CHAPTER 7: SERVICE LINE COSTING AND PRICING Homework 3.4, Chapter 7 2 Assume tha
ID: 2814019 • Letter: C
Question
CHAPTER 7: SERVICE LINE COSTING AND PRICING Homework 3.4, Chapter 7 2 Assume that a primary care physiclan practice performs only physical examinations, with three different leveh, dependling upon the depth and complexity of each exam. An RVU analysis determined the required RVUs for each exam as Indicated below. The total costs to run the practice, Including dlagnostk as well as the annual prejected number of examinations for each level are aso listed below. 10 Exam 11 Levell 12 Level l1 13 Level Il 14 Total exams 15 Total costs 15 17 a. Using RVU methodology, what ls the estimated cost per RVU? 20 30 5750,000 19 Cost per RVU 23 2s : 26 27 28 b. What is the estimated cost per type of exam? 30 31 Level 32 Level 33 Level l 35 37 c. Based on the cost per exam, what is the estimated annual cost for each axam? 39 Level 40 Level 41 Level I 42 TOTAL 3.1 3.2 3.3 3.4 3.5 ReadyExplanation / Answer
a ). Cost per RVU = Total cost ÷ total RVU
= $ 750000 ÷ 90
=. $ 8333.33
b) level I 750000÷4000×2500
= $ 468750
Level II 750000÷4000× 1000
= $ 187500
Level III. 750000÷4000×500
= $ 93750
c)
Formula = Total cost ÷ RVU × exam
Level I RVU × Exam = 20 × 2500 = 50000
Level II. RVU × Exam = 30 × 1000 = 30000
Level III RVU × Exam = 40 × 500 = 20000
Total cost
Level I. 750000÷ 100000 × 50000 = $ 375000
Level II 750000÷ 100000 × 30000 = $ 225000
Level III 750000÷ 100000 × 20000 = $ 150000
Total cost = $ 750000