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    Cost Per Case: Inpatient Capitated Contract

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    You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided.
    Budget Actual
    Inpatient Costs $12,568,500 $16,618,350
    Members 42,000 42,000
    Admission Rate 0.070 0.095
    Case Mix Index 0.90 0.85
    Cost per Case (CMI = 1.0) $4,750 $4,900

    Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?

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    Solution Preview

    You're correct. When we calculate increases from variances, we start with what was planned or budgeted, which is called the standard amount. In this case, the standard amount is $4,750. We ...

    Solution Summary

    This solution calculates the amount of increased actual total costs for the inpatient capitated contract. Includes 1 additional resource.