Healthcare revenue is often reported to managers by source of the revenue. Table 5-2 presents such a revenue summary. This example covers all types of sources discussed in this section. Both dollar totals and proportionate percentages by source are reported Table 5-2 Sample Monthly Statement of Revenue by Source Summary Year to Date % Private revenue $100,000 2.9 HMO revenue 560,000 16.7 Medicare revenue 1,420,000 42.4 Medicaid revenue 820,000 24.5 Commercial revenue 400,000 12.0 Other revenue 50.000 1.5 Total $3,350,000 100.0% GROUPING REVENUE FOR PLANNING AND CONTROL Grouping revenue by different classifications is an effective method for managers to use the information to plan and to control. In the preceding paragraphs, we have seen revenue reported by source. Other classification examples are now discussed. Table 51 Variations in Physician Office Revenue for Two Visit Codes Visit Codes Payer 99213 99214 FHP $25.35 $35.70 HPHP 42.45 58.85 MC 39.05 54.90 UND 39.90 60.40 CCN 44.00 70.20 MAYO 45.75 70.75 CGN 10.00 10.00 PRU 39.05 54.90 PHCS 45.00 50.00 ANA 38.25 45.00 Rates for illustration only Grouping revenue by care setting recognizes the different sites at which services are delivered. The most basic grouping by care settings is inpatient versus ambulatory services. Exhibit 5-1, however, illustrates a six-way classification of care setting revenues within a health system. In this case, hospital inpatient, hospital outpatient, off-site clinic, skilled nursing facility, home health agency, and hospice are all accounted for. A percentage is shown for each. This type of classification is useful for a brochure or a report that profiles the different types of healthcare services offered by the organization Exhibit 51 Revenues by Care Setting 42%Hospital Inpatient 38%Hospital Outpatient 4%Off-Site Clinic 8%Skilled Nursing Facility 6%Home Health Agency 2%Hospice Service Lines In traditional cost accounting circles, a product line is a grouping of similar products. In the healthcare field, many organizations opt instead for service line terminology. A service line is a grouping of similar services. Strategic planning sometimes sets out service lines. Hospitals A number of hospitals have adopted the major diagnostic categories (MDCs) as service lines. One advantage of MDCs is that they are a universal designation in the United States. MDCs also have the advantage of possessing a standard definition. In another approach to service line classification, a hospital recently updated its strategic plan and settled on five service lines: (1) medical, (2) surgical, (3) women and children, (4) mental health, and (5) rehabilitation (neuro-ortho rehab) (Figure 5-1). Section 2: Complete section two (tab two on the excel spreadsheet) for the second part of the assignment. On the spreadsheet, complete columns B, C and D. In column B, indicated if the payer is publicly sponsored (taxes dollars) or privately sponsored (employer or individual purchased). In column C, list where the funds come to purchase the insurance (federal government, state government, employer expense, etc). In column D, provide a short summary of why the payer is important to healthcare providers. Section 3: Review the six situations located on the third tab of the downloaded spread sheet. Each situation is an unique service provided by a healthcare provider that will be reimbursed by a healthcare payer. In columns B through G for each situation, indicate with an X if the payer listed in each column will reimburse the provider for the healthcare service being provided. For example, for an "ICU stay billed to employee's insurance program," would Medicare, Medicaid, other public programs, patients, commercial insurance or managed care pay for this service? Indicate with an X if the payer would pay for this service. Remember, rows can have multiple Xs since multiple payers can reimburse for the same service. Submission Instructions X File Home Insert Page Layout Formules Allowances and Revenue Worksheet (1) - Excel View Tell me what you want to do Data Review Blonda Alice Share Autofum. Calibri AA BIU.L.S.A. 7 Paste 9 Wrap Text General Merge & Center - $ - % * Conditional Format as Cell Formatting Table Styles Allment Number Insert Delete Format Clipboard Font Sort & Find Filter - Select ting B14 f A D G Medicare Medicaid Other Public Programs Revenue Source Patients Commercial Insurance Managed Care Contracts 2 Cost Center 3 ICU stay billed to employee's Insurance program 4 Lab test paid for by an individual 5 Pathology work performed for the state 6 ICU stay billed to member's health plan 7 ICU stay billed for Medicare beneficiary & Series of allergy tests run for eligible Medicaid beneficiary 9 10 11 R File X Bilonda, Alice & Allowances and Revenue Worksheet (1) - Excel Home Insert Page Layout Formulas Data Review View Tell me what you want to do... Calibri - 11-AA 2. Wrap Text General BIU...A. Merge & Center. S % ..0.99 Conditional Format as Cel 000 Formatting Table Styles Font Alignment Number Styles f Paste Delete- Format - Clipboard Sort & Find & Filter. Select Editing Cells A31 B D 1 Publicly or privately sponsored Sources of funding Strategic importance to healthcare providers 2 Key payer 3 Medicare 4 HMOs 5 Medicaid 6 International travel/payers 7 Health Insurance Exchange 8 Children's Health Insurance Program 9 Veteran Affairs 10 PPOs 11 Commercial Insurance 12 Self Pay 13 14 Healthcare revenue is often reported to managers by source of the revenue. Table 5-2 presents such a revenue summary. This example covers all types of sources discussed in this section. Both dollar totals and proportionate percentages by source are reported Table 5-2 Sample Monthly Statement of Revenue by Source Summary Year to Date % Private revenue $100,000 2.9 HMO revenue 560,000 16.7 Medicare revenue 1,420,000 42.4 Medicaid revenue 820,000 24.5 Commercial revenue 400,000 12.0 Other revenue 50.000 1.5 Total $3,350,000 100.0% GROUPING REVENUE FOR PLANNING AND CONTROL Grouping revenue by different classifications is an effective method for managers to use the information to plan and to control. In the preceding paragraphs, we have seen revenue reported by source. Other classification examples are now discussed. Table 51 Variations in Physician Office Revenue for Two Visit Codes Visit Codes Payer 99213 99214 FHP $25.35 $35.70 HPHP 42.45 58.85 MC 39.05 54.90 UND 39.90 60.40 CCN 44.00 70.20 MAYO 45.75 70.75 CGN 10.00 10.00 PRU 39.05 54.90 PHCS 45.00 50.00 ANA 38.25 45.00 Rates for illustration only Grouping revenue by care setting recognizes the different sites at which services are delivered. The most basic grouping by care settings is inpatient versus ambulatory services. Exhibit 5-1, however, illustrates a six-way classification of care setting revenues within a health system. In this case, hospital inpatient, hospital outpatient, off-site clinic, skilled nursing facility, home health agency, and hospice are all accounted for. A percentage is shown for each. This type of classification is useful for a brochure or a report that profiles the different types of healthcare services offered by the organization Exhibit 51 Revenues by Care Setting 42%Hospital Inpatient 38%Hospital Outpatient 4%Off-Site Clinic 8%Skilled Nursing Facility 6%Home Health Agency 2%Hospice Service Lines In traditional cost accounting circles, a product line is a grouping of similar products. In the healthcare field, many organizations opt instead for service line terminology. A service line is a grouping of similar services. Strategic planning sometimes sets out service lines. Hospitals A number of hospitals have adopted the major diagnostic categories (MDCs) as service lines. One advantage of MDCs is that they are a universal designation in the United States. MDCs also have the advantage of possessing a standard definition. In another approach to service line classification, a hospital recently updated its strategic plan and settled on five service lines: (1) medical, (2) surgical, (3) women and children, (4) mental health, and (5) rehabilitation (neuro-ortho rehab) (Figure 5-1). Section 2: Complete section two (tab two on the excel spreadsheet) for the second part of the assignment. On the spreadsheet, complete columns B, C and D. In column B, indicated if the payer is publicly sponsored (taxes dollars) or privately sponsored (employer or individual purchased). In column C, list where the funds come to purchase the insurance (federal government, state government, employer expense, etc). In column D, provide a short summary of why the payer is important to healthcare providers. Section 3: Review the six situations located on the third tab of the downloaded spread sheet. Each situation is an unique service provided by a healthcare provider that will be reimbursed by a healthcare payer. In columns B through G for each situation, indicate with an X if the payer listed in each column will reimburse the provider for the healthcare service being provided. For example, for an "ICU stay billed to employee's insurance program," would Medicare, Medicaid, other public programs, patients, commercial insurance or managed care pay for this service? Indicate with an X if the payer would pay for this service. Remember, rows can have multiple Xs since multiple payers can reimburse for the same service. Submission Instructions X File Home Insert Page Layout Formules Allowances and Revenue Worksheet (1) - Excel View Tell me what you want to do Data Review Blonda Alice Share Autofum. Calibri AA BIU.L.S.A. 7 Paste 9 Wrap Text General Merge & Center - $ - % * Conditional Format as Cell Formatting Table Styles Allment Number Insert Delete Format Clipboard Font Sort & Find Filter - Select ting B14 f A D G Medicare Medicaid Other Public Programs Revenue Source Patients Commercial Insurance Managed Care Contracts 2 Cost Center 3 ICU stay billed to employee's Insurance program 4 Lab test paid for by an individual 5 Pathology work performed for the state 6 ICU stay billed to member's health plan 7 ICU stay billed for Medicare beneficiary & Series of allergy tests run for eligible Medicaid beneficiary 9 10 11 R File X Bilonda, Alice & Allowances and Revenue Worksheet (1) - Excel Home Insert Page Layout Formulas Data Review View Tell me what you want to do... Calibri - 11-AA 2. Wrap Text General BIU...A. Merge & Center. S % ..0.99 Conditional Format as Cel 000 Formatting Table Styles Font Alignment Number Styles f Paste Delete- Format - Clipboard Sort & Find & Filter. Select Editing Cells A31 B D 1 Publicly or privately sponsored Sources of funding Strategic importance to healthcare providers 2 Key payer 3 Medicare 4 HMOs 5 Medicaid 6 International travel/payers 7 Health Insurance Exchange 8 Children's Health Insurance Program 9 Veteran Affairs 10 PPOs 11 Commercial Insurance 12 Self Pay 13 14