Posted: November 28th, 2022

Assessment #6: Case Study Of Physician Practice Management And Relative Value Unit Analysis

In this assessment, you will evaluate the physicians’ practice financial condition based on the following Relative Value Unit (RVU) calculations and analysis:

Average and Marginal Costs per RVU,
Total Average Cost,
Total Marginal Cost per CPT code, and
Analyzing the information to assist the physicians in using these costs appropriately and making informed decisions.
You will be graded based on your understanding of the calculations, the accuracy of your calculations, the validity of your conclusions and your ability to clearly communicate your analysis. To complete this assignment, follow these steps:

Review the article How Managerial Accountants Make Physician’s Practices More Profitable
From this financial information, calculate the three RVU calculations:
Average and Marginal Costs per RVU,
Total Average Cost, and
Total Marginal cost per CPT code.
In proper APA format, write a 3-5 page paper (include a cover and reference page not included in page count). For each RVU calculation, in a paragraph:
Calculate the costs,
Show your calculations, and
Write a conclusion about the physician practice’s financial condition and discuss how you can assist the physicians in using these costs in making informed decisions.
*Please use headings for each paragraph and category to decipher the discussion and organize the paragraphs.

Use the following assumptions:

Assume that during the FY2016 year, Lovely Life LLC historical costs were $750,000 when 11,000 RVUs were produced and $950,000 when 14,000 RVUs were produced. The contract specifies that the number of RVUs per service CPT code are five (5).

High Total Fixed Costs

$950,000

#RVUs high point

14,000

Low Total Fixed Costs

$750,000

#RVUs low point

11,000

#RVUs per CPT

5

Projected #RVUs for the coming month

10,000

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In this evaluation, you will examine the financial state of the physicians’ practice using the following Relative Value Unit (RVU) calculations and analysis:

Costs Per RVU, Average and Marginal

,

Average Total Cost,

Total Marginal Cost per CPT code, as well as

Analyzing the data to aid physicians in making effective use of these costs and making educated judgments.

Your knowledge of the computations, the correctness of your calculations, the validity of your findings, and your ability to properly articulate your analysis will all be graded. Follow these steps to finish this assignment:

Examine the article How Managerial Accountants Help Physician Practices Become More Profitable.

Calculate the three RVU calculations using this financial information:

Costs Per RVU, Average and Marginal

,

Total Average Cost, and

Total Marginal cost per CPT