What are the expected rates of reimbursement for this time frame for each payer?Calculating Individual Reimbursement Rates for the 5 Payers (Commercial Medicare Medicaid Liability Self pay / Other
Healthcare Finance: HLTH420 – 1304A 01
Unit3 – Individual Project
500-700 words
Your facility has the following payer mix:
40% commercial insurances = 800
25% Medicare insurance = 500
15% Medicaid insurance = 300
15% liability insurance = 300
5% all others including self-pay = 100
Assume that for the time in question you have 2000 cases in the proportions above. (what are the proportions of the total cases for each payer?)
(Calculated above )
The average Medicare rate for each case is $6200- use this as the baseline. Commercial insurances average 110% of Medicare, Medicaid averages 65% of Medicare, Liability insurers average 200% of Medicare and the others average 100% of Medicare rates. (what are the individual reimbursement rates for all 5 payers?)
Calculating Individual Reimbursement Rates for the 5 Payers (Commercial Medicare Medicaid Liability Self pay / Other
Medicare Rate (Baseline) $6200
Commercial Insurance 110%
Medicaid 65% of Medicare
Liability Insurers 200% of Medicare
Others Average 100% of Medicare Rates
1. What are the expected rates of reimbursement for this time frame for each payer? What is your expected A/R?
2. What rate should you charge for these services (assuming one charge rate for all payers)?(this gives you your total A/R.) Calculate the total charges for all cases based on this rate.
3. What is the difference between the two A/R rates above? Can you collect it from the patient? What happens to the difference?
Rate to be charged for Services $12,400 *125% Total= $15,500 2000 *$15,500= 31,00,000.00You may not collect over R/C contracted fees if you are a Participating Provider. However you would be able to collect on a self-pay patient.Differences would need to be a write-off. Cost Fixed Variable Direct IndirectMaterials/Supplies Variable Direct Wages Fixed Direct Utility/Building Variable Indirect Medications Variable Direct Licensing of Facility Fixed Indirect Insurances Fixed Indirect PerDiem Staff Variable Direct Materials/Supplies $ 2,270.00 Wages $ 2,000.00 Utility/Building 1,125.00 Insurances $ 175.00 TFC/TVC $2,175.00 $3,395.00 Contribution Margin $14,105,XXX-XX-XXXX000 $5,565,000.00 CM per case (NNN) NNN-NNNN2000 $2,782.50 BREAK EVEN $2600000/$2782.5 934.41 $150,000 PROFIT 150,000=2782.50V -(NNN) NNN-NNNN P=(V x AR) – TFC V= (NNN) NNN-NNNN The only payers possible to use for an NIC
4. Which of these costs are fixed (does not change z)? Which are variable(changes)? Direct or indirect? Your costs can be either direct or indirect, which is a description of how they are associated with production. (Direct costs are associated with specific units while indirect costs are a lump sum that goes into doing business in general and cannot be easily measured with the production of a specific thing).
o materials/supplies (gowns, drapes, bedsheets) variable indirect
o Wages (nurses, technicians) fixed indirect
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