Medicine Problem Solver - Get Instant Explanations

Respond to the following three problems. Show your work for any calculations performed. Each accurate and complete response is worth 20 points. Problem 1. Formulate your answer based on the below information. The intensity of care delivered dropped from a budgeted case mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs?You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances.BudgetActualInpatient Costs$12,568,500$16,618,350Members42,00042,000Admission Rate0.0700.095Case Mix Index0.900.85Cost per Case (CMI = 1.0)$4,750$4,900Problem 2. Based on the information below, what rate must be set to generate the required $80,000 in profit in the preceding example?You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:Budgeted Procedures10,000Budgeted Cost$400,000Desired Profit$80,000It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:PayerVolume%Discount%Blue Cross204Unity PPO1510Kaiser1010Self Pay54050%Problem 3. What is the amount of variance that is attributed to the difference between the budgeted and actual wage rate per hour?Use the following data to calculate the variances.The following information has been prepared for a home health agency.BudgetActualWage Rate per Hour$16.00$17.00Fixed Hours320320Variable Hours per RelativeValue Unit (RVU)1.01.1Relative Value Units (RVUs)1,0001,200Total Labor Hours1,3201,640Labor Costs$21,120$27,880Cost per RVU$21.12$23.23Budgeted costs at actual volume would be $25,344 ($21.12 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable.