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
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