St Anthony's Hospital Is a Private Not-For-Profit Entity That Provides

question 22

Essay

St. Anthony's Hospital is a private not-for-profit entity that provides health care services to citizens of the small rural community in which the hospital is located. The most recent construction at the hospital was financed using Hill-Burton funds. During the current month, St. Anthony's engaged in the following transactions. Make the appropriate journal entries for St. Anthony's for the current month.
a. Based on the hospital's established billing rate, services rendered to patients amounted to $1.5 million. Of this amount $1,000,000 will be billed to Delta Medical Group; a third-party payor that insures many state employees; $190,000 will be billed to uninsured patients; $250,000 is provided to indigents and will be considered charity care; and $60,000 was for services rendered to hospital employees.
b. Delta Medical Group pays for services rendered to its insurees on a rate schedule based on types of procedures rendered. For the services rendered during the current month to Delta insurees, Delta will reimburse the hospital $975,000. Part of the agreement between St. Anthony's and Delta is that Delta insurees will not be billed for the difference between the amount that the hospital bills and the amount that Delta pays.
c. Based on prior experience with uninsured patients, the Hospital estimates that $75,000 of the $190,000 will be uncollectible.
d. The hospital provides a 50 percent discount for services rendered to its employees.
e. The hospital recognizes the value of charity services rendered.
f. The hospital is the defendant in a malpractice suit. Attorneys for the hospital are reasonably sure the hospital will be found liable and that the best estimate of the amount of the loss is $1,500,000. The hospital carries medical malpractice insurance with a $500,000 deductible clause.
g. The hospital has numerous capital assets on its books. Straight-line depreciation on the assets is $150,000 for the current period.

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