Reference no: EM131536

The average Medicare rate for each case is $6200- use 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?)

1. What are the expected rates of reimbursement for this time frame for each payer? What is your expected A/R?

2. What rate could you charge for these services (assuming one charge rate for all payers)?(this gives you your total A/R.) Determine the total charges for all cases based on this rate.

3. What is the basic difference between the two A/R rates above? Will you collect it from the patient? What happens to the difference?

4. Which of these costs are fixed? Which are variable? Direct or indirect?
o materials/supplies (gowns, drapes, bedsheets)
o Wages (nurses, technicians)
o Utility, building, usage exp (lights, heat, technology)
o Medications
o Licensing of facility
o Per diem staff
o Insurances (malpractice, business etc.)

5. Determine the contribution margin for one case (in $) with the subsequent 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

6. Using the given information, evaluate which is fixed and which cost is variable. Then determine the breakeven volume of cases in units for this period.

7. Consider you want to make $150,000 profit between this period and next period to fund an expansion to the NICU, how many cases could you have to see? At what payer mix would this be optimal?