Question

I'm stuck on question 9

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encounters into two types, admissions and follow-up encounters. The result is the estimate of encounters by payor and type of encounter (Exhibit 10-13c). Exhibit 10-13a coming year Calculation of number of encounters by payor type for the Jan Feb MarApr MayJunulAug Sep OctNov Dec Total total encounters 5,007 4676 5 044 4 686 4seo 4s6 4697 4833 4653 4923 4/34 5.202 57531 Tota! encounters 5,257 4.910 5.296 4,920 4.70 ,826 4.932 sos as6 s,16 4,971 5 462 0.408 for 20x7 from internal records of the organization Exhibit 10-13b Distribution of encounters by payor and encounter type Medicaid/ self-Pay Total Medicare Commercial budgets for a service or program in a health care organization. 9. The statisties budget: forecasting encounters. Instead of its current forecast, ZMG Hospitalist Practice estimates that it will not obtain a major HMO contract, and its encounters for July through December are expected to rise by only 0.5 per- cent a month from the previous year. Assuming these are the only changes to Exhibit 10-13a. prepare a new forecast of the number of encounters that will be made by commercial patients during the whole year 10. The statistics budget: forecasting encounters. Instead of its current forecast, ZMG Hospitalist Practice estimates that its Medicare encounters will increase by 4 percent a month from January through June. In July it will obtain a major con- tract, and its encounters from July through December will go up by 10 percent a month. Assuming these are the only changes to Exhibit 10-13a. prepare a new forecast of the number of encounters that will be made by Medicare patients dur- ing the whole year 11. The statisties budget: RVU-weighted encounters. What are RVU-weighted This section shows how to develop the numbers in a budget, using ZMG Hospitalist Practice as an example. The term a budget really is shorthand for four interrelated budgets: the statistics, operating, cash, and capital budgets. audg 5La The statistics budget is created in three steps: develop an overall volume projection, categorize volume projection by payor and encounter type, and convert encounters to weighted encounters Develop overal volume projection. A common approach to forecasting volume is to begin with the previous year's actual results and make adjustments for antici- pated changes. In the example, the ZMG Hospitalist Practice makes the relatively 446 Budgeting gross assumption of 5 percent overall and monthly growth compared with the cur- rent year (Exhibit 10-13a). Although this approach is common, to the extent that major variations can be expected. a more refined month-by-month projection would help make the budget a better planning tool Categorize volume projections by payor and encounier type. As eventually the amount of revenue earned by these encounters must be estimated, the next step is bo further subdivide the number of encounters just developed by the type of payor and type of encounter. This is done by multiplying the number of encounters developed in Exhibit 10-13a by the payor and service mix information in Exhibit 10-13b which reflects ZMG's payor mix by type of encounter based on their experience over the past several years. The ZMG practice uses three major categories of payors: commercial insurance, Medicare, and Medicaid Self-Pay, and categorizes their encounters into two types, admissions and follow-up encounters. The result is the estimate of encounters by payor and type of encounter (Exhibit 10-13e). Exhibit 10-13a coming year Calculation of number of encounters by payor type for the Jan Feb Mar Apr May un AuSep Oct Now Dc Toal for 20 for 20 From imernal records af the organzation Exhibit 10-13b Distribution of encounters by payor and encounter type Commercial 9% 27% 36% Medicare 14% 42% 56% Self-Pay 2% 6% 8% Total 25% 75% 100% Admissions Follow-up Total

Answer 1

NUMBER OF COMMERCIAL PATIENT ENCOUNTERS

	JAN	FEB	MAR	APR	MAY	JUNE	JULY	AUG	SEP	OCT	NOV	DEC	TOTAL
TOTAL ENCOUNTERS (20X1)	5,007	4,676	5,044	4,686	4,480	4,596	4,697	4,833	4,653	4,923	4,734	5,202	57,531
PROJECTED GROWTH	5%	5%	5%	5%	5%	5%	0.5%	0.5%	0.5%	0.5%	0.5%	0.5%
TOTAL ENCOUNTERS (20X2)	5,257	4,910	5,296	4,920	4,704	4,826	4,720	4,857	4,676	4,948	4,758	5,228	59,100
COMMERCIAL ENCOUNTERS	36%	36%	36%	36%	36%	36%	36%	36%	36%	36%	36%	36%
TOTAL COMMERCIAL ENCOUNTERS	1,893	1,768	2,123	1,771	1,693	1,737	1,699	1,749	1,683	1,781	1,713	1,882	21,492

TOTAL COMMERCIAL ENCOUNTERS = 21,492