Amounts owed to the practice by patients, third-party payers, employer groups and
unions for feefor-service activities before adjustments for anticipated payment
reductions, allowances for adjustments or bad debts. Amounts assigned to “Accounts
receivable” are due to “Gross fee-forservice charges.” Assigning a charge into “Accounts
receivable” initiates at the time a practice submits an invoice to the payer or
patient for payment. For example, if an obstetrics practice establishes an open
account for accumulation of charges when a patient is accepted into a prenatal program
and the account will not be invoiced until after delivery, then “Accounts receivable”
will not reflect these charges until the creation of an invoice. Deletion of charges
from “Accounts receivable” is done when the practice receives payment, turns over
debt to a collection agency or writes off the account as bad debt. “Accounts payable
to patients and payers” are subtracted from “Accounts receivable” before reporting
“Accounts receivable.” This is the net amount owed after patient refunds.
Do not include:
1. Capitation payments owed to the practice by HMOs.
Add “Total net fee-for-service collections/revenue,” “Net capitation revenue,” and
“Net other medical revenue.”
1. Salaries, bonuses, incentive payments, honoraria and profit distributions;
2. Voluntary employee salary deductions used as contributions to 401(k), 403(b),
or Section 125 plans;
3. Compensation for all support staff employed by all of the legal entities working
in support of the medical practice represented on this questionnaire;
4. Temporary staff working for temporary agencies;
5. The allocated support staff cost where the practice consists of multiple legal
entities. For example, an MSO managing two medical practices and employing one billing
clerk who devotes an equal amount of time to each practice would add 50 percent
of the one billing clerk’s compensation to the total cost of “Patient accounting”,
Cost column, for each managed practice; and
6. Compensation for both full-time and part-time employed support staff.
Do not include:
1. Nonphysician provider cost;
2. Expense reimbursements.
1. Information technology;
2. Drug supply;
3. Medical and surgical supply;
4. Building and occupancy;
5. Furniture and equipment;
6. Administrative supplies and services;
7. Professional liability insurance premiums;
8. Other insurance premiums;
9. Outside professional fees;
10. Promotion and marketing;
11. Clinical laboratory;
12. Radiology and imaging;
13. Other ancillary services;
14. Billing and collections purchased services;
15. Management fees paid to an MSO or PPMC;
16. Miscellaneous operating cost; and
17. Cost allocated to medical practice from parent organization
Do not include:
1. “Cost of sales and/or cost of other medical activities”;
2. Support staff cost;
3. Nonphysician provider cost;
4. “Purchased services for capitation patients”; and
5. “Nonmedical cost.”
Add “Total support staff cost” and “Total general operating cost.”
Subtract “Total operating cost” from “Total medical revenue.”