Ealthcare Finance: HLTH420 1403B 02

Research and discuss the differences and importance of : IPPS, OPPS, MPFS and DMEPOS. Which provider type is paid by which method? What are the payment expectations for each type? What is the potential implication of a case mix involving IPPS, OPPS and DMEPOS for a small hospital?
Remember that you MUST have at least 2 credible sources.

Ealthcare Finance: HLTH420 1403B 02

Write a 3-4 page paper (not including title and reference pages) on the following:
Government insurances and payment expectations
Commercial insurances and payment expectations
Liability insurances and payment expectations
Self-pay/cash pay patients and payment expectations.
Focus on the ways in which these types are different from one another and what you as the medical business professional might need to know about the types of programs in order to bill, collect, account and project financial expectations. Do they have different rules? Are the patients responsible for more or less of the balance? Can you reasonably reduce the charges for a self-pay patient? Do you need to be comfortable with contract language for the others?
Consider that your payer mix is the basic determinant for much of your financial projections as you review and prepare this material

Ealthcare Finance: HLTH420 1403B 02

You have been hired in the finance department at a large, metropolitan for-profit hospital. Your duties are very important to the entire hospital in terms of financing operating costs. Additionally, you are also in charge of 3 employees who work under you to help with the day-to-day accounting activities. Your role includes budgeting, managing the general ledger accounts, utilizing financial formulas to perform accounting activities, and training and development of your 3 employees. This professional career is exciting and challenging for you but is also enjoyable and rewarding as you work your way up the career ladder toward reaching your goal of becoming the chief executive officer (CEO) of the hospital. Due to scarce resources, your organization is faced with the decision of choosing between mutually exclusive projects (I.e., Build a Rehab. Center or Build a Neonatal Wing). You have been asked to develop a financial analysis of two projects and based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI), Briefly explain the following concepts and their use/value in assessing the validity of the two mutually exclusive projects:
NPV
ROI
PI
payer (aka case) mix

Ealthcare Finance: HLTH420 1403B 02

Your facility has the following payer mix:
40% commercial insurances
25% Medicare insurance
15% Medicaid insurance
15% liability insurance
5% all others including self-pay

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?)

The average Medicare rate for each case is $6200use 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?)
What are the expected rates of reimbursement for this time frame for each payer? What is your expected A/R?
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.
What is the difference between the two A/R rates above? Can you collect it from the patient? What happens to the difference?
Which of these costs are fixed? Which are variable? Direct or indirect?
materials/supplies (gowns, drapes, bedsheets)
Wages (nurses, technicians)
Utility, building, usage exp (lights, heat, technology)
Medications
Licensing of facility
Per diem staff
Insurances (malpractice, business etc.)
Calculate the contribution margin for one case (in $) with the following costs for this period, per case: a. materials/supplies: $2270 b. Wages: $2000 c. Utility, building, usage exp: $1125 d. Insurances (malpractice, business etc.): $175
Using the above information, determine which is fixed and which cost is variable. Then calculate the breakeven volume of cases in units for this period.
Suppose you want to make $150,000 profit between this period and next period to fund an expansion to the NICU, how many cases would you have to see? At what payer mix would this be optimal?