1 / 7

ANALYZING YOUR COSTS AND UTILIZATION

ANALYZING YOUR COSTS AND UTILIZATION. STEP 1 - ADJUST EXPENSES. Adjust personnel, operating, depreciation & indirect expenses: Since contract is discounted FFS, certain costs will not be paid to CARE by LifeMet: e.g.. laboratory, pharmacy, medical specialists, radiology

judah
Download Presentation

ANALYZING YOUR COSTS AND UTILIZATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ANALYZING YOUR COSTS AND UTILIZATION

  2. STEP 1 - ADJUST EXPENSES • Adjust personnel, operating, depreciation & indirect expenses: • Since contract is discounted FFS, certain costs will not be paid to CARE by LifeMet: • e.g.. laboratory, pharmacy, medical specialists, radiology • CARE providers must order these services subject to contract’s UR guidelines • Remove those costs from CARE’s general ledger • Determine Revised Functions • e.g.. hire billing manager; retain all current providers

  3. STEP 2 - DETERMINE HOURS PROVIDERS WORK/YEAR FT Employee hrs/year (52 weeks X 40 hrs): 2080 hours Subtract: Vacation (3 weeks): ( 120 ) Paid Holidays (8 days) ( 64 ) Personal Holidays (3 days) ( 24 ) Sick Time (5 days): ( 40 ) Professional Education (5 days) ( 40 ) Hours Available Per Year 1,792 hours

  4. STEP 3 - DETERMINE NUMBER OF CLINICS/YEAR • Medical Clinics based on 3.5 or 4 hours • FT medical provider works 2 clinics/day totaling 7-8 hr/day (depending on patient scheduling) • CARE uses 2 clinics totaling 7 hrs/day • appointments based on 15 minute increments or units • providers have one a.m. or p.m. off each week for admin. time • 1792 hours/4 hour clinics = 448 clinics per yr • 448 clinics x 90% admin time adjustment = 400 clinics per year

  5. STEPS 4 & 5 - DETERMINE HOURS FOR PATIENTS • Step 4: Multiply No. of Clinics x Appointment Scheduled time: 400 clinics x 3.5 hours = 1,400 hours per year seeing patients • Step 5: Apply Units to Available Hours for Patients • CARE schedules appointments in 15 minute increments; level 1 patient is 30 minutes (2 units); level II is 45 minutes ( 3 units) and level III is 1 hour (4 units) 400 hrs/year x 4 units/hour = 5,600 units available to see patients/year

  6. STEP 6 - DETERMINE REVENUES • Compare revenues at full & current utilization • LifeMet pays $40.00 per 15 minute unit • Full utilization: Multiply number of units each chargeable provider has available to see patients times rate paid • 5,600 units/yr x $40.00 = $224.000 revenue • Current Utilization: Multiply number of units each chargeable provider actually provides by $40.00 units • Physician A: 5,000 x $40.00 = $200,000 • NP: 3,500 x $40.00 = $140,000

  7. STEP 7 - DETERMINE PROFIT/LOSS • Compare Revenues versus fee for service costs to determine whether CARE should accept contract • FULL UTILIZATION • Total Expenses $(746,503) • Total Revenues: 756,000 • Profit/(Loss): $ 9,497 • CURRENT UTILIZATION • Total Expenses $(746,503) • Total Revenues 546,000 • Profit/(Loss) $(200,503)

More Related