Question

2. Medicare reimburses your practice $79.13 for HCPCS 99214, Office Visit, Established Patient (for contrast 99204, New Patient is reimbursed at $166.13). You, the physician, want to know how much money you make on these patients. Calculate the cost for 99214 given the information below, how much do you make for your efforts, assume you devote 20 minutes per patient. Assume you see three patients per hour, work five days per week, and 48 weeks per year, what is your expected total income? Standard Cost Profile for Nursing Variable (V+F)*P Avg Total Cost Fixed 0.5 Input Price $32.00 $2.50 Cost Category Variable Salary nurse) Health Insurance SSI (7.65% of salary) Retirement (4% of salary) Unemployment Ins (0.5% of salaryhun Average total cost per visit Standard Treatment Profile Total Cost ATC $5.00 1.0 Service Unit Quantity Appointment/Registration (visit) 1.0 Nursing (visit) Medical Supplies (units) 4.0 Malpractice (visit) Utilities (hour) 0.5 Rent (hour) 0.5 Pat. Accta. (visit) Other 1.0 $2.50 $1.00 $1.00 $7.00 $6.00 $5.00 1.0 $5.00 Total Cost per Visit Total Profit per Visit Total Income per Year

Answer 1

Standard Cost profile
Cost Category	Variable	Fixed	Input Price ($)
Salary (nurse)	-	0.5	32
Health insurance	-	0.5	2.5
SSI (7.65% of salary) (7.65% of $ 79.13)
Retirement (4% of salary) (4% of $ 79.13)
Unemployment insurance (0.5% of salary) (0.5% of $ 79.13)
Average Total Cost per visit
Standard Treatment Profile
Service Unit	Quantity	ATC($)	Total Cost
Appointment / Registration (visit)	1	5	5
Nursing (visit)	1	-
Medical Supplies (units)	4	2.5	10
Malpractice (visit)	1	1	1
Utilities (visit)	1.00	0.67	0.67
Rent (visit)	1.00	4.67	4.67
Pat. Acctg (visit)	1	6	6
Other	-	5	5
Total Cost			32.33
Total Cost Per Visit	=32.33+26.86		$59.20
Total profit per visit	=79.13-59.20		$19.93
Total income per year	=19.93*3*5*48		$14351.31

Working notes :

1. SSI, Retirement and unemployment insurance are calculated as a percentage of salary received per visit, i.e.,$ 79.13 per visit.

2. Utilities and Rent expenses are provided based on hour. So, we need to convert them basis per visit. Utilities cost for 0.5 hour is $ 1 , so for 1 hour = $ 2. No. of visits in 1 hour = 3. So, utilities cost per visit = $ 2/ 3 = $ 0.67. Similarly, for rent, cost per visit = $14 / 3 = $ 4.67

3. Total income per year is calculated by multiplying income per visit * 3 visits in an hour * 5 days a week * 48 weeks a year. Since no. of hours worked in a day are not provided, we have assumed it to be 1.