What is a contractual adjustment? Choose the correct.a. An increase in a patient’s charges caused by revisions in the billing process utilized by a health care entity.b. A year-end journal entry to recognize all of a health care entity’s remaining receivables.c. A reduction in patient service revenues caused by agreements with third-party payors that allows them to pay a health care entity based on their determination of reasonable costs.d. The results of a cost allocation system that allows a health care entity to determine a patient’s cost by department.

What is a contractual adjustment? Choose the correct.a. An increase in a patient’s charges caused by revisions in the billing process utilized by a health care entity.b. A year-end journal entry to recognize all of a health care entity’s remaining receivables.c. A reduction in patient service revenues caused by agreements with third-party payors that allows them to pay a health care entity based on their determination of reasonable costs.d. The results of a cost allocation system that allows a health care entity to determine a patient’s cost by department.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 22E

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What is a contractual adjustment? An increase in a patient’s charges caused by revisions in the billing process utilized by a health care entity. A year-end journal entry to recognize all of a health care entity’s remaining receivables. A reduction in patient service revenues caused by agreements with third-party payors that allows them to pay a health care entity based on their determination of reasonable costs. The results of a cost allocation system that allows a health care entity to determine a patient’s cost by department.
Which of these duties might a financial manager in a healthcare organization be responsible for? Prepare a year to date trial balance report for the annual tax filing Conduct data analysis to report to the board of directors on new revenue sources Complete a medical supply inventory and submit it to the purchasing department Submitting invoicing to an insurance company for payment
When nonrefundable upfront initiation fees are received by new members of a health club, the club recognizes the fees as Unearned revenue that may be recognized with the members' first visit. Revenue immediately. Unearned revenue that may be allocated over the contract period. The commission expense for the employee who signs up the new members.
Transactions (a) through (e) took place in Stoney Heights Private Hospital during the year ending December 31, 2019.a. Gross revenues of $5,000,000 were earned for service toMedicare patients.b. Expected contractual adjustments with Medicare, a third-party payor, are $2,500,000; and an allowance for contractual adjustments account is used by Stoney Heights.c. Medicare cleared charges of $5,000,000 with payments of $2,160,000 and total contractual allowances of $2,840,000 ($2,500,000 + $340,000).d. Interim payments received fromMedicare amounted to $250,000.e. The hospital made a lump-sum payment back toMedicare of $100,000.1. Record the transactions in the general journal.2. Calculate the amount of net patient service revenues.3. What is the net cash flow from transactions withMedicare?4. What adjustments must be made at year-end to settle up with Medicare and properly report the net patient service revenues after this settlement?
The following selected events relate to the 2019 activities of Fall Nursing Home, Inc., a not-for-profit agency:a. Gross patient service revenue totaled $2,200,000. The provision for uncollectible accounts was estimated at $92,000. The allowance for contractual adjustments was increased by $120,000.b. After a conference with representatives of Gold Star Insurance Company, differences between the amounts accrued and subsequent settlements reduced receivables by $60,000.c. A grateful patient donated securities with a cost of $30,000 and a fair value at date of donation of $75,000. The donation was restricted to expenditure for modernization of equipment. The donation was accepted.d. Cash of $45,000 that had been restricted by a donor for the purchase of furniture was used this year. Fall chose to release the donor restriction over the useful life of the asset.e. The board voluntarily transferred $50,000 of cash to add to the resources held for capital improvements.f. Pledges of $60,000…
Which of the following statements is true regarding postretirement health care benefit obligations and their accounting? a. The estimates involved in accounting for such benefits are generally less complex than those associated with accounting for pensions. b. Such benefits are usually provided as part of a defined contribution postretirement benefits plan. c. Employers usually offer multiple varying tiers of coverage based on beneficiaries’ length of service with the company. d. The gross cost of providing such coverage is commonly offset by government-provided health insurance.
White Valley Presbyterian Hospital is a nonprofit initial care facility. For the hospital’s calendar year ending December 31, 2019 journal entries to record the transactions listed in 1 through 14. below Third-parties payers and direct-pay patients were billed $6,500,000 at the hospital's established billing rates The hospital determined that certain of its patients qualified for charity care and that it would not seek to collect $950,000 at established billing rates from direct-pay patients The hospital estimated contractual adjustments for the year of $1,600,000 The hospital originally estimated uncollectible amounts from direct-pay patients to be $250,000 (recall that original estimated uncollectible amounts reduce revenue; only estimates specific to an individual patient are reported as bad debt expense). The hospital received capitation premiums of $2,500,000. It estimated that the cost of providing this care was $1,800,000 The hospital received payments from third-party payers…
Which of the following statements regarding the Patient Protection and Affordable Care Act (ACA) is true? Group of answer choices a. The ACA eliminates lifetime limits on total health care insurance payments by insurers. b. The ACA limits the total number of surgeries for the insurers. c. The ACA requires employers to reimburse the cost of hospital stays of the insured. d. The ACA decides the insurance payments for dependents. e. The ACA provides major medical insurance with low deductibles to protect against catastrophic illnesses.
When MUST the Policy Summary for a life insurance policy be delivered? Prior to the sales presentation With or prior to delivery of the policy Within a year after delivery of the policy Only upon delivery of a replacement policy.
Fill in the blank. The ____________ principle of accounting requires the revenues generated by providing care for a patient to be recorded in the same accounting period as the expenses incurred to provide that care.
Which is Idemenity Plan and which is Managed Care Plan? Insureds create contract with an insurer who does not provide health care services The higher the deductible, the lower the premium Insured receive health care services from a designated group of providers May not even involve an insurance company No annual deduction is incurred, but a small co-payment may be required I most value the freedom of choice and am willing to pay for it. Cost is my most important consideration. I’d rather have the flexibility of either having the insurance company reimburse me or directly paying the health care provider.
What is a contractual adjustment? How does a health care organization account for a contractual adjustment?