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