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Patient revenues in a health care organization are derived from multiple sources.

Prepare journal entries for the following transactions.

1. Mt. Helen Hospital billed the state Medicaid program $365,000 for services provided at its standard billing rate. The prospective payment system gives Medicaid a 38 percent discount from these rates. 2. The hospital has an arrangement with an HMO to provide hospital care to the HMOs members at a specific rate per member, per month. In April the HMO paid the hospital $425,000 per agreement for patients treated in March. Based on preestablished billing rates, the hospital would have billed the HMO $487,500. 3. The hospital provided services to patients under charity care which amounted to $1,315,000 for the year. 4. At its standard billing rates Mt. Helen Hospital provided services to Amity Inc., a third-party payer, for $2,380,000. The retrospective billing arrangement with Amity Inc. stipulates that the hospital would receive payment at an interim rate of 85 percent of its established rates, subject to retrospective adjust- ment based on agreed-upon allowable costs. By end of the fiscal year, Amity Inc. had paid all the billings. Before issuing its financial statements, the hospital estimated that it would need to refund $192,000 to Amity Inc., based on allowable costs.

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