Applied Sciences

Assignment Exercise 4–1: Contractual Allowances
Physician office revenue for visit code 99214 has a full established rate of $72.00. Of 10 different payers, there are 9 different contracted rates, as follows:
Payer Contracted Rate
FHP $35.70
HPHP 58.85
MC 54.90
UND 60.40
CCN 70.20
MO 70.75
CGN 10.00
PRU 54.90
PHCS 50.00
ANA 45.00
Rates for illustration only.


Required 1. Set up a worksheet with four columns: Payer, Full Rate, Contracted Rate, and Contractual Allowance. 2. For each payer, enter the full rate and the contracted rate. 3. For each payer, compute the contractual allowance
Assignment Exercise 4–2: Revenue Sources and Grouping Revenue
The Metropolis Health System (MHS) has revenue sources from operations, donations, and interest income. The revenue from operations is primarily received for services. MHS groups its revenue first by cost center. Within each cost center the services revenue is then grouped by payer. Required 1. Set up a worksheet with individual columns across the top for six revenue sources (payers): Medicare, Medicaid, Other Public Programs, Patients, Commercial Insurance, and Managed Care Contracts. 2. Certain situations concerning the Intensive Care Unit and the Laboratory are described below. Set up six vertical line items on your worksheet, numbered 1 through 6. Six situations are described below. For each of the six situations, indicate its number (1 through 6) and enter the appropriate cost center (either Intensive Care Unit or Laboratory). Then place an X in the column(s) that represents the correct revenue source(s) for the item. The six situations are as follows: (1) ICU stay billed to employee’s insurance program. (2) Lab test paid for by an individual. (3) Pathology work performed for the state. (4) ICU stay billed to member’s health plan. (5) ICU stay billed for Medicare beneficiary. (6) Series of allergy tests run for eligible Medicaid beneficiary. Headings for your worksheet: Medicare Medicaid Other Public Programs Patients Commercial Insurance Managed Care Contracts (1) (2) (3) (4) (5) (6)
Assignment Exercise 5–1: Grouping Expenses by Cost Center
The Metropolis Health System’s Rehabilitation and Wellness Center offers outpatient therapy and return-to-work services plus cardiac and pulmonary rehabilitation to get people back to a normal way of living. The Rehabilitation and Wellness Center expenses include the following: • Nursing Salaries • Physical Therapist Salaries • Occupational Therapist Salaries • Cardiac Rehab Salaries • Pulmonary Rehab Salaries • Patient Education Coordinator Salary • Nursing Supplies • Physical Therapist Supplies • Occupational Therapist Supplies • Cardiac Rehab Supplies • Pulmonary Rehab Supplies • Training Supplies • Clerical Office Supplies • Employee Education Required 1. Decide how many cost centers should be used for the above expenses at the Rehabilitation and Wellness Center. 2. Set up a worksheet with individual columns across the top for the cost centers you have chosen. 3. For each of the expenses listed above, indicate to which of your cost centers it should be assigned.
Assignment Exercise 5–2
Required Find a listing of expenses by diagnosis or by procedure. The source of the list can be internal (within a healthcare facility of some type) or external (such as a published article, report, or survey). Comment upon whether you believe the expense grouping used is appropriate. Would you have grouped the expenses in another way?

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