Calculate Rates

It is necessary to follow these policies and procedures no matter how infrequent services occur.

Operating Costs = direct labor costs + direct supply & other non-labor costs + portion of RC/SSF administrative personnel costs
(subject to appropriate review and approval)

Once you have identified all of your cost elements, the rate calculation is a simple fraction:

Rate = (Operating Costs +/- Prior Year(s) Surplus)/Deficit Estimated Level of Acuity (units)

Which comes first, the RC/SSF budget or the RC/SSF rate?
Both the RC budget and rate calculation are dependent on volume, so any model must start with the cost elements for an expected volume level. The fixed costs of an RC don’t change with volume levels, or at least don’t change over a certain range of volume levels. Variable costs are dependent on volume levels.