The following operating revenue classifications are used in health care:
1. Patient Service Revenue, the major revenue account for a hospital, in which the gross revenues earned are recorded on an accrual basis at established rates for:
a. Routine services (room and board, general nursing, and home health care).
b. Other nursing services (in operating, recovery, and delivery rooms).
c. Professional services (physician’s care, lab work, pharmacy, blood bank, radiology, dialysis, and physical therapy).
2. Premium Revenue, based on fees from agreements under which a hospital or HMO has agreed to provide any necessary patient services for a specific fee, e.g., a capitation agreement whereby the HMO receives an agreed-upon payment from another HMO for a specific number of members per month regardless of actual services.
3. Resident Service Revenue, the major revenue account for a nursing home or continuing care retirement
community. It records rental fees earned from residents or amortization of their advance payment of fees.
4. Other Operating Revenue, which records revenue from services other than health care provided to patients and residents. Also recorded is revenue from sales or services to persons other than patients.
1. Patient Service Revenue, the major revenue account for a hospital, in which the gross revenues earned are recorded on an accrual basis at established rates for:
a. Routine services (room and board, general nursing, and home health care).
b. Other nursing services (in operating, recovery, and delivery rooms).
c. Professional services (physician’s care, lab work, pharmacy, blood bank, radiology, dialysis, and physical therapy).
2. Premium Revenue, based on fees from agreements under which a hospital or HMO has agreed to provide any necessary patient services for a specific fee, e.g., a capitation agreement whereby the HMO receives an agreed-upon payment from another HMO for a specific number of members per month regardless of actual services.
3. Resident Service Revenue, the major revenue account for a nursing home or continuing care retirement
community. It records rental fees earned from residents or amortization of their advance payment of fees.
4. Other Operating Revenue, which records revenue from services other than health care provided to patients and residents. Also recorded is revenue from sales or services to persons other than patients.
Thus, Other Operating Revenue would include:
a. Revenue from educational programs, such as nursing school tuition.
b. Revenue from specific-purpose contributions.
c. Revenue from government grants to the extent that the related expenditures are included in operations. Grants that may be refundable if provisions that are not met are recorded as a liability. As expenses are incurred, a matching portion of the grant is recorded from liabilities and recognized as current period revenue.
d. Revenue from sales of medical or pharmacy supplies to employees or physicians.
e. Revenue from sale of cafeteria meals to employees, medical staff, and visitors.
f. Revenue from snack bars, gift shops, parking lots, and other service facilities.
a. Revenue from educational programs, such as nursing school tuition.
b. Revenue from specific-purpose contributions.
c. Revenue from government grants to the extent that the related expenditures are included in operations. Grants that may be refundable if provisions that are not met are recorded as a liability. As expenses are incurred, a matching portion of the grant is recorded from liabilities and recognized as current period revenue.
d. Revenue from sales of medical or pharmacy supplies to employees or physicians.
e. Revenue from sale of cafeteria meals to employees, medical staff, and visitors.
f. Revenue from snack bars, gift shops, parking lots, and other service facilities.
The control account Nonoperating Revenue records revenue not related directly to an entity’s principal operations. These items are primarily financial in nature and include unrestricted and donor-restricted pledges, gifts, or grants, unrestricted income from endowment funds, maturing of term endowment funds, income and gains from investments, and gains on sales of hospital property. Investments are reported at fair value with both realized and unrealized gains included as part of nonoperating revenue.