Health Finance Applications

*SEE ATTACHED DOC FOR ASSIGNMEN* The following data is provided by your finance colleagues. Use it to complete the chart below.

1. The hospital’s average charge per patient discharge for charge-based payers and self-pay patients in 2021, was $12,000. The hospital is not raising charges in 2022.

1. 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.

1. For purposes of this budget in computing Medicaid revenue, use the following:
   1. The hospital is reimbursed on the APR DRG system which is different from Medicare’s IPPS. 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.

1. For purposes of this budget in computing Medicare revenue, use the remaining:
   1. The hospital is in the New York Metropolitan (CBSA) as defined by the Centers for Medicare & Medicaid Services (CMS). The hospital meets all of Medicare’s quality initiatives.
   2. Use Federal FY 2022 inpatient Medicare payment rates for the entire calendar year of 2022 (January 1, 2022, to December 31, 2022) even though FY 2022 ends September 30, 2022.

1. The hospital has a GME 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 $ 85,000 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 2022 trend factor and formula.

1. Determine if the hospital qualifies for DSH. Medicare SSI days in 2021 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.

1. The hospital’s Medicare case mix for 2021 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 2022, however, they do not anticipate any increase in discharge volume.

1. The hospital does not have inpatient rehabilitation or psychiatric units.

1. For Medicare’s capital rate, use the FY 2022 PPS capital payment formula.

1. Assume that the Hospital does not anticipate any Medicare cost outlier payments.

1. When presenting Medicare revenue in the budget. You should express it as follows:

1. Medicare Inlier amount (including IME and DSH), Capital amount, and Direct GME = Total Medicare Revenue.

1 Average Length of Stay

• * Students to complete discharges and patient days

[1] These are Medicaid (non-Medicare discharges and days