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Example text
Multiplying the average charge per RVU times the anticipated number of work level RVUs gives the practice manager an estimate of gross charges. To compute net charges the practice manager uses contract terms to determine how much of those charges will be paid. She groups the practice’s various reimbursement arrangements into four different buckets, placing similar contracts together. 1. CHARITY CARE. A portion of the uncompensated or charity care in this country is provided by physicians. Along with hospitals, community centers, health departments, and free clinics, they are part of America’s safety net.
Thus the budget as a control mechanism takes on additional importance. 1 illustrates the relationship between the budget and the planning and control cycle. 1. THE BUDGET IN RELATION TO THE PLANNING AND CONTROL CYCLE. Strategic plan Establish yearly goals Translate to measurable objectives Use results to improve performance BUDGET Formulate budget Measure results Implement plans The budget is the focal point of the planning and control cycle. Budgeting for Physician Practices 5 Variety in Budgeting Methods There is a great deal of variety in how physician practices budget.
2 If a practice manager is budgeting using a high level of detail, she might compile a list of the Current Procedural Terminology (CPT) codes most frequently used by the practice and estimate the number of times each would occur during the year. 1 presents an example of such a list, in which estimated RVUs for each of the three reimbursement components are multiplied by the geographic adjustment to estimate the total RVUs. 5 = 45 minutes Level of detail also comes into play when estimating the reimbursement to be received for a particular service.