Monday, August 29, 2011

Gross Revenue and Billed Charges

Hospitals and other healthcare providers are different from other businesses in the way they show the people who use their services (patients) a lot of individual detail.

Each service that a hospital does is billed separately, at a fixed amount. So, a patient might come in for a series of tests. The tests are all itemized separately and the bill shows the charges associated with each test. For example, a visit to the emergency room might result in a bill like:

Emergency room charge $400
Lab test $100
Chest X-Ray $200

The patient will then receive a total bill of $700 in billed charges, which the hospital recognizes as gross revenue.

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