Net Patient Revenue = Revenue earned for the provision of routine Hospice services to patients from sources such as Medicare, Medicaid, Commercial Insurance and Private Pay. It is less contractual allowances and bad debt. It DOES NOT include Pass-Through income (Nursing Home Room & Board, Contracted IP, Contracted Respite or Consulting Physician Services), Crisis Care Revenue or Physician Billing Revenue. It also DOES NOT include Community Support or Fundraising. It is very important that you have a clear understanding of this term because most comparison data is based on a percentage of Net Patient Revenue.
An Example of How to Compute Net Patient Revenue Measurement
Medication costs are $25,000 for the month. Net Patient Revenue is $300,000. To compute Medication costs as a Percentage of Net Patient Revenue, you would divide $25,000 by $300,000. $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.
MVI encourages the use of Percentages of Net Patient Revenue (NPR %) rather than Patient-Day costs for Hospice financial measurement. This deviates from traditional Hospice practice.
Why should a Hospice use Percentages of Net Patient Revenue rather than Patient-Day costs for Hospice financial measurement?
We are not saying that Patient-Day measurement is wrong or that it should not be used. In fact it works very well with Patient-Related costs. But we recognize its shortcomings.