital indirect costs, which must be covered by the department, are projected to be $20 million ) 9 For FY 2021 Develop a statistical budget Develop a revenue budget and four expense budgets in statement ofoperations format including detailed footnotes explaining any changes in the numbers A solution to this question has been requested by another student It will be ready shortly Case Study Chisos Mountains Medical Center 11 Ms Nurse has requested more money for nursing I told her that you would evaluate her proposal and give me a full report 12 Our long term debt represents a 30 year loan taken out in 2000 at 5 percent with options to refinance every ten years If we refinance for the remaining ten years at 2 percent, how much interest expense will we save over the remainder of the loan 13 Provide strategic planning input addressing the following steps in the strategic planning process (assume a ten year planning horizon and the following mission statement The mission of Chisos Mountains Medical Center is to provide high quality, low cost healthcare to everyone ) Note that the board would like to replace our very old hospital with a newer facility during the planning horizon Assess the external environment Assess the internal environment Formulate the vision CASE CHISOS MOUNTAINS MEDICAL CENTER YOUR MEDICAL CENTER 501000 Imagine that it is December 2020 and you have just accepted the chief financial officer (CFO) position at Chisos Mountains Medical Center (CMMC), which includes a 25 bed critical access hospital, a 36 bed long term care facility, and a separate freestanding 24 hour emergency facility You will be reporting to Mr Chief, the CEO Also reporting to Mr Chief are Mr Operator, the chief operating officer (COO) Dr Doctor, the chief medical officer (CMO) and Ms Nurse, the chief nursing officer (CNO) When announcing your appointment, Mr Chief stated that your primary objective in the coming year, which begins January 1, 2021, would be to reverse the ominous financial trend that began in 2019 and continues in 2020 with a $50,000 budgeted operating loss CMMC was built with Hill Burton Funds in 1948 as a 25 bed rural hospital With he help of Medicare and Medicaid funds, 36 long term care beds were added in 1968 In 998, after almost going bankrupt, CMMC was designated a critical access hospital and as been cost based reimbursed from Medicare and Medicaid ever since In 2010, Chisos Mountains Hospital became Chisos Mountains Medical Center with the addition of the ency facility 40 miles west of the hospital in the rugged Chisos and licensedCase MEETING WITH DR DOCTOR The CMO Dr Doctor tells you We only have eight physicians who practice at CMMC, but they have been very loyal to the medical center and the community Most of the physicians are in family practice, though we have one general surgeon and one orthpedic surgeon who also runs a physi cal therapy clinic MEETING WITH MR OPERATOR Mr Operator, the COO and a recent graduate from a program in healthcare administra tion, expresses the following concerns regarding the hospital It's easy to understand how we lost money last year Mr Chief just won't say no Our revenues are down because of the pandemic and our expenses continue to increase While we have applied for COVID 19 relief, that probably will not be enough to get us out of financial trouble Furthermore, we need your help on some potential problems Mr Operator asks you to do the following Note For reference, see corresponding chapters in this textbook as noted at the end of each step, and use the additional information in the tables at the end of the case study Case Study Chisos Mountains Medical Center 467 other operating revenues And when I announced that I was bringing in more business to the hospital by entering into a capitated managed care agreement with the city we get $400 per month per family for taking care of the 20 city employees and their fami Yes, whether they're sick or not MS Nance threw a fit at an executive staff meeting she claimed that my decisions were driving the medical center deeper into the red, and as a result, I had to fire Ms Nance for insubordination That happened in November Mr Chief tells you that while you'll be reporting to him, he expects you to respond to the requests of Mr Operator, Dr Doctor, and Ms Nurse Specifically, he wants you to do the following 9 For FY 2021 Develop a statistical budget Develop a revenue budget and four expense budgets in statement of operations format including detailed footnotes explaining any changes in the numbers (1) Increase rates the maximum allowed and increase expenses the maximum requested (2) Increase rates the maximum allowed and maintain expenses at FY 2020 levels after adjusting for volumes (3) Increase rates the maximum allowed and cut expenses to break even in FY 2021 (4) Increase rates the maximum allowed and cut expenses to recover FY 2020 losses See chapter 14 10 Calculate the financial impact of buying a mobile C Arm and accessories that would cost $100,000, would have a five year useful life, would have a 10 percent salvage value, would have a profit per procedure of $50, and would generate an estimated volume of 200 procedures per year The bank tells me the discount rate should be 10 percent If the project loses money, let me know how many procedures per year we would need to generate to break

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Case Study  Chisos Mountains Medical Center need answers for questions 8 13 8  Our radiology department is in violation of the antitrust statutes by developing a fee schedule using College of American Radiology relative value units (RVUs)  You must establish a new RVU system before we can set FY 2021 rates  The radiology manager has already completed some of the work and I'll send it over to you  see Table IV at the end of this case study   Please develop a hospital specific RVU schedule and assign 2021 radiology department rates  (Total radiology expenses for 2021, including hospital indirect costs, which must be covered by the department, are projected to be $20 million ) 9  For FY 2021    Develop a statistical budget    Develop a revenue budget and four expense budgets in statement ofoperations format including detailed footnotes explaining any changes in the numbers  A solution to this question has been requested by another student  It will be ready shortly  Case Study  Chisos Mountains Medical Center 11  Ms  Nurse has requested more money for nursing  I told her that you would evaluate her proposal and give me a full report  12  Our long term debt represents a 30 year loan taken out in 2000 at 5 percent with options to refinance every ten years  If we refinance for the remaining ten years at 2 percent, how much interest expense will we save over the remainder of the loan  13  Provide strategic planning input addressing the following steps in the strategic planning process (assume a ten year planning horizon and the following mission statement   The mission of Chisos Mountains Medical Center is to provide high quality, low cost healthcare to everyone )  Note that the board would like to replace our very old hospital with a newer facility during the planning horizon    Assess the external environment    Assess the internal environment    Formulate the vision  CASE CHISOS MOUNTAINS MEDICAL CENTER YOUR MEDICAL CENTER 501000 Imagine that it is December 2020 and you have just accepted the chief financial officer (CFO) position at Chisos Mountains Medical Center (CMMC), which includes a 25 bed critical access hospital, a 36 bed long term care facility, and a separate freestanding 24 hour emergency facility  You will be reporting to Mr  Chief, the CEO  Also reporting to Mr  Chief are Mr  Operator, the chief operating officer (COO)  Dr  Doctor, the chief medical officer (CMO)  and Ms  Nurse, the chief nursing officer (CNO)  When announcing your appointment, Mr  Chief stated that your primary objective in the coming year, which begins January 1, 2021, would be to reverse the ominous financial trend that began in 2019 and continues in 2020 with a $50,000 budgeted operating loss  CMMC was built with Hill Burton Funds in 1948 as a 25 bed rural hospital  With he help of Medicare and Medicaid funds, 36 long term care beds were added in 1968  In 998, after almost going bankrupt, CMMC was designated a critical access hospital and as been cost based reimbursed from Medicare and Medicaid ever since  In 2010, Chisos Mountains Hospital became Chisos Mountains Medical Center with the addition of the ency facility 40 miles west of the hospital in the rugged Chisos and licensedCase MEETING WITH DR  DOCTOR The CMO Dr  Doctor tells you  We only have eight physicians who practice at CMMC, but they have been very loyal to the medical center and the community  Most of the physicians are in family practice, though we have one general surgeon and one orthpedic surgeon who also runs a physi  cal therapy clinic  MEETING WITH MR  OPERATOR Mr  Operator, the COO and a recent graduate from a program in healthcare administra  tion, expresses the following concerns regarding the hospital  It's easy to understand how we lost money last year Mr  Chief just won't say no  Our revenues are down because of the pandemic and our expenses continue to increase  While we have applied for COVID 19 relief, that probably will not be enough to get us out of financial trouble  Furthermore, we need your help on some potential problems  Mr  Operator asks you to do the following   Note  For reference, see corresponding chapters in this textbook as noted at the end of each step, and use the additional information in the tables at the end of the case study  Case Study  Chisos Mountains Medical Center 467 other operating revenues  And when I announced that I was bringing in more business to the hospital by entering into a capitated managed care agreement with the city   we get $400 per month per family for taking care of the 20 city employees and their fami  Yes, whether they're sick or not MS  Nance threw a fit at an executive staff meeting  she claimed that my decisions were driving the medical center deeper into the red, and as a result, I had to fire Ms  Nance for insubordination  That happened in November  Mr  Chief tells you that while you'll be reporting to him, he expects you to respond to the requests of Mr  Operator, Dr  Doctor, and Ms  Nurse  Specifically, he wants you to do the following  9  For FY 2021  Develop a statistical budget  Develop a revenue budget and four expense budgets in statement of operations format including detailed footnotes explaining any changes in the numbers  (1) Increase rates the maximum allowed and increase expenses the maximum requested  (2) Increase rates the maximum allowed and maintain expenses at FY 2020 levels after adjusting for volumes  (3) Increase rates the maximum allowed and cut expenses to break even in FY 2021  (4) Increase rates the maximum allowed and cut expenses to recover FY 2020 losses   See chapter 14   10  Calculate the financial impact of buying a mobile C Arm and accessories that would cost $100,000, would have a five year useful life, would have a 10 percent salvage value, would have a profit per procedure of $50, and would generate an estimated volume of 200 procedures per year  The bank tells me the discount rate should be 10 percent  If the project loses money, let me know how many procedures per year we would need to generate to break

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