When gross revenue is recorded, all income from a sale is accounted for on the income statement. There is no consideration for any expenditures from any source. Net revenue reporting is instead calculated by subtracting the cost of goods sold from gross revenue and provides a truer picture of the bottom line.
Net patient revenue (NPR) is the aggregate money generated from patient services collected from payors, including private insurance, Medicaid and Medicare. The calculation for NPR is the total patient revenues minus patient discounts.
Net patient service revenue represents the estimated net realizable amounts from patients, third-party payors, and others for services rendered, including estimated retroactive adjustments under reimbursement agreements with third-party payors.
Revenue is earned from either 1) collecting out-of-pocket payments from patients; 2) filing a claim with private insurance companies and being paid via reimbursements; or 3) billing the government, in the case of Medicare and Medicaid.
The net revenue model is a popular commission structure because it is easy for staff to understand and not cumbersome for management to administer. This model is popular when product prices are fixed, so sales representatives are unable to manipulate the price to land a sale.
Net patient revenue means the total amount of income, after allowance for contractual amounts, charity care and bad debt, received for patient care and services, including: Sample 1.
An Example of How to Compute Net Patient Revenue Measurement $25,000 divided by $300,000 = . 083 (rounded) Convert . 083 to a percentage (multiply by 100) and you get 8.3%. Medication costs in this example are 8.3% of Net Patient Revenue.
Gross revenue is your business's total sales before anything is subtracted. Cost of goods sold is the overhead required to produce or buy the goods you sell.
Revenue per encounter can be defined and computed by dividing net collections by the total number of patient visits in a given month... This metric can provide a quick view of the health of your revenue cycle.
General Expense BreakdownWages and benefits – 56%Professional fees – 11.9%Other products, such as food, medical equipment, etc. ... Prescription drugs – 6.7%All other: labor intensive – 5.7%All other: non-labor intensive; includes phone and postage – 5.5%**Professional liability insurance – 1.2%Utilities – 1.8%
One of the top Revenue Cycle challenges for healthcare organizations is collecting payments from patients at or before point-of-service. While collecting payments before a patient leaves the office can save time and effort with collections, most providers say that it is an arduous task.
Hospital operating revenue comes from two payment sources: public payers and private payers.