"A one year (1) financial analysis as a predictive measure/tool projecting the financial performance based on the adoption of the selected health plan and reimbursement model [based on fictitious data and figures]" Module 10: Managed Care Organization (MCO) Team Project “Contracts Review”
You are the new CFO, of UMUC Medical Center, a 120 multi-skilled level three (3) healthcare facility.
You have summoned a team of healthcare and business experts to assist with the process of contract negotiating. Based on the federal mandate of the Affordable Care Act (ACA), prepare a proposal summarizing the team’s final recommendations in preparation for an upcoming meeting..
This is the specific instruction that the professor gave us to make up "financial analysis"
?This is hypothethical analysis.
Financial projections for the specific contract
-Capitation contract vs. PPO discounted fee for service
PMPM rate vs. percent of billed charges
-Consider size of population covered (# of members as opposed to number of patients)
-Consider utilization rates for population and average length of stay Per 10,000 the average utilization is approximately 11% with an average length of stay of 4.8 days
Assume a hypothetical situation in which the contract involves 1,000 members; the annual capitation payment is $350 per member per year (PMPY); the expected number of inpatient stays is 10% of the member population, or 100 admissions per year. The cost per day of hospitalization is averaged at $2,270 (higher in MD). Is the contract viable?
Consider if the capitated payment is less, or the number of hospitalized patients is greater than the average, will the contract be viable.