Raleigh Hospital signs a contract with Buena Health Plans to…
Raleigh Hospital signs a contract with Buena Health Plans to provide healthcare services to Buena’s members. The contract includes certain quality metrics that will be used throughout the contract term. The measures include target and stretch goals for its 30-day all-cause readmission rates and hospital-acquired infection rate. The contract is set up such that Raleigh is required to submit, within 30 days of the end of each quarter, information on its actual 30-day all-cause readmission rates and hospital acquired infections for the preceding quarter (for example, Q1 information is due by April 30th). Baseline, target and stretch information follows: If Raleigh fails to reach baseline on a measure, it incurs a 3% penalty. If target is reached, Raleigh receives a 2% bonus. If stretch is reached, Raleigh receives a 4% bonus. Performance is determined on a quarterly basis. Assume that Raleigh’s reimbursement from Buena for the first quarter was $100 million. Raleigh submits data to Buena showing that Raleigh’s actual Q1 readmission rate was 5.8% and its hospital-acquired infection rate was 3.0%. What amount of bonus or penalty should Raleigh record?
Read DetailsUse the following information in questions 34 through 37 Gen…
Use the following information in questions 34 through 37 General Hospital and Magellan Insurance entered into a contract. General Hospital agreed to provide healthcare services to Magellan’s insured lives. General Hospital will be paid for inpatient services on a DRG-basis. Outpatient services will be paid on a fee schedule basis. The contract includes a two-sided shared savings model, with quality indicators. In the prior year, Magellan paid General Hospital $500 million for healthcare services. This year, General Hospital and Magellan agreed to a target of $475 million. General Hospital and Magellan agreed to the following: If actual costs are up to $5 million above or below the target, Magellan retains the cost savings/excess costs If actual costs are $5 million to $10 million above or below target, the savings/excess will be shared equally by General Hospital and Magellan. If actual costs are $10,000,001 to $25,000,000 above or below target, the savings/excess will be shared 75% (General Hospital)/25% (Magellan) Any cost savings/excess costs above $25,000,000 will be retained by Magellan Quality Indicators must be met to share in any cost-savings, and have no impact on shared losses. Indicate the shared savings/shared losses amounts General Hospital should record for each of the following scenarios. Actual costs were $4 million over target and quality measures were better than goal?
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