using the following info please answer the question: Total cost $100,000 Total v
ID: 2675442 • Letter: U
Question
using the following info please answer the question:Total cost $100,000
Total volume 1,000
Average cost $100
Payer volumes
Medicare (payment rate = $95) 400
Medicaid (payment rate = $75) 100
Managed Care # 1 (payment rate = $110) 300
Managed Care # 2 (pay 80% of charges) 100
Uninsured (pay 10% of charges) 100
Total all payers 1,000
Desired net income $5,000
Medicare and Medicaid presently account for 50% of the volume. The hospital wishes to reduce its dependence on government payers. Assume that Medicare volume is reduced to 380 patients and Medicaid volume is reduced to 90 patients. The volume from managed-care plan #1 rises to 320 patients from 300. The volume from managed-care plan #2 increases to 110 patients. Thus, total volume is unchanged at 1,000 visits. What is the new price necessary assuming all other factors are unchanged?
please show work
Explanation / Answer
AC=$100
Fixed price FP TOATL VOLUME =790
Medicare ($95/case)= 38
Medicaid ($75/case)= 90
MCO #1 ($110/case)= 320
CHARGE PAYERS (CH) TOTAL VOLUME =210
MCO #2 (pay 80% charges)= 110
Uninsured (10% of charges)= 100
AVERGE PRICE PAID BY FP PAYERS BY
Pg = ((.38/79) x 95) + ((.09/79) x 75)+ ((.32/79) x 110)=98.80
Unadjusted price
Pe= 100+ (5000/.21) x1000 + 100-98.80 x (0.79 x1000) / .21x1000 =128.32
Write off proportion =((.11/.21) x .2) + (.10/.21) x .9)=0.53
Price =128.32 / 1- 0.53 =$ 273.02
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