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goji.go goji.go
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Posts: 5977
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9 years ago
A hospital had capitation agreements with several health maintenance organizations to provide services. The hospital received $12 million of capitation fees for the year. The hospital also calculated that: (a) its costs to provide these services were $11.8 million; and (b) the value of these services at established billing rates were $16 million. How should the hospital report this information on the face of its financial statements?
      a.   report $200,000 as a separate item of revenue, labeled net premium revenue.
      b.   add $16 million to Net patient service revenue, and deduct $4 million in a separate item labeled Adjustment for capitation premiums.
      c.   report Premium revenue of $12 million as a separate item of revenue, and report cost of serving HMO patients of $11.8 million as a separate item of expense.
      d.   report premium revenue of $12 million as a separate item of revenue, if significant.
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Diesel
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Answer accepted by topic starter
f_zah1f_zah1
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#1
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9 years ago
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goji.go Author
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#2
9 years ago
Thanks so much f_zah1.

You were correct Smiling Face with Open Mouth
Diesel
wrote...
#3
9 years ago
You're very welcome!
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