Overall

In this assessment, you will evaluate the physicians practice financial condition based on the following RVU calculations and analysis. A. Average and Marginal Costs per RVU, B. Total Average Cost, C. Total Marginal Cost per CPT code, and D. Analyzing the information to assist the physicians in using these costs appropriately and making informed decisions.

You will be graded based on your understanding of the calculations, the accuracy of your calculations, the validity of your conclusions and your ability to clearly communicate your analysis. To complete this assignment, follow Steps 1 through 4, below:

STEP 1. Review the article, How Managerial Accountants Make Physician's Practices More Profitable

STEP 2. From this financial information, calculate A, B, and C below: A. Average and Marginal Costs per RVU, B. Total Average Cost, and C. Total Marginal cost per CPT code.

STEP 3. In proper APA format, write a 3-to-5-page paper (include cover and reference pages, not included in page count). For each RVU calculation, in a paragraph respond to A, B, and C below: A. Calculate the costs, B. Show your calculations, and C. Write a conclusion about the physician practices financial condition and discuss how you can assist the physicians in using these costs in making informed decisions.

STEP 4. Use headings for each paragraph and category to decipher the discussion and organize paragraphs.

Assumptions

Assume that during the FY2016 year, Lovely Life LLC historical costs were $750,000 when 11,000 RVUs were produced and $950,000 when 14,000 RVUs were produced. The contract specifies that the number of RVUs per service CPT code are 5.

High Total Fixed Costs	$950,000
Number of RVUs (high point)	14,000
Low Total Fixed Costs	$750,000
Number of RVUs (low point)	11,000
Number of RVUs per CPT	5
Projected Number of RVUs for the next month	10,000