Certified Nurse Manager and Leader (CNML) Practice Test

How is gross revenue primarily defined?

1. The total medical charges billed to patients

2. The cash collected from patients after insurance

3. The estimated future payments from service contracts

4. The total costs incurred to provide care

The correct answer is: The total medical charges billed to patients

Gross revenue is primarily defined as the total medical charges billed to patients. This encompasses all services rendered by healthcare providers before any deductions are made for contractual adjustments, discounts, or bad debt. It represents the total potential income that a healthcare facility expects to receive from its patient base based on the services provided. Understanding gross revenue is crucial for healthcare managers as it provides insights into the facility's operational performance and revenue potential. While other options mention aspects related to revenue or costs, they focus on different components of financial management. Cash collected from patients after insurance reflects net revenue and accounts for the actual income realized, which can differ significantly from gross charges. Estimated future payments from service contracts involve projecting revenue but are not the actual billed amount. Total costs incurred to provide care pertain to expenses rather than revenue. Hence, the definition focusing on total medical charges billed accurately captures the essence of gross revenue in a healthcare setting.