Which item is not typically included in direct costs?

• A. Transportation
• B. Treatment, medications, and equipment
• C. Administrative overheads
• D. Hospital facility charges

Answer: (C)

Direct costs are the expenses that can be specifically traced to a patient’s care or to a particular service. They include everything that is directly used for that patient: transportation related to care, the actual treatment and medications given, and the equipment or supplies used during care. The hospital facility charges for a patient stay or use of the building and rooms are part of the direct cost of that patient’s episode because they’re tied to the care provided during that stay.

Administrative overheads, on the other hand, are broader, indirect costs that support the organization as a whole (like management, accounting, and general admin services). These aren’t tied to a single patient or service in a way that lets you trace them directly, so they’re not considered direct costs.