Table 5: Methods of Estimating Costs and Their Data Sources

Type of Estimate	Data Sources	Limitations
Constructed Estimates	Actual expenditures from agency general ledgers Actual expenditures from Medicare cost reports	High level of effort, Limited access Doesn’t include community agencies
Derived Estimates	Contracts specifying total budget and obligated service provision; Allowed charges, adjusted by cost to charge ratio	May include cross subsidies May be available for hospitals only
Payments	Paid claims Fee schedules	Do not reflect actual costs
Pre-existing Estimates	Published reports	May not be the same "product", May not have documentation on how estimates were generated.

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