Dade Home Health Agency was incorporated to do business in the State of Nevada in 2015 . The for-profit agency provides private duty nursing services and home health visit services to highrisk pediatric patients in the Las Vegas area. The Agency has experienced substantial growth in the past year. The owners, Melody and Donna, feel they spend an enormous amount of time on home health visit matters and that the revenue billed in relation to that of private duty nursing is very small. Indeed, they don't know if they are making any money on this part of their business. In 2018, the agency generated 4,800 home health visits. You have been retained by the Agency to prepare a cost analysis of the home health visit portion of their practice. You have promised them you would provide them with the following information: - A break-even analysis of the home health visit practice - A schedule of annual visits listing the projected profits/losses for various levels of activity - Your recommendations to improve this portion of the business (if they wish to continue the home health visit portion of their business) After you visit to the Agency, you have compiled the following information: 1. The Agency bills $160.00 for each home health visit 2. It is estimated that 13% of the billed rate will be written off to contractual allowances and free care 3. For each home health visit, the home health nurse receives a visit salary of $65.00 plus employee benefits 4. Home health nurses are considered to be employees of the Agency. The Agency, in addition to the $65.00 visit fee pays the following payroll taxes for each nurse: - Medicare Tax .0145 of salary - Social Security (FICA) .062 of the first $128,400 of salary - Federal Unemployment (FUTA) .008 of the first $7,000 of salary - State Unemployment (SUI) .0600 of the first $12,000 of salary Since most of the nurses work part-time in this portion of the business, assume that no home health nurse will reach the maximum annual wages for any of the payroll taxes. Therefore, each visit would have these taxes paid by the Agency. Management and Office staff would be subject to the maximum limitations of these payroll taxes. Dade Home Health Agency was incorporated to do business in the State of Nevada in 2015 . The for-profit agency provides private duty nursing services and home health visit services to highrisk pediatric patients in the Las Vegas area. The Agency has experienced substantial growth in the past year. The owners, Melody and Donna, feel they spend an enormous amount of time on home health visit matters and that the revenue billed in relation to that of private duty nursing is very small. Indeed, they don't know if they are making any money on this part of their business. In 2018, the agency generated 4,800 home health visits. You have been retained by the Agency to prepare a cost analysis of the home health visit portion of their practice. You have promised them you would provide them with the following information: - A break-even analysis of the home health visit practice - A schedule of annual visits listing the projected profits/losses for various levels of activity - Your recommendations to improve this portion of the business (if they wish to continue the home health visit portion of their business) After you visit to the Agency, you have compiled the following information: 1. The Agency bills $160.00 for each home health visit 2. It is estimated that 13% of the billed rate will be written off to contractual allowances and free care 3. For each home health visit, the home health nurse receives a visit salary of $65.00 plus employee benefits 4. Home health nurses are considered to be employees of the Agency. The Agency, in addition to the $65.00 visit fee pays the following payroll taxes for each nurse: - Medicare Tax .0145 of salary - Social Security (FICA) .062 of the first $128,400 of salary - Federal Unemployment (FUTA) .008 of the first $7,000 of salary - State Unemployment (SUI) .0600 of the first $12,000 of salary Since most of the nurses work part-time in this portion of the business, assume that no home health nurse will reach the maximum annual wages for any of the payroll taxes. Therefore, each visit would have these taxes paid by the Agency. Management and Office staff would be subject to the maximum limitations of these payroll taxes
