Net patient revenue (NPR) is defined as NPR from gross charges by subtracting which categories?

• A. NPR equals gross charges minus allowances, discounts, charity care, and bad debt; main components include payer allowances, contractual adjustments, and write-offs.
• B. NPR equals gross charges minus depreciation and interest.
• C. NPR equals net income before taxes.
• D. NPR equals gross charges minus administrative costs.

Answer: (A)

Net patient revenue reflects the revenue a hospital actually expects to collect from patient care after removing amounts that won’t be collected. Start with gross charges and subtract the reductions caused by payer allowances and contractual adjustments, plus charity care and bad debt write-offs. The main drivers of NPR are payer allowances, contractual adjustments, and write-offs. Depreciation, interest, and administrative costs are not part of this calculation, and net income before taxes is a different financial measure.