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case study 1
In summary, the marketing department at City Hospital has been tasked with increasing the sales for City Hospital durable medical equipment (DME) that was just opened 3 months ago and is owned and operated by the hospital. You have been asked to establish a marketing campaign to support the growth of the DME over the next three years. The team has decided to utilize an outside vendor to handle all the marketing. The preliminary plan is to provide the marketing company with a list of all patients diagnosed with chronic obstructive pulmonary disease (COPD) and congestive heart failure (CHF) to begin marketing home oxygen services. The marketing firm is eager to start the calls, so your team is preparing a list of patients with the target diagnoses, and they plan to start calling the patients in the next few weeks. Meanwhile, the marketing company has asked for copies of any verbal or written orders of home oxygen prescribed to patients by hospital physicians; they will contact those patients as well.
Your chief executive officer (CEO) has asked you to prepare answers to the following:
case study 2
BACKGROUND: The Health Center Program provides grants to nonprofit private and public entities that serve designated medically underserved populations and areas and vulnerable populations of migrant and seasonal farm workers, homeless individuals, and public housing residents. These grants are commonly referred to as “section 330 grants.”
Under the American Recovery and Reinvestment Act of 2009, P.L. No. 111-5 (Recovery Act), enacted February 17, 2009, Health Resources and Services Administration (HRSA) received $2.5 billion, $2 billion of which was to expand the Health Center Program by serving more patients, stimulating new jobs, and meeting the expected increase in demand for primary health care services among the Nation’s uninsured and underserved populations. HRSA awarded several grants using Recovery Act funding in support of the Health Center Program, including Health Information Technology Implementation (HIT), Capital Improvement Program (CIP), New Access Point (NAP), and Increased Demand for Services (IDS) grants.
Barrio Comprehensive Family Health Center, Inc. (Barrio), is a nonprofit organization that operates community health centers in San Antonio, Texas, and the surrounding area. Barrio provides medical, dental, and mental health services and is funded primarily by patient service revenues and Federal grants. During fiscal years 2010 and 2011 (February 1, 2009, through January 31, 2011), Barrio received approximately $9.8 million (Federal share) in section 330 grant funding to supplement its health center operations. For project periods ranging from March 2009 through May 2012, HRSA awarded Barrio funding for five Recovery Act grants totaling $7,518,980: $4,024,697 under two HIT grants, $1,447,420 under a CIP grant, $1,300,000 under an NAP grant, and $746,863 under an IDS grant. (Department of Health and Human Services, Office of Inspector General, 2013, p. i)
The objective was to determine whether the costs that Barrio claimed were allowable, and if Barrio had adequate controls over its financial management system (Department of Health and Human Services, Office of Inspector General, 2013, p. i).
SUMMARY OF FINDINGS: Of the $16,020,116 that we reviewed, $3,417,461 was allowable. We could not determine whether salary and fringe benefit costs totaling $12,543,068 that Barrio claimed were allowable because Barrio did not maintain personnel activity reports for employees who worked on its section 330, HIT, NAP, and IDS grants and because the accounting records for the section 330 and NAP grants did not separate expenditures related to the Federal grants from those related to other funding sources. Barrio recorded additional potentially unallowable costs of $50,240 for compensation increases and $9,347 for interest expense.
Barrio did not have adequate controls over its financial management system. Specifically, Barrio did not draw down funds based on the cash needs for each project and did not prepare and complete bank statement reconciliations in a timely manner. Also, Barrio did not have adequate procurement procedures to ensure that it obtained reasonable pricing when procuring goods and services. (Department of Health and Human Services, Office of Inspector General, 2013, pp. i–ii)
****** questions for case study 2
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