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

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 & Pleurisy W CC

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. Enter your work in the table below(10)

Category

Activity

Rate

Reimbursement

Nursery

4,552 days

757

3445864

ICU/CCU

30,300 days

2994

90718200

Semi-private

124,286 days

1350

167786100

C-sections:

276

4092

11129392

Normal Labor and Delivery

924

3221

2976204

Total Projected Reimbursement

266055760

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

Gross patient revenue

288945735

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

266055760*30%=79816728

266055760-79816728=186239032

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

Medicare Adjusted Rate

22889975*5%=1144499

22889975-1144499=21745476

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

186239032+21745476-300000=207684508

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)

207684508*10%=20768451

207684508-20768451=186916057

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

Net Income (Loss)

186916057-73500000=113416057

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)