HCMG750

Week 4

Assignment: Calculating the reimbursement/revenue

Points: 75

Enter your work where indicated below. Once completed, select File>Download as a Word doc and then submit in Blackboard via Assignments.

Complete questions 7-8 in the designated Discussion Board thread.

Community Hospital is a 455 bed hospital. You are starting to look at your sources of revenue for the next year. Assume your hospital's 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. Enter your work in the table below. (10)

MS-DRG

Description

Weight

# of Discharges

Reimbursement

292

Heart Failure w CC

845

470

Major Joint Replacement w/o MCC

766

392

Esophagitis, Gastroenteritis and Misc Digestive Disorders w/o MCC

573

194

Simple Pneumonia

443

690

Kidney and Urinary Tract Infections w/o MCC

343

Total Projected Reimbursement

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. Enter your work in the table below(10)

Category

Activity

Rate

Reimbursement

Nursery

4,552 days

ICU/CCU

30,300 days

Semi-private

124,286 days

C-sections:

276

Normal Labor and Delivery

924

Total Projected Reimbursement

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

Gross patient revenue

Using the numbers above, you have the following assumptions:

1. Assume that your commercial payers have negotiated a 30% discount for their patients. (2)

Commercial Payer Adjusted Rate

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

Medicare Adjusted Rate

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

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

Net Patient Service Revenue

1. 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)

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

Net Income (Loss)

Enter your responses to # 7 & 8 in the designated discussion board threads.

1. Discussion: 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. Respond to one of your peers. (20)

1. Discussion: Consider your top 5 DRGs. What can your facility do to maximize the set amount of reimbursement that you will receive. Justify your response. Respond to one of your peers. (20)