Your current volume of bioavailable testosterone tests is 50 tests/year sent to the reference lab, which then charges your lab $130 for each bioavailable testosterone test.

This urology group estimates ordering an additional 300 bioavailable testosterone tests annually (or about 1/day), which is an increase over the 50 tests being ordered now.

As mentioned, your staff currently performs the total testosterone test in your lab. The urology group indicate that the in house testing of the new test will provide timely, reflexed results of both total and bioavailable testosterone, which will expedite any necessary treatment for the patient. Unfortunately, before adding the bioavailable testosterone to your test menu, a new analyzer will need to be purchased. This in turn will incur additional direct and indirect cost items prior to full implementation of the analyzer and test itself.

Reimbursement rates to your community laboratory are based on Insurance Payer of your patient population and using the CPT Code 844010 assigned to the bioavailable testosterone test:

Insurance Payer Reimbursement for bioavailable testosterone and % of Total Test Volume

Medicare/Medicaid $53.0 35%

WePayWell $75.00 15%

GoodLuckWithThat $67.50 25%

Other $95.00 15%

Instructions:

Answer the following items in numbered order on the next page and SHOW ALL CALCULATIONS

1. Calculate your current annual expense for your current send-out volume of bioavailable testosterone (total tests x charge for each test):

2. a. Calculate the amount of annual revenue contributed by each Insurance Payer based on current total send-out test volume, reimbursement, and test volume percentages and fill in the table (total tests x reimbursement x % total test volume expressed as a decimal).

b. Determine Annual Overall Total Revenue and fill in the table (sum of the revenues from each Insurance Payer)

c. After determining the current Annual Overall Total Revenue, determine CURRENT profit or loss by using the current annual expense calculated in #1 and fill in the table. (Annual Overall Total Revenue - Annual Expense)

3. Calculate anticipated new annual expense for your total FUTURE send-out volume (Note: future volume = current volume + anticipated future volume) of bioavailable testosterone if you continue to send it for testing at the reference laboratory: