Nonprofit Accounting $-$ Healthcare unit

Cells shaded in yellow must be filled in by you! If no entry is needed, simply write $"$no entry" in the account name column and $$0$ in the debits$/$credits columns.

$1$ Mt$.$ Helen Hospital billed the state Medicaid program $$365,000$ for services provided at its standard billing rate. The prospective payment system gives Medicaid a $38$ percent discount from these rates.

$2$ The hospital has an arrangement with an HMO to provide hospital care to the HMO's members at a specific rate per member, per month. In April, the HMO paid the hospital $$425,000$

per agreement for patients treated in March. Based on preestablished billing rates, the hospital would have billed the HMO $$487,500.$

$3$ The hospital provided services to patients under "charity care" that cost $$1,315,000$ for the year.

At its standard billing rates, Mt$.$ Helen Hospital provided services to Amity Inc., a third$-$party payer, for $$2,380,000.$ The retrospective billing arrangement with Amity Inc. stipulates that

$4$ the hospital would receive payment at an interim rate of $85$ percent of its established rates, subject to retrospective adjustment based on agreed$-$upon allowable costs. By the end of

the fiscal year, Amity Inc. had paid all the billings. Before issuing its financial statements, the hospital estimated that it would need to refund $$192,000$ to Amity Inc. based on allowable

costs.