Revenue Budgeting gives you the information to accurately develop your revenue budget by charge item volume and payer mix. Features of the Revenue Budgeting system include:
- Budget at the charge item level of detail in each department.
- Budget by payer/financial class.
- Payers are summarized to the IP/OP level for budget purposes and the volume amounts budgeted are allocated back to payers.
- Finance staff can project the initial budget and managers can adjust.
- Price changes can be applied either across the board or using rate sensitivity.
- Budget can be mapped to the general ledger subaccounts and uploaded either to KREG’s General Ledger budget system and/or to your general ledger.
- Actual data can be imported into KREG and monthly variance reports generated which compute the variances due to rate/volume/efficiency for every charge item and department.
The budget is usually produced at the Inpatient/Outpatient level of detail. However, you can budget for additional patient types such as Emergency Department and Same Day Surgery if you have payer information for these patient types.
Use the factoring feature of revenue budgeting to project volume based on a few organizational level statistics: total patient days, OR cases, emergency visits and/or outpatient visits. These primary statistics of the organization can be used to project volume in the departments for the upcoming year.
Department managers can review the budget reflected in the input form and make adjustments based on their intimate knowledge of operations and any anticipated changes in processes, equipment and physician preferences. This allows the managers to focus on and adjust only the line items affected by the anticipated changes. The remaining charge item activity has already been adjusted for them based on the organization level statistics.
Revenue Budgeting allows you to strategically set selective prices in lieu of an across the board increase. Clients routinely increase their bottom lines by $200,000 to $2,000,000 with this feature. Rate increases are usually determined after any volume inceases/decreases have been applied to your file, so you can compute the revenue increase due to volume/rate increases separately.
Once the budget is finalized, use the rate-volume-mix variance reports to provide a clear understanding of revenue variances by charge item from month to month. This is a great report for auditors so they can see the reason for any variances in all revenue producing departments.
Quickly review your department report to see where variances exist. The report indicates whether the variance is due to a rate change, volume or change in the mix of procedures.