Scenario:

You are an outpatient clinic service line administrator at a large non-profit integrated delivery system. You are holding your monthly service line business meeting. In attendance, there are 5 physicians, 1 PA, 2 nursing team leads, and a non-clinical supervisor. Your meeting agenda includes:

1. System financial review

-FY performance

2. Service line operating update

-Charges/net revenue

-Provider encounters

Your report:

1. Although our overall gross charges stayed about the same, our system had an increase in net patient service revenue from prior year, and our days cash on hand is still higher than the market average. Furthermore, contractual adjustments decreased 5% from prior FY based on new contracting. Our net assets also grew over the same time period, so the systems balance sheet is very strong. Charity care and bad debt also both increased over this period, but were ultimately offset by the increase in revenue.
2. Now focusing on our service line performance, despite our department charges being higher than the previous year, our net revenue has decreased slightly from prior YTD. Our total department encounters did increase in that time period, however. Our payer mix shifted slightly, with Payer A increasing by 10% (to 65% total) and Payer B decreasing by 10% (to 30% total). Payer C made up most of the difference. As you all may know, Payer A reimburses us about 105% of Medicare, whereas Payer B pays us 125% of Medicare.

• Then how is our department revenue down from last year? As you said, we are all seeing more patients than before.

• Is 105% of Medicare better or worse than 125% of Medicare? If a payer reimburses us poorly, why do we see those patients at all?

Question number 2 please