Week 3 – Current reimbursement rules and regulations permit

assist week 3

Complete an Activity-Based Costing Exercise

Current reimbursement rules and regulations permit the hospital to ‘sell’ its excess laboratory service capacity to locally owned and affiliated physician practices and bill at the hospital rate. Although this reimbursement policy could change in the future, NCU Academic Medical Center (AMC) has decided to explore the development of a lab outreach program to employ currently idle lab capacity. Given the significant fixed cost investment and requisite testing availability required in a hospital, NCU AMC can perform specialized testing not available in commercial laboratories, and can conduct routine tests quicker and more frequently than commercial laboratories.

Projected total costs for the NCU AMC laboratory are $6 million ($4 million in direct costs and $2 million in indirect costs). Use the provided information to determine the non-labor costs of each test:

Table 2. Determine Non-Labor Cost

Test	Projected	Labor	Supply	Equipment
	Volume	Expense	Expense	Use
Factor X activity	150	25	165	60 min
CBC	1000	4	1.00	15 min
BMP/Chem 7	1400	4	1.50	10 min

 

Create a brief PowerPoint presentation that succinctly explains the financial management concepts and/or how operational budget is at work in this scenario. Your presentation will be to the Board of Directors, who must provide approval before the project can move forward.

Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists.

Length: 5-7 slides

References: Include a minimum of 3 scholarly resources.

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