Please see the attached document.
Student Led Session v19 Unit 5 Worksheet 1. Consider the following utilization and payment rate data from Big City Health Plan at your facility in the past year. Big City pays all inpatients units as per diem rates and all outpatient units as per item rates. Complete this Excel schedule using formulas to calculate the Total Net Revenue (payments) from this contract. Format your cells with a dollar sign and no decimal points (these numbers are in thousands). 2. Next, assume that the agreement with Big City will expire in 60 days and they have initiated negotiations with you for the next contract. They propose the following terms: · A decrease in outpatient rates by 5%. · An increase in inpatient rates of 3%. · Clean claims must be submitted within 45 days or they will be denied for timely filing. · Inpatient stays must be pre-certified after the first day. · Clean claims must be paid within 45 days. (They are currently paying in an average of 53 days.) a. Insert an Excel table here, then copy and paste your Excel table from #1 above into this table. Calculate the effect of the payer’s proposal by changing the payment rates and calculating the proposed total net revenues. b. Are there revenue cycle procedures that you need to address if you accept the proposal? List them and explain how you would address them. 3. As you know from this week’s readings and lectures, knowing YOUR data when negotiating a new contract with a payer is critical for success. You know personnel, supply and other expenses will increase roughly 3% next year due to salary increases and price inflation. Therefore, your net revenues need to increase by 3% from last year to keep pace with these rising expenses. Big City has stated that the 5% decrease in outpatient rates in non-negotiable, but they have implied that they are willing to consider changes to the proposed inpatient rates. a. Calculate the percentage change in inpatient rates to yield a net revenue increase that is 3% above the amount you calculated in part 1 above. i. Calculate your target total net revenues at 3% above the amount from #1: ii. Calculate the target subtotal inpatient net revenues: Target total net revenues - subtotal outpatient net revenues under the new contract proposal. iii. Divide target subtotal inpatient net revenues by original subtotal inpatient net revenues to calculate the percentage increase that you need. iv. How does this compare to their proposed inpatient rate? Do you think that you can successfully negotiate this? Why or why not? b. Insert an Excel table here, then copy and paste your Excel table from #2 above into this table. Double check your results. Change the inpatient rates to be increased by the percentage you just calculated in 3aiii. Use three or more decimal points for the most accuracy.. The outpatient rates should remain the same as in question 2, and your total net revenue should equal the target total net revenues that you calculated in 3ai, although your answer may still be slightly off due to rounding. 4. Finally, examine the utilization from this health plan. Does anything stand out to you? What plan of action would you propose? Service Units (in thousands) Total Gross Revenue (in thousands) Payment/Unit Total Net Revenue (in thousands Inpatient Medical/Surgical 414 917,424$ 1,525$ 917,010$ Service Inpatient ICU 225 1,068,750$ 3,075$ 1,068,525$ Inpatient Medical/Surgical Inpatient Obstetrics 18 161,910$ 4,000$ 161,892$ Inpatient ICU Inpatient Obstetrics Subtotal Inpatient 657 2,148,084$ 8,600$ 2,147,427$ Subtotal Inpatient Outpatient Surgery 29 209,525$ 875$ 209,496$ Outpatient Diagnostics 748 160,072$ 89$ 159,324$ Outpatient Surgery Outpatient ER 1167 2,475,795$ 225$ 2,474,628$ Outpatient Diagnostics Subtotal Outpatient 1944 2,845,392$ 1,189$ 2,843,448$ Outpatient ER Subtotal Outpatient Service Units (in thousands) Total Gross Revenue (in thousands)Payment/Unit Total Net Revenue (in thousands Inpatient Medical/Surgical414917,424$ 1,525$ 917,010$ Service Inpatient ICU 2251,068,750$ 3,075$ 1,068,525$ Inpatient Medical/Surgical Inpatient Obstetrics 18161,910$ 4,000$ 161,892$ Inpatient ICU Inpatient Obstetrics Subtotal Inpatient 6572,148,084$ 8,600$ 2,147,427$ Subtotal Inpatient Outpatient Surgery 29209,525$ 875$ 209,496$ Outpatient Diagnostics748160,072$ 89$ 159,324$