Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

You sat in the CEO chair and studies real world hospital accounts receivable problem with your team, and came up with a process improvement plan to reduce days in accounts receivable and improve cash flow to your hospital. Well great news is that your plan worked! This morning your days in AR stand at 67. Not perfect, but much better, and you have five payrolls of cash on hand right now. Things are looking up for community memorial!

And then just before lunch, you get a call from Bill Jacobs, HR Director at Commercial Intertech (CI), the largest employer in the community. Bill says "I wanted you to hear it from me first. We signed a contract yesterday with Mega Plan Health. They will be the managed care organization for all 4500 of our employees and their families. About 9000 patients total. I'm sure that you will want to get a contract with MegaPlan as soon as possible. I noticed that your hospital is not on their Preferred provider Network (PPN), and I am pretty sure that you will want to be, so that our employees can continue using the facility."

By the time you thank Bill for the heads up, the acid is already churning in your stomach. In the hospital world, MegaPlan is known for cut throat tactics, negotiating steep discounts with hospitals, and fighting every claim the hospitals make. Commercial Intertech has every right to contract with any Insurance provider they like, but now you have a problem. If you cannot get a decent contract with MegaPlan and become a part of their preferred provider network (PPN), many local patients may bypass your hospital and go to the next closest PPN facility. Delivered to your office this afternoon, by no coincidence, is a contract proposal from megaPlan. It calls for the hospital to provide a 35% discount from charges to megaplan and all of its members. And it includes service pre-authorization requirements which will make life very difficult for your business office. You know from experience that the hospital loses money whenever the discount from charges exceed 20%.

Is the hospital CFO trying to solve the managed care problem?
So, what will you do? Whose advice makes the most sense to you in this situation, and how will you proceed?

KEY PLAYERS
1. Chief of staff Dr. Evans: "I know you are not going to like this, but probably 1/3 of my practice comes from Commercial Intertech--employees, spouses, kids. I have had multiple generations of patients who all work out there. You need to sign a contract with MegaPlan and soon. I looked at a contract for my own office. It is not great, but if I donâ??t sign I could risk losing many of my long-time patients. And I'm sorry to say this, but if the hospital does not sign--frankly, I might have to take my patients, elsewhere."

2. CEO Katarina Eaton: "Well, we do need to form a relationship with Megaplan if commercial intertech has selected them. I would suggest preparing your own contract proposal for them to look at. Be reasonable, but make it something we can live with. Remember, we have some power in this situation ourselves. If the commercial intertech employees and families cannot use our hospital, they will be forced to travel a long way for care, and may even have to change doctors that will not make them happy at all. You can bet that the HR folks at the factory will get an ear full from their employees if we cannot come to terms with megaplan. Make your own counterproposal, and don't panic."

3. Business office manager Linda Freed: "there is simply no way that we can work with MegaPlan. I went through that at another hospital. They make it impossible to get claims approved, and when the payment finally comes, it is usually wrong. And then we have to fight for the rest of our money. Don't sign! In fact, tear the contract up and mail it back to HR at the factory. The employees will revolt at the factory when we say NO, and MegaPlan will be sent packing down the road."

4. CNO Nancy Strittmater: "Well, as you know, my husband works at commercial intertech, and quite a few of the nurses here are in that situation. What happens if we all cannot even use our own hospital for medical care? I am with Dr. Evans, you'd better sign the contract they sent and do it today so that no rumors get started around the hospital about this situation. Our people will panic if they cannot get healthcare here in town. I could even lose some of my best nurses!"

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M928899

Have any Question? 


Related Questions in Basic Finance

1 discuss how the planningcoordination and operation flow

1. Discuss how the planning/coordination and operation flow differs for MTO and MTS firms. 2. Compare and contrast the role of planning/coordination and operations in improving firm competitiveness. 3. Compare and contra ...

Which of the following would be a wash sale explaina you

Which of the following would be a wash sale? Explain. a. You buy a stock at $30. Three weeks later, you sell the stock at $26. Two weeks later, you buy a call on the stock. b. You buy a stock at $40. One month later, you ...

1 what concerns should an investor in a real estate

1. What concerns should an investor in a real estate syndication have regarding general partners? 2. What is the main difference between organizing a real estate venture as a corporation versus a general partnership? How ...

The hudson corporation makes an investment of 24000 that

The Hudson Corporation makes an investment of $24,000 that provides the following cash flow: Year Cash Flow 1................ $ 13,000 2................ 13,000 3................ 4,000 a. What is the net present value at ...

1 describe four types of invalidity that can be found in

1. Describe four types of invalidity that can be found in experimental research designs. 2. What are extraneous and confounding variables? Which type of variable is most dangerous to the statistical conclusion validity a ...

Go to wwwbloombergcomnewseconomy and locate an article

Go to www.bloomberg.com/news/economy/ and locate an article related to a recent Federal Reserve action. Write a brief summary of the article, and explain what impact it is likely to have on the economy and you as an indi ...

1 what are some of the potential problems with using a

1. What are some of the potential problems with using a "going-in" capitalization rate that is obtained from previous property sales transactions to value a property being offered for sale today? 2. When may a "terminal" ...

The suboptimal glass company uses a process of capital

The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 10 percent. It will only invest $77,000 this year. It has determined the internal rate of return for ...

Imagine that you are a participant in a research study for

Imagine that you are a participant in a research study. For each of the following scenarios, describe how you would probably react, and explain how your reactivity would influence your responses. a. A researcher tells yo ...

1 contact your local ham radio organization and take a

1. Contact your local ham radio organization and take a certification course. Use your certification to get involved in local response. You can get more information from the Amateur Radio Relay League (ARES; http://www.a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro