A hospital has contracted with and HMO to provide acute care impatient services

Question

A hospital has contracted with and HMO to provide acute care impatient services for $1000 per day, subject to a 10% withhold. The proposed budget for inpatient services is based upon expected utilization of 600 days per 1,00 members at $1000 per day, or $600,000 per 1,000 members. The hospital risk pool will be split equally between the hospital and a primary care physician group. If only 450 days per 1000 members were utilized in the first year, how much would the hospital be paid per 1000 members?

Explanation / Answer

the hospital be paid per 1000 members for 450 days without withhold = 450,000
the amount subjected to withhold is 45,000 (i.e 10 % of 450,000 = (10/100)* (450,000))
so total amount the hospital be paid = 450,000-45,000 = 405,000

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