Reference no: EM132807161

Problem 1: It provided patient services amounting to $1,920,000 at its established billing rate for which it invoiced Medicare $1,440,000. Of the balance, $320,000 was billed to individual patients, and $160,000 was for charity care. The hospital estimates that Medicare will pay only 80 percent of the invoiced amounts. Mosby collected $192,000 from individual patients, and the remainder billed to individual patients will be uncollectible. How much should the hospital report as net revenue?

Problem 2: The hospital was sued by a patient for $8,960,000 during the year for a malpractice claim. Insurance covers 70 percent of medical malpractice claims. The hospital attorneys expect that the suit will go to trial and estimate that if they lose the case, the judgment will likely be between $1,600,000 and $4,800,000. How much should the hospital recognize as a loss (or expense) for the current year?