Assignment
You are employed by The Excellent Hospital as a Budget/Financial Analyst and have the assigned the task of preparing the revenue budget for inpatient services for calendar year2019.The following datais provided:
Patient statistics for year ended 2018,based on 55,200 discharges are:
|
Patient Type
|
% Discharges
|
Discharges*
|
ALOS1 |
Pt. Days*
|
|
Medicare
|
53
|
|
11.3
|
|
|
Charge Based Payers
|
10
|
|
5.0
|
|
|
HMO
|
10
|
|
6.0
|
|
|
Self Pay
|
4
|
|
5.0
|
|
|
Medicaid
|
23
|
|
8.0
|
|
a. The hospital's average charge per patient discharge for chargebased payers and self-pay patients in 2018,was $12,000. The hospital is not raising charges in 2019.
b. HMO/managed care contracts on average have per diem rates of $1,500 per day. This rate was previously developed by averaging all the HMO/managed care contracts to develop a composite per diem for planning purposes. The hospital experiences a 4% denial rate due to HMO/managed care plans refusing to pay for certain days of service that were deemed not medically necessary. The average length of stay (LOS) for HMO/managed care patients is 6 days.
c. For purposes of this budget in computing Medicaid revenue, use the following:
The hospital is reimbursed on a DRG system which is different from the Medicare system. The base rate is $5,000 per discharge and is already wage adjusted. The Medicaid CMI=1.25. The capital payment is $3,000 per discharge (has no add-ons) and it is an add-on to the hospital DRG payment.Do not apply any Medicare formulas to Medicaid. You do not have to calculate GME payments for Medicaid since it is already in the base rate.
d. The hospital is in the New York Metropolitan (CBSA) as defined by the Centers for Medicare & Medicaid Services (CMS).
e. Use Federal FY 2019 inpatient Medicare payment rates for the entire calendar year of 2019 (January 1, 2019 to December 31, 2019).
f. The hospital has a residency program. There are 100 primary care interns and residents, 35 specialty-care residents and 15 fellows. The available beds for the hospital are 780. Note: For the purpose of this budget use $ 75,000 as the 1984 base rate for all categories of residents. Use a trend factor of 130% for all categories of residents. For the IME calculation, use the FY 2019 trend factor and formula.
g. Determine if the hospital qualifies for DSH. Medicare SSI days in 2019 were 75,000. Compute the full DSH amount and only use the 25% factor toward the revenue budget and just note that approximately a proportionate amount of 75% will be given to the hospital as uncompensated care payment.
h. The hospital's Medicare case mix for 2018 was 1.5670. It is anticipated that the case mix will increase by 3% due to new surgical procedures being performed at the facility in 2019, however, they do not anticipate any increase in discharge volume.
i. The hospital does not have inpatient rehabilitation or psychiatric units.
j. For Medicare's capital rate, use the FY 2019 PPS capital payment formula.
k. Assume that the Hospital does not anticipate any Medicare cost outlier payments.
Required: Your job is to prepare the 2019 inpatient revenue budget for the hospital.It will be presented to the Chief Financial Officer and eventually the Board. Prepare an executive summary which should give background information on the hospital and how Medicare inpatient reimbursement is structured. Present the budget at a high level by payer type.You may also include other information about the hospital in the summary that you believe will be useful for the board members. It can include new initiatives that the hospital is planning. In addition to text, you may include graphs or pie charts.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.