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OCR for page 32
32 Sharing the Costs of Human Services Transportation
· For the Medicaid program, their share of the costs is
1.4531 times [(8,450 hours times $7.886 per hour) plus (67,500 miles times $0.3536 per
hour)], or
1.4531 times [$66,639 plus $23,871],
Both of which equal $131,517.
Note that these and other figures are from the Cost Sharing Model and differ very slightly from
the computations shown due to rounding.
As long as the following are the amounts paid by each agency, it really does not matter how the
costs are billed:
· $297,434 for the Area Agency on Aging.
· $183,965 for the sheltered workshop.
· $131,517 for the Medicaid program.
For example, each agency could be charged one-twelfth of the total each month. Alternatively,
each agency could be charged on a unit price basis, the units being cost per hour, cost per mile, or
cost per trip. If the same unit was used for all three agencies, the actual cost per unit would be dif-
ferent for each agency because they have received different services. Different unit costs could be
used for each agency as long as each agency eventually paid their share of the total annual expenses.
Summary
These examples illustrate some of the many applications of the Cost Sharing Model. The Excel
spreadsheets that accompany this Toolkit provide a high level of automation to the calculations
required to determine unit costs and potential pricing structures.
