What constitutes net revenue for a healthcare provider?

Net revenue for a healthcare provider is calculated as billed charges minus discounts, charity care, and bad debt. This definition captures the true income a healthcare provider expects to receive for services rendered, accounting for various deductions that impact the actual revenue collected.

Billed charges represent the initial amount that a healthcare provider charges for services. However, this figure does not reflect the realistic revenue that will be realized. Deductions such as contractual adjustments, which arise from agreements with insurers, as well as charity care offered to patients who cannot pay, significantly reduce the revenue the provider will ultimately collect. Furthermore, bad debt accounts for uncollectible accounts resulting from patient non-payment.

When looking at the other choices, total billed charges without deductions would not provide a realistic picture of revenue and fails to consider what the provider will actually receive. Revenue generated after all patient payments does not accurately represent net revenue, as it does not account for adjustments and deductions that should be factored in before determining the final net revenue. Charges adjusted for inflation and market rates do not align with how net revenue is calculated; instead, net revenue is concerned with actual transactions and recognized losses rather than adjustments for external factors like inflation.