Good Will General Hospital is introducing a new service that anticipates having 550 patient visits per...

Good Will General Hospital is introducing a new service that anticipates having 550 patient visits per year at an average cost per visit of $2,200 and average billed charges per visit of $4,500. Determine the gross revenue, contractual deductions, net patient revenue, total costs and net operating income that would result given the payer mix and terms in the table below. Please show all of your work to receive credit. This question is worth 10 points.

Payor Class	Number of patient visits	Payment per case	Gross Revenue	Contractual Deductions	Revenue	Total Costs	Net Operating Income

Medicare	350	$2050
Medicaid	200	1,650.00

Expert Solution

				working note
a	b	c	a*b = c	d	c-d = e	f	g
Payor Class	Number of Patient Visits	Payment per Case	Gross Revenue	Contractual Deductions	Revenue	Total Costs	Net Operating Income
Medicare	350	2050.00	717500.00	512272.73	205227.27	512272.73	205227.27
Medicaid	200	1650.00	330000.00	167272.73	162727.27	167272.73	162727.27

Working:	Average Charges for 550 visits
	Average billed per visit	4500.00
-	(Average Cost per visit)	-2200.00
	Average Contractual deductions	2300.00
	for 550 patient visits	2300.00
	for 350 visits	1463.64
	for 200 visits	836.36

-In the given question there is only one cost element i.e Contractual Deductions and no other costs exists so when there are no other costs the average costs equals the total cost.
-Since there are no other additional costs the net revenue equals the operating cost

ekkarill92 answered 2 years ago

General Hospital is introducing a new service that anticipates having 550 patient visits per year at...

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Good Will General Hospital is introducing a new service that anticipates to have 550 patient visits...

Good Will General Hospital is introducing a new service that anticipates to have 550 patient visits per year at an average cost per visit of $2,200 and average billed charges per visit of $4,500. Determine the amount of gross revenue, contractual deductions, net patient revenue, total costs and net operating income that would result for both Medicare and Medicaid. Payor Class Number Pt. visits Payment /case Gross Revenue Contractual Deductions Net Pt Revenue Total Costs Net Operat. Income Medicare 350 $2,050 Medicaid 200 $1,650

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