Budget

Question 1

Which items are considered part of “Corporate Overhead?” CHOOSE THREE

Question 1Select one or more:

a.
Salaries of Administrative Leadership

b.
Billing and Accounting

c.
Human Resources

d.
Occupational Therapy Salaries

e.
Continuing Education Conference Fee

f.
Wheelchair for Rehab Department

g.
OT staff Licensure & Registration Fees

Answer 1

A. Salaries of Administrative Leadership

b.
Billing and Accounting

c.
Human Resources

Question 2

What are items with a useful lifespan, typically longer than 1 year, and not intended for sale (such as treatment tables and computers) called?

Question 2Answer

a.
Corporate Overhead

b.
Capital Expenses

c.
Capital Assets

d.
Salary Expenses

Answer 2

capital expenses

Question 3

Which of the following is a department that does not add to the profit of an organization, but does cost the organization money to operate?

Question 3Answer

a.
Cost Center

b.
Cost Containment

c.
Capital Expenses

d.
Corporate Overhead

Answer 3

corporate overhead

Question 4

A Fixed Expense refers to:

Question 4Select one:

a.
Costs that remain constant from one month to another

b.
Costs that are anchored to the volume of service you provide

c.
Costs associated with providing care to patients

d.
Costs associated with the organization that are not directly for the patient

Answer 4

A.

Question 5

Select all that a hospital is required to provide to full time employees, by federal law. CHOOSE THREE.

Question 5Select one or more:

a.
Worker’s Compensation Insurance

b.
Time off for Jury Duty

c.
FICA Taxes withdrawn

d.
Sick Pay

e.
Vacation Pay

Answer 5

A, B, C

Question 6

How many available hours of therapist actual work is available for one week? Full time employees work M-F 8-4, 30 minute lunch break and 2, 15 minute breaks each day

Answer 6

Full time - OT
7 Hours x 5 days = 35 hours
Part Tim
35 hours/2= 17.5 hours OR
8/2= 4 x 5 days = 20 hours ( no breaks )

Question 7

How many available hours per year of OT? They receive 15 days of vacation, 10 sick and 7 holiday/personal days

Answer 7

52 weeks x 5 days = 260 days of work possible
Subtract 32 days total off = 228 days
228 days x 7 hours a day = 1596 hours of OT per year

Question 8

Given that they can treat two patients per hour, how many patient visits do you anticipate you should budget for the following year?

Answer 8

1596 hours x 2 patients/hr = 3192 visits per year
# OT treatments per week = 3912 per year/ 52 weeks = 61 patients per week

Question 9

If there is typically a 20% cancellation rate by patients. What are your adjusted patient visits?

Answer 9

OT treatments per week: 61 treatments x .8= 48.8 treatments per week

OT treatments per year: 3192 x .8- 2553.6 treatments per year

Question 10

If net revenue averages $50 per treatment, how much revenue would the department gain from this OT that earns $45,000 per year?

Answer 10

2554 treatments per year x $50= 127700
Subtract $45000 per year

= $82700 net revenue

Question 11

What methods would you use to justify the .5 FTE OTA

Answer 11

Sessions missed
Productivity
Burn out
Waiting list
Calculate missed revenue

Question 12

Assuming OT will treat 80% of the patients 2x a day for 30minutes each, how many hours of OT services do you need for each week? And for the year?

Answer 12

80% of 5 bed unit = 4 beds x 2x a day= 8 sessions x .5 hr= 4 hours a day

4 hours a day x 5 days= 20 hours a week

20 hours x 52 weeks = 1040 hours a year

Question 13

Given that this is a new program and there are evaluation needs, what type of personnel would you hire initially and how many (FTE)? Consider not only direct patient care needs, but also admin needs for new center

Answer 13

Only 5 patients!
1 OTR (1 FTE)> ½ patient care, ½ admin duties

Question 14

If you have more hours than direct patient hours needed in question 1. What would the personnel be doing in non patient care time?

Answer 14

Order equipment
Arranging space
Marketing
Developing policy and procedure manual
Prof. development
Documentation
FW manual
Billing

Question 15

In June, the sub acute rehab expands to 10 beds and you are asked to determine additional FTE staffing given the 80% of patients treated by OT 2x a day for 30 minutes (double the treatment needs). What type of FTE? Predict salary costs for the year June- December

Answer 15

10 beds (.8) = 8 patients x 2 visits per day = 16 visits x .5hr
= 8 hours a day x 5 days = 40 hours a week are now needed

1 OTR 7 hours x 5 days= 35 hours x $50hr= $1750 x 52 weeks = $91000/2 (6 months) = $45000
½ OTA 5 hours x $25hr = $125 x 52 weeks =$6500/ 2 (6 months) = $3250
½ OTR 5 hours x $50 = $250 x 52 weeks = $13000/2 (6 months)= $6500

Question 16

For Profit

Answer 16

Pays Taxes
Investors & Dividends
Restaurants, stores, accounting firms, etc.

Question 17

Nonprofit

Answer 17

Does not earn profit for its owners; collects payments/donations to provide services and uses profit to further advance the organization~ not invest in business growth for a profit
No taxes
Mission/purpose to further a social cause/provide public benefit (hospitals, universities, national charities and foundations)
May have paid employees
Religious groups, labor unions, Habitat for Humanity, AOTA

Question 18

Not-For-Profit

Answer 18

Also does not earn profit for its owners
Not required to operate for the benefit of public good; serves the goal of its members
May be tax exempt
Excess funds back into business growth
Run by volunteers
Examples are sports clubs, associations- NYSOTA

Question 19

OT Revenue

Answer 19

Reimbursement

Contracts

Sales

Continuing Education Tuition

Question 20

Expense – Budget Categories

Answer 20

Capital Expense (Improvement)

Personnel

Supplies

Overhead

Question 21

Capital Expense

Answer 21

Expenditure made for an asset with a useful life of more than 1 year

Looks at the return on investment (ROI) in decision making

Equipment (copier, mats), technology (fluidotherapy; US; Driving Simulator)

Question 22

Capital Expense:Written Justification

Answer 22

Compatibility
Projected patient use
Enhances patient care/safety?
Remain Competitive
Cost Comparison
Durability

Question 23

Personnel Expenses

Answer 23

Employees as FTE = Full Time Equivalent

Benefits: within department
Continuing education, travel, dues, subscriptions

Benefits in HR Department
Payroll, health insurance, social security, Medicare, liability, vacation, workers comp, sick leave, retirement

Question 24

Staffing Options

Answer 24

Employees – Full benefits

Per Diem - Liability, staff health benefits, in house required continuing ed & monitor regulations

Contract Service - No benefits (independent contractors & Consultants)

Question 25

Utilization of Support Staff

Answer 25

Administrative Assistant or Receptionist Support

Aide Support

Question 26

supplies

Answer 26

Billable items: Directly used with the patient and billed for within the services provided
Non-billable items: Indirect~ Cannot be billed, but supports the organization’s activities

Question 27

examples of billable supplies

Answer 27

Billable~ bandages, AE, therapy putty, electrodes, and items that need to be replaced and not used repeatedly
Non-billable~ hot packs, US gel, paraffin, pens, stools,

Question 28

corporate overhead expenses

Answer 28

Support Services~ Linen service, housekeeping, maintenance,

Centralized departments~ Legal counseling, accounting

Question 29

space and utilities

Answer 29

Space~ cost associated with use of the space

Utilities~ water, gas, electric

Question 30

Active Learning:What will you need for an outpatient clinic? How much will it cost?

Answer 30

1 Large therapy gym, 1 small treatment room, reception area
Personnel (1 OT, 1 OTA, 1 Admin Assist)
Supplies
Direct (items for Pt.’s)
Indirect (items to support the organization)
Equipment
Modalities/assessments/etc.…
Capital Equipment Expense

Question 31

OT Budget Process

Answer 31

Review last year’s utilization of services and expenses

Seek feedback on potential needs with OT staff

Review potential shared needs with other departments (PT – OT)

Question 32

Budgeting

Answer 32

Process of predicting what expenses and revenue will occur over a given period

Question 33

Budgeting periods

Answer 33

Annual Fiscal Budget
Periodic Moving Budget

Question 34

OT budget process

Answer 34

Predict potential expense needs and reimbursement changes based on current trends

Complete written justifications for new items or capital improvement items

Question 35

OT budget process

Answer 35

Review by Rehab Manager

Review by CFO (Chief Financial Officer) or other (accountant, business manager)

Board of Directors Approval