The Maggie King Hospital, a not-for-profit hospital, had the following transactions regarding its
patient service billings.
1. The total services provided by the hospital to all patients during the year amounted to $19 mil-
lion at the hospital's established billing rates.
2. Transaction 1 includes billings to Medicare (for services to program beneficiaries) at prospec-
tively determined rates. Under this program contractual adjustments to the predetermined
rates were $1.5 million.
3. Transaction 1 also includes billings to third-party payer X under an agreement that calls for
retrospective final rates. Interim billing rates under this agreement resulted in contractual
adjustments of $1 million.
4. The hospital provided charity care included in transaction 1 valued at $500,000 at the estab-
5. The hospital made a provision for bad debts in the amount of $300,000.
6. The hospital collected $13.5 million from third-party payers and direct-pay patients. The hos-
pital also wrote off bad debts of $200,000.
7. The hospital estimated it would need to refund $100,000 to payer X in transaction 3 when
retrospective rates are determined. (The hospital's receivables include no amounts due from
Prepare the journal entries needed to record these transactions. State (a) the amount of net patient
service revenue the hospital will report on its operating statement and (b) the amount of net patient
accounts receivable the hospital will report on its balance sheet. Also, state (c) how the estimated
third-party payer settlements should be reported and (d) how charity care should be reported.
Journal entries for not-for-profit hospital
How does the nursing structure of a nursing home facility differ from that of a general acute care hospital? Why? Are these differences necessary? Please cite all references. Please try to use and cite USA illustration and examples if possible. Thank you.View Full Posting Details