BUSN 651 Midterm Exam APU

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1 . Dr . Melissa Rose is trying to decide whether to be a Medicare-participating physician for the upcoming year . ( Assume that her entire practice consists of Medicare patients or at least that her practice has slack capacity . Her Medicare patients do not displace non-Medicare patients .) Assume that her average charge is $ 120 ( before Medicare ’ s limiting charge is applied ), for which the average Medicare-approved amount is $ 100 . If she decides to be a non-participating physician , she expects to accept assignment 80 % of the time . For the unassigned patients assume that she would set her charges at 110 percent of the Medicare-approved fee for a nonparticipating physician . Assume that her Medicare patient volume is not reduced if she chooses not to participate nor if she does not accept assignment . ( Ignore bad debt and any other factors not presented here .)
1 . What will be Dr . Rose ’ s average reimbursement per visit if she chooses to be a Medicare-participating physician ? ( This is the total from both Medicare and the patients .)
2 . What will be Dr . Rose ’ s average reimbursement per visit if she chooses ​not​ to be a Medicare-participating physician ? ( This is the total from both Medicare and the patients .)
2 . An uninsured patient receives services with charges of $ 5,000 from a hospital . The hospital staff bills the patient $ 1,000 and records $ 4,000 as charity care . If the hospital ’ s ratio of cost to charges is 50 %, what amount would the hospital recognize as charity care in Schedule H of IRS Form 990 ?
3 . Using the example attached , solved the following problem :