# How much is the net revenue per procedure for each payer, and how much is the contractual allowance per procedure for each payer? Practice Exercise 13–III: Contractual Allowance

April 15, 2019
April 15, 2019

#### How much is the net revenue per procedure for each payer, and how much is the contractual allowance per procedure for each payer? Practice Exercise 13–III: Contractual Allowance

Assumptions:
1. Your unit’s gross charges for the period to date amount to \$200,000.
2. The uniform gross charge for each procedure in your unit is \$100.
3. The unit receives revenue from four major payers. For purposes of this exercise, assume the revenue volume from each represents 25% of the total. (The equal proportion is unrealistic, but serves the purpose for this exercise.)
4. The following contractual payment arrangements are in effect for the current period. The percentage of the gross charge that is currently paid by each payer is as follows: Payer 1 = 90% Payer 2 = 80% Payer 3 = 70% Payer 4 = 50%
Q: How many procedures has your unit recorded for the period to date?
Q: Of these, how many procedures are attributed to each payer?
Q: How much is the net revenue per procedure for each payer, and how much is the contractual allowance per procedure for each payer?
Assignment Exercise 13–3
As a follow-up to the previous Practice Exercise, new assumptions are as follows:

1. Your unit’s gross charges for the period to date amount to \$200,000.
2. The uniform gross charge for each procedure in your unit is \$100.
3. The unit receives revenue from four major payers. The number of procedures performed for the period totals 2,000. Of that total, the number of procedures per payer (stated as a percentage) is as follows: Payer 1 = 30% Payer 2 = 40% Payer 3 = 20% Payer 4 = 10%
4. The following contractual payment arrangements are in effect for the current period. The percentage of the gross charge that is currently paid by each payer is as follows: Payer 1 = 80% [Medicare] Payer 2 = 70% [Commercial managed care plans] Payer 3 = 50% [Medicaid] Payer 4 = 90% [Self-pay]
Q: How many procedures are attributed to each payer?
Q: How much is the net revenue per procedure for each payer, and how much is the contractual allowance per procedure for each payer?
Q: How much is the total net revenue for each payer, and how much is the total contractual allowance for each payer?
Assignment Exercise 13–4.1: Forecast Capacity Levels
Review the information in Exhibit 13–1. The exhibit assumes three chairs and one 40-hour RN, for a realistic capacity level of seven patients infused per day.

Required
Prepare another Infusion Center Capacity Level Forecast as follows:

Assume the same three infusion chairs, but add another nurse for either four or six hours per day. How would this change the daily capacity level for number of patients infused per day?

Assignment Exercise 13–4.2
Required
Prepare another Infusion Center Capacity Level Forecast as follows:

Increase the number of infusion chairs to four, and add another nurse for either four or six hours per day. How would this change the daily capacity level for number of patients infused per day

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