Sheet1HCMG 750Week 6 Assignment: Operating BudgetInformation for 2017Category# of visitsProfessional FeeFacility FeeProfessional Fee TotalFacility Fee TotalTotalNew PatientsLevel 1100Level 2200Level 3150Established PatientsLevel 110440Level 21950Level 3660Initial Inpatient Consult20 minutes90040 minutes40055 minutes200Office Consult30 minutes (level 2)200040 minutes150060 minutes18002017 Actual BudgetREVENUENew/Established Patient RevenueConsult RevenueTotal RevenueLess 9% Allowance for Doubtful AccountsNet RevenueEXPENSESPhysician SalariesStaff SalariesTotal SalariesSuppliesProfessional DuesRentUtilities/Phone/InternetPayroll TaxesTotal ExpensesExcess of Revenues over Expenses2018 Projected BudgetREVENUENew/Established Patient RevenueConsult RevenueMedicare AdjustmentTotal RevenueLess 7.5% Allowance for Doubtful AccountsNet RevenueEXPENSESPhysician SalariesStaff SalariesTotal SalariesSuppliesProfessional DuesRentUtilities/Phone/InternetPayroll TaxesTotal ExpensesExcess of Revenues over Expenses Reimbursement to the hospital (and the patient’s financial responsibility) will also vary based on the term of any insurance coverage, contractual reimbursement rates, deductible, copay, and coinsurance. The above 2016 charge estimates are based on rates as of 07/01/2016. Charges for specific patients will depend on many factors including the physician, the condition of the patient, unexpected complications, or additional procedures required. These charges are to be considered estimates only and are not a guarantee of final costs. These are hospital charges only except where indicated. Other fees and charges are not included such as surgeon or other physician fees, radiologist, and other non-facility fees. If you have any questions please contact our billing office at 207-795-2237 Patient Price List at Rumford Hospital Inpatient Charges Room Charges Daily Rate Intensive Care $2,968 Medical/Surgical $1,204 Maternity $1,058 Newborn Care Fee $621 Level Professional Fee Hospital New Patient Consult Level 1 $90.50 Level 2 $131.00 Level 3 $180.00 Level 4 $218.50 Level 5 $278.75 Duration Professional Fee Initial Hospital Care/Day 30 Minutes $166.75 30 Minutes $231.50 40 Minutes $287.50 Duration Professional Fee Subsequent Hospital Care/Day 20 Minutes $86.00 40 Minutes $117.75 55 Minutes $176.25 DAILY ROOM RATES HOSPITAL CARE Reimbursement to the hospital (and the patient’s financial responsibility) will also vary based on the term of any insurance coverage, contractual reimbursement rates, deductible, copay, and coinsurance. The above 2016 charge estimates are based on rates as of 07/01/2016. Charges for specific patients will depend on many factors including the physician, the condition of the patient, unexpected complications, or additional procedures required. These charges are to be considered estimates only and are not a guarantee of final costs. These are hospital charges only except where indicated. Other fees and.

1. Sheet1HCMG 750Week 6 Assignment: Operating
BudgetInformation for 2017Category# of visitsProfessional
FeeFacility FeeProfessional Fee TotalFacility Fee
TotalTotalNew PatientsLevel 1100Level 2200Level
3150Established PatientsLevel 110440Level 21950Level
3660Initial Inpatient Consult20 minutes90040 minutes40055
minutes200Office Consult30 minutes (level 2)200040
minutes150060 minutes18002017 Actual
BudgetREVENUENew/Established Patient RevenueConsult
RevenueTotal RevenueLess 9% Allowance for Doubtful
AccountsNet RevenueEXPENSESPhysician SalariesStaff
SalariesTotal SalariesSuppliesProfessional
DuesRentUtilities/Phone/InternetPayroll TaxesTotal
ExpensesExcess of Revenues over Expenses2018 Projected
BudgetREVENUENew/Established Patient RevenueConsult
RevenueMedicare AdjustmentTotal RevenueLess 7.5%
Allowance for Doubtful AccountsNet
RevenueEXPENSESPhysician SalariesStaff SalariesTotal
SalariesSuppliesProfessional
DuesRentUtilities/Phone/InternetPayroll TaxesTotal
ExpensesExcess of Revenues over Expenses
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be

2. considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Patient Price List
at Rumford Hospital
Inpatient Charges
Room Charges Daily Rate
Intensive Care $2,968
Medical/Surgical $1,204
Maternity $1,058
Newborn Care Fee $621
Level Professional Fee
Hospital New Patient Consult Level 1 $90.50
Level 2 $131.00
Level 3 $180.00
Level 4 $218.50
Level 5 $278.75
Duration Professional Fee
Initial Hospital Care/Day 30 Minutes $166.75
30 Minutes $231.50
40 Minutes $287.50
Duration Professional Fee
Subsequent Hospital Care/Day 20 Minutes $86.00

3. 40 Minutes $117.75
55 Minutes $176.25
DAILY ROOM RATES
HOSPITAL CARE
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Level Facility Charge
ED Level 1 $107.00
ED Level 2 $178.25
ED Level 3 $365.50
ED Level 4 $667.25
ED Level 5 $1,082.50
Critical Care – 1st Hour $1,783.00

4. Critical Care – Each Additional ½ Hour $445.75
Emergency Department Charges
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
MS DRG Description Average Charges
795 NORMAL NEWBORN $2,150.72
948 SIGNS SYMPTOMS W/O MCC $18,425.85
775 VAGINAL DELIVERY W/O COMPLICATING
DIAGNOSES $6,955.92
194 SIMPLE PNEUMONIA PLEURISY W CC $20,317.05
603 CELLULITIS W/O MCC $13,585.45
195 SIMPLE PNEUMONIA PLEURISY W/O CC/MCC
$15,319.19
189 PULMONARY EDEMA RESPIRATORY FAILURE

5. $12,916.14
192 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O
CC/MCC $13,310.99
690 KIDNEY URINARY TRACT INFECTIONS W/O MCC
$11,893.45
392 ESOPHAGITIS GASTROENT MISC DIGEST
DISORDERS W/O MCC $15,384.01
292 HEART FAILURE SHOCK W CC $12,724.42
794 NEONATE W OTHER SIGNIFICANT PROBLEMS
$3,007.88
191 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W
CC $13,647.37
947 SIGNS SYMPTOMS W MCC $24,515.20
561
AFTERCARE MUSCULOSKELETAL SYSTEM CONNECTIVE
TISSUE W/O CC/MCC
$26,221.92
641
MISC DISORDERS OF NUTRITIONMETABOLISM-
FLUIDS/ELECTROLYTES W/O MCC
$14,191.79
440 DISORDERS OF PANCREAS EXCEPT MALIGNANCY
W/O CC/MCC $10,063.85
872 SEPTICEMIA OR SEVERE SEPSIS W/O MV >96 HOURS
W/O MCC $14,734.51
066
INTRACRANIAL HEMORRHAGE OR CEREBRAL
INFARCTION W/O CC/MCC
$16,600.94

6. 683 RENAL FAILURE W CC $16,916.56
Top 20 MS-DRGS
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Provider Based Practice Charges
Level Professional Fee Facility Fee
Office Visits Level 1 $59.25 $56.25
Level 2 $100.75 $77.00
Level 3 $148.75 $77.00
Level 4 $188.25 $98.75
Level 5 $247.50 $136.25

7. Level Professional Fee Facility Fee
Office Visits Level 1 $33.25 $56.25
Level 2 $58.25 $77.00
Level 3 $72.75 $77.00
Level 4 $134.25 $98.75
Level 5 $191.25 $136.25
Age Professional Fee
Physicals Age 0-1 $197.25
Age 1-4 $211.00
Age 5-11 $207.00
Age 12-17 $213.50
Age 18-39 $209.00
Age 40-64 $240.00
Age 64+ $260.00
Age Professional Fee
Physicals Age 0-1 $160.50
Age 1-4 $180.50
Age 5-11 $180.50
Age 12-17 $178.25
Age 18-39 $177.25
Age 40-64 $206.00
Age 64+ $223.75
NEW PATIENTS
ESTABLISHED PATIENTS
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance

8. coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Provider Based Practice Charges, continued
Level Professional Fee
Outpatient Hospital Consult Level 1 $118.50
Level 2 $154.00
Level 3 $218.50
Level 4 $267.25
Level 5 $333.75
Duration Professional Fee
Initial Inpatient Consult 20 Minutes $128.50
40 Minutes $170.75
55 Minutes $215.50
80 Minutes $277.00
110 Minutes $349.25
Duration Professional Fee
Office Consult 30 Minutes $118.50

9. 30 Minutes $173.75
40 Minutes $226.75
60 Minutes $298.50
80 Minutes $376.50
CONSULTS
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Radiology Charges
CPT Description BH
70250 XR Skull 1-3 Views $219.00
70260 XR Skull Complete 4 Views $346.50
70450 CT Head wo Contrast $1,217.25

10. 70470 CT Head w+wo Contrast $1,813.50
70480 CT Orbit wo Contrast $1,058.75
70486 CT Axial or Coronol Face wo Contrast $881.00
70540 MRI Orbit and or Face wo Contrast $1,191.50
70542 MRI Orbit and or Face w Contrast $1,445.50
70551 MRI Brain wo Contrast $1,191.50
70552 MRI Brain w Contrast $1,445.50
71020 XR Chest PA+Lateral $177.75
71101 XR Ribs Right w PA Chest $344.50
72040 XR Cervical Spine $182.25
72100 XR Lumbar Spine AP + Lateral $254.75
72141 MRI Cervical Spine wo Contrast $1,191.50
72192 CT Pelvis wo Contrast $1,351.00
72193 CT Pelvis w Contrast $1,472.50
72194 CT Pelvis w+wo Contrast $2,025.50
73706 CT Angio Low Ext Bilat w+wo Contrast $1,279.25
CT Angio Lower Ext LT w+wo Contrast $1,279.25
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.

11. If you have any questions please contact our billing office at
207-795-2237
Radiology Charges, continued
CPT Description BH
CT Angio Lower Ext RT w+wo Contrast $1,279.25
73718 MRI lower extremity w/o dye $1,191.50
73721 MRI Knee Left wo Contrast $1,191.50
73722 MRI Knee Left w Contrast $1,445.50
73723 MRI Knee Left w+wo Contrast $1,824.50
74240 XR UGI Series wo KUB $468.00
76642 US Breasts Limited $291.75
76706 US AAA Screening $393.00
76770 US Retroperitoneal Complete $537.75
76881 US Left Ext Comp $319.00
76881 US Right Ext Comp $319.00
76882 US Left Ext Ltd $206.75
76882 US Right Ext Ltd $206.75
77073 CT Bone Length Study $450.50
78803 NM Tumor Imaging SPECT $761.25
78804 NM Tumor Imaging WB Multi $2,110.00
93017 Cardiovascular Stress Test Tracing $462.00
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the

12. condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Lab Charges
CPT Description BH
80048 $ Basic Metabolic 80048 $132.75
80061 Coronary Risk Panel $120.75
80156 Carbamazepine Level $135.75
81002 Urine Test $35.00
81003 Urnls Dip Stick $41.75
81025 Pregnancy Test $49.00
82270 Hemoccult $32.50
82274 Occult Blood FIT, Stool $60.50
82803 Mixed Blood Gas $251.50
82947 Glucose Test $43.00
83001 Follicle Stimulating Hormone $155.50
83516 Anti Mullerian Hormone $284.00
83520 GM1 Antibody Panel $116.00
84144 Progesterone Level $164.50
84403 Testosterone Level $180.00
84520 Blood Urea Nitrogen $39.50
86706 Hepatitis B surface Antibody $66.00
86762 Rubella IgG Ab $51.25
86765 Rubeola IgG Ab $29.00
86787 Varicella IgG Ab $71.75
87088 Urine Culture $77.75

13. 87491 Chlamydia $47.50
87535 HIV $414.00
87591 Gonorrhea $63.00
87624 HPV High Risk Screen by TMA $93.50
87880 Strep Test $58.00
88341 Immunio Stain 2+ $177.00
Reimbursement to the hospital (and the patient’s financial
responsibility) will also vary based on the term of any insurance
coverage, contractual reimbursement
rates, deductible, copay, and coinsurance.
The above 2016 charge estimates are based on rates as of
07/01/2016. Charges for specific patients will depend on many
factors including the physician, the
condition of the patient, unexpected complications, or
additional procedures required. These charges are to be
considered estimates only and are not a guarantee
of final costs. These are hospital charges only except where
indicated. Other fees and charges are not included such as
surgeon or other physician fees, radiologist,
and other non-facility fees.
If you have any questions please contact our billing office at
207-795-2237
Glossary
AMI Acute Myocardial Infarction
Bilat Bilateral
BX Biopsy

14. CC Complications and Comorbidities
CV Central Venous
DRG Diagnosis Related Group
ED Emergency Department
EGD Upper Endoscopy
ENDOS Endoscopy
ESWL Extracorporeal Shock Wave Lithotripsy
EXCIS Excision
FB Foreign Body
FB/DEVCE SK Foreign Body/Device Skin
GU Genitourinary System
I&D Incision and drainage
IN Insertion
LAP ASST Laparoscopy Assisted
MCC Major Complications and Comorbidities
MV Mechanical Ventilation
NEC Not Elsewhere Classified
NICU Neonatal Intensive Care Unit

15. OCC Occlusion
PERC Pulmonary Emboli Rule out Criteria
SubQ Subcutaneous
VAS ACC Vascular Access
HCMG750
Week 6
Assignment: Operating Budget
Points: 155
NOTE: You will be performing this assignment in Excel. See
attached file to get you started. Let Excel do the work for you.
Each of the budget reports (2017 and 2018) are worth 65 points
each. Points are awarded on the accuracy of the calculations
and the appropriate use of the information provided.
You are the financial manager at Savalife Physician Group. It
is budget time. You have to create the operating budget for the
Board meeting in two weeks. You have the following
information:
In 2017 you had the following breakdown of office visits.
Category
# of visits
New Patients
Level 1

16. 100
Level 2
200
Level 3
150
Established Patients
Level 1
10440
Level 2
1950
Level 3
660
Initial Inpatient Consult
20 minutes
900
40 minutes
400
55 minutes
200
Office Consult
30 minutes (level 2)

17. 2000
40 minutes
1500
60 minutes
1800
Savalife bases their operating income on the Price List of
Rumford Hospital. See materials in Week 6 materials.
You are to create an operating budget for 2017 based on the
following information (revenues and expenses). Use the Excel
file provided to create the budget.
Information for 2017
1. Calculate the gross revenue that was generated by Savalife
Physician Group in 2017.
2. Assume that 9% of the revenue was uncollected due to bad
debt.
3. Calculate the net revenue for Savalife for 2017.
4. There are 4 physicians on staff.
a. Two physicians each make a salary of 198,000 per year
b. Two physicians each make a salary of 220,000 per year
5. There are 8 staff members
a. 1 office manager makes a salary of 60,000 per year
b. 4 RNs make a salary of 55,000 per year
c. 3 clerical staff make a salary of 37,000 per year
6. Supplies are based on office visits only (new and established
patients). The supply cost per visit is $23.50.
7. You pay professional dues for the nurses and the physicians.
a. Nurses: $180 per year
b. Physicians: $250 per year

18. 8. Rent for the building and furniture is 15,600 per month
9. Utilities, phone and the internet cost 5000 per month
10. Payroll taxes are 20% of the total salaries.
Now that you know the activity for 2017, you must prepare a
proposed budget (revenues and expenses) for 2018. Here are
the assumptions for 2018.
1. Your number of visits and consults will remain the same
2. 35% of your total revenue comes from Medicare
3. Because you met your value based goals, Medicare will
increase your payment by 1% for Medicare patients.
4. You have improved your collections and therefore, your
allowance for doubtful accounts has decreased to 7.5%
5. The physicians will receive a 5% raise
6. Your manager will receive a 2% raise
7. Your nurses will receive a 3% raise
8. Your Clerical staff will receive a 3.5% raise
9. Rent will increase to 16000 per month
10. Payroll taxes are still 20%, but are based on the new total
salaries (based on the raises).
11. All other numbers remain the same.
Make sure to use the attached Excel file to enter in your
formulas and results. Let Excel do the work for you.
Additional Questions:
1. How does the 2017 operating budget compare to the 2018
budget? Discuss reasons for the variance. (10)
2. If you are the business manager, what areas do you feel you
are doing well in? What accounted for this? What areas need
to be monitored for improvement? Why is it important to
monitor this area?(10)