Question

You have recently received a call from Hospital ABC asking for a detailed budget proposal. Hospital ABC is thinking about outsourcing their coding processes to your consulting company. Hospital ABC currently has 100 IP discharges and 200 OP discharges a month and is expecting that number to increase by10% over the next year.

Create a detailed budget for the next year which includes at least the following items:

Capital expenses – indicate any capital needs and cost

Operating expenses – indicate any operating needs and cost

Staffing expenses – indicate number of coding staff needed and costs (HINT: Also, think about supervisory staff or clerical staff that may be assigned to multiple clients as support staff)

Budget variances - things that might happen to increase or decrease the amount

Information you will need

            Encoder fee is $1,000 per quarter per computer

            3% of charts are audited quarterly

            Salaries: Auditor - $32.00 hour

                           IP Coder - $28.00 hour

                           OP Coder - $25.00 hour

            Benefits is an additional 25% of total salary

NOTE: You may have to determine additional expenses such as computers, travel expenses, or overhead expenses. It will be up to your company to determine these figures.

Answer 1

Particulars	Budgeted Quantity	Budgeted Cost
IP Discharges	100
OP Discharges	220
Capital Expenses (W.N.01)		40,000.00
Encoder fees. $1000 per quarter		4,000.00
Operating Expense:
a. Salary to Auditor		3,200.00
b.IP Coder		2,800.00
c.OP Coder		5,500.00
Other Benefits. 25% of (a+b+c)		2,875.00
Total budgeted Costs		58,375.00
Working Notes
(W.N.01) Capital Expenses
Assumed that 4 computers are purchased @ 10,000 per Computer