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Transcript of Navigating the cost report - SC HFMAschfma.org/PDFs/Fall_Instit_PDFs/10_Wendy_Dukes... · DRG...
NAVIGATING
THE COST REPORT
Wendy L. Dukes, CHFP
Lean Six Sigma Green Belt
Director Reimbursement Services
SC HFMA Fall Institute
Charleston, SC
October 18, 2012
Common Analogy
Personal Tax Filing
Form 1040
Report Earnings via W-2 or 1099
Schedule A: Itemized Deductions
Schedule B: Interest and Ordinary Dividends
Schedule C: Profit or Loss from Business
Hospital Cost Report Filing
Form CMS-2552-10
Financial Statements
Worksheet S Series: Identification, Key Statistics & Settlement Summary
Worksheet A Series: Total Expenses &
Adjustments to meet CMS Reporting Requirements
Worksheet B Series: Based on various statistics, allocates Overhead Costs to Revenue-Producing Centers
Worksheet C: Calculates Cost-to-Charge Ratios (CCR)
Worksheet D: Calculates the Cost of Care Provided to Medicare & Medicaid Patients
Worksheet E: Calculates the Reimbursement Settlement for Care Provided to Medicare & Medicaid Patients
Worksheet G: Discloses Financial Statement
Worksheet H: Calculates the HHA Cost of Care Provided to Medicare & Medicaid Patients
Common Analogy
Personal Tax Filing
Preparers
Individuals
H&R Block, etc.
Tax Attorneys
Hospital Cost Report Filing
Preparers
Individuals
Reimbursement Analysts
Budget Analysts
CFO
Consulting Groups
CPA Firms
Cost Report: Fast Facts
Specific CMS forms based on Provider TYPE Home Office - facilitates allocation of corporate expenses to
business units (no claims submissions under this provider type)
Freestanding IRF, SNF, LTAC, and HHA must file
Freestanding ASC and Physician Practices do NOT file
Hospitals file CMS-2552-10 New version required for Fiscal Years beginning on or after
5/1/2010
Last significant format change was in 1996 (CMS-2552-96)
Cost Report: Fast Facts
Mandatory annual filing
Due within 5 months of entity's fiscal year end
Must be submitted as an encrypted electronic file
Must have an original signature of Authorized
Individual (as designated on CMS-855A)
If not filed, CMS stops payments
Cost Report: Basic Facts
Originally designed to make COST settlements
to providers. Interim payments were made on a per claim basis,
then the cost of rendering care was calculated through the Cost
Report and the difference was ‘settled’.
Despite Perspective Payment Systems (PPS), remains critical
source of data for CMS
Complexity of Cost Report (C/R) forms has grown substantially
C/R Data is used in conjunction with MedPAR Claims Data so
CMS can analyze, data mine and project program expenditures
Two Types of Settlements Tentative (Interim): at the point of original filing/submission
Final: issuance of Notice of Program Reimbursement (NPR)
MEDICARE Cost Report
Wage Index (Worksheet S-3)
Wage & Salary Data
Productive Hours
Benefit Costs
Grouped by MSA
Relative to National Data
DRG Calculation: FFY 2013
WI>1 = 68.8% Labor, 31.2% Non Labor WI<1 = 62% Labor, 38% Non Labor EXAMPLE
Labor $ 3,316.23 62% Non Labor $ 2,032.53 38%
Base DRG Rate $ 5,348.76
Labor $ 3,316.23 Wage Index x 0.8690
$ 2,881.80 Non Labor + $ 2,032.53
Wage Adjusted DRG Rate $ 4,914.33
APC Calculation: FFY 2013
EXAMPLE
Labor $ 42.922 60%
Non Labor $ 28.615 40%
Base APC Rate $ 71.537
Labor $ 42.922
Wage Index x 0.8690
$ 37.299
Non Labor + $ 28.615
Wage Adjusted APC Rate $ 65.914
MEDICARE Cost Report
Uncompensated Care (Worksheet S-10)
Programs MC & MA Undercompensated Cost
Charity
Uncompensated
Charges X CCR = Cost - Payments = NET Unreimbursed Cost
Prior years were based on when Charity was recognized in F/S
2011 was based on DOS, including estimated collections on A/R
Potential Uses: HIT
MC DSH
MA DSH
MEDICARE Cost Report
CCR & Cost Per Diems applied to Medicare Claims (Worksheets C and D-1)
Annual realignment of MS-DRG Weights
Annual realignment of APC Weights
Annual adjustment of Cost OUTLIER Thresholds
MEDICARE Cost Report
Medicare Disproportionate Share Hospital (DSH) (Worksheets S-3 and E, Part A)
MC DSH Percentage o Ratio of Total Medicaid Days to Total Days
MA FFS Days
MA MCO Days Includes Administrative Denials – days denied for no “Pre-authorization”
Excludes Medical Necessity Denials – days denied for “Level of Care”; should have been Observation or OP care
Other MA Eligible Days Eligible for Medicaid services but not paid
Excludes Dual Eligible MEDICARE/MEDICAID days
o SSI% published by CMS
Basis for HRSA/OPS determining 340B Eligibility
MC DSH Settlements (difference between interim (per claim) payments and final DSH% x total claim DRG payments)
MEDICARE Cost Report
Pass Through Cost Settlements (Biweekly Payments)
(Worksheets D-1, E-Series)
Indirect Medical Education (Paramedical Education Programs) Schools of Nursing
Pastoral CPE Programs
Direct Medical Education (Interns & Residents)
Allowable MC Bad Debts Reimbursed at 70% for C/R Periods ending during FFY 2013
Reimbursed at 65% for C/R Periods beginning during FFY 2013
Must meet very strict rules and process restrictions
Only hospital Deductible & Coinsurance Amounts
Must exclude Deductible & Coinsurance on FFS amounts
MEDICARE Cost Report
NEW Retrospective Settlements
HIT Incentive (EMR) Payments (Worksheet S-10)
Value-Based Purchasing (VBP)
Readmission Incentive/Penalties
SC MEDICAID COST REPORT
Annual SC DHHS Hospital Tax Assessment Total Allowable Costs per Worksheet B, column 27
Facility Total / Total SC Hospitals x $264m
Basis of Facility-Specific Adjustment Factors for Claim Payments
SC MEDICAID Cost Report
FFS Cost Settlements Claim Payments = Base Rates x Facility-Specific Adjustment Factor
100% Cost Reimbursement for DOS through April 7, 2011
97% Cost Reimbursement for DOS April 8 through July 7, 2011
93% Cost Reimbursement for DOS July 8, 2011 to date
OP Excludes Clinical Lab services paid on Fee Schedule
SC MA DSH Settlements Undercompensated Costs (MA MCO)
Uncompensated Costs (pure Self Pay)
TRICARE Cost Report
Retrospective reimbursement for Capital Costs
(Cost per Day x Tricare Days)
Must file TRICARE form with copies of relative Cost Report pages
COST REPORT Other Uses
Consultants Benchmarking: Premier & Crimson
CPAs
Attorneys
Policymakers MedPAC
Congress
OIG
DOJ
Watchdog Groups
Kaiser Family Foundation
Duke Endowment
AARP
Revenue Cycle Functions Impact on C/R
Accurate Claims Data: Payor Info, Charges and Payments MC, MA, Self Pay Claims
Revenue (UB) Codes Summary of MC = PS&R
Summary of MA = MARS
ICD-9 Codes MS-DRG Assignment
Medical Necessity
Program Payments MS-DRG, APC & FFS
Outliers
Pass Through Costs
MC Bad Debts & MC/MA Crossovers
MC & MA DSH
S-10 Charity & Uncompensated Care
HIT Incentives
For proper determination of Program Cost (i.e. MC or MA); PROGRAM Charges must be reported in same Cost Center as the Total Cost and Total Charges that make-up the CCR
Fully Allocated Allowable Costs / Gross Patient Revenue = CCR
CCR (by Cost Center) X Program Charges = Program Cost
How To Determine Program Cost
The CHALLENGE
Report:
Fully Allocated Allowable Costs
Total Gross Patient Charges
Total Program (MC/MA) Charges
ALL IN THE SAME COST CENTER
WHY IS THIS SO
CHALLENGING?
WHERE THE TWO WORLDS COLLIDE
COST REPORT PATIENT CLAIM
Groups departments into Cost Report COST CENTERS (C/C) for both Total Costs (expenses) and Gross Patient Charges (revenues)
Adjusts actual COSTS (expenses) to
MC ALLOWABLE Costs
Allocates OH Costs to Revenue-Producing Cost Centers
Routine: Fully Allocated Routine COSTS / Total Patient Days = Per Diem
Ancillary: Fully Allocated Deptl COSTS / Gross Deptl Revenues = Cost-Charge-Ratio (CCR)
Reports Charges by Revenue Code
(UB Code) and CPT/HCPCS Code
for Payment
Fro
m a
Cost C
en
ter
to th
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De
part
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eta
il
COST REPORT CROSSWALK - By Cost Center Line #
2552-10
CMS
Category
2552-10
CMS CC
Ln#
CMS LINE DESCRIPTION DEPT #
DEPARTMENT
DESCRIPTION
(General Ledger)
Per Diem or
CCR (Cost-
to-Charge
Ratio)
Overhead
1 CAPITAL RELATED COSTS-BUILDINGS &
FIXTURES
8
Overhead
2 CAPITAL RELATED COSTS-MOVABLE
EQUIPMENT
15
Overhead 4 EMPLOYEE BENEFITS 1
Overhead 5 ADMINISTRATIVE AND GENERAL 22
Overhead 7 OPERATION OF PLANT 4
Overhead 8 LAUNDRY AND LINEN SERVICE 1
Overhead 9 HOUSEKEEPING 1
Overhead 10 DIETARY 2
Overhead 13 NURSING ADMINISTRATION 2
Overhead 16 MEDICAL RECORDS & MED RECORDS LIBRARY 1
Overhead 23 PARAMEDICAL ED. PROGRAM (SPECIFY) 1 Per Diem
Routine
30 ADULTS AND PEDIATRICS (GENL ROUTINE
CARE)
18
Per Diem
Routine 31 INTENSIVE CARE UNIT 1 Per Diem
Routine 43 NURSERY 1 Per Diem
Ancillary 50 OPERATING ROOM 9 CCR
Ancillary 51 RECOVERY ROOM 1 CCR
Ancillary 52 LABOR ROOM AND DELIVERY ROOM 1 CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 4000 Radiology CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 4002 Rad. Ultrasound CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 4006 Rad. Mammography CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 4007 Interventional Imaging CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 5707 Nuclear Medicine CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 6306 SLD Radiology CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 6315 Imaging RN Admin CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 7 CCR
Ancillary 57 COMPUTED TOMOGRAPHY (CT) SCAN 1 CCR
COST REPORT CROSSWALK - By Cost Center Line #
2552-10
CMS
Category
2552-10 CMS
CC Ln# CMS LINE DESCRIPTION
DEPT
#
G/L
DEPARTMENT
DESCRIPTION
(General Ledger)
Per Diem or CCR
(Cost-to-Charge
Ratio)
Overhead 1 CAPITAL RELATED COSTS-BUILDINGS & FIXTURES 8
Overhead 2 CAPITAL RELATED COSTS-MOVABLE EQUIPMENT 15
Overhead 4 EMPLOYEE BENEFITS 1
Overhead 5 ADMINISTRATIVE AND GENERAL 22
Overhead 7 OPERATION OF PLANT 4
Overhead 8 LAUNDRY AND LINEN SERVICE 1
Overhead 9 HOUSEKEEPING 1
Overhead 10 DIETARY 2
Overhead 13 NURSING ADMINISTRATION 2
Overhead 16 MEDICAL RECORDS & MED RECORDS LIBRARY 1
Overhead 23 PARAMEDICAL ED. PROGRAM (SPECIFY) 1 Per Diem
Routine 30 ADULTS AND PEDIATRICS (GENL ROUTINE CARE) 18
Per Diem
Routine 31 INTENSIVE CARE UNIT 1 Per Diem
Routine 43 NURSERY 1 Per Diem
Ancillary 50 OPERATING ROOM 9 CCR
Ancillary 51 RECOVERY ROOM 1 CCR
Ancillary 52 LABOR ROOM AND DELIVERY ROOM 1 CCR
Ancillary 54 RADIOLOGY-DIAGNOSTIC 7 CCR
Ancillary 57 COMPUTED TOMOGRAPHY (CT) SCAN 1 CCR
Ancillary 58 MAGNETIC RESONANCE IMAGING (MRI) 2 CCR
Ancillary 59 CARDIAC CATHETERIZATION 1 CCR
Ancillary 60 LABORATORY 5 CCR
Ancillary 63 BLOOD STORING, PROCESSING, & TRANS. 1 CCR
Ancillary 65 RESPIRATORY THERAPY 2 CCR
Ancillary 66 PHYSICAL THERAPY 4 CCR
Ancillary 69 ELECTROCARDIOLOGY 3 CCR
Ancillary 72 IMPLANTABLE DEVICES CHARGED TO PATIENTS 1 CCR
Ancillary 73 DRUGS CHARGED TO PATIENTS 2 CCR
Ancillary 76 ADULTS AND PEDIATRICS (GENERAL ROUTINE CARE) 1
CCR
Ancillary 76.01 VASCULAR SERVICES 3 CCR
Ancillary 76.02 ONCOLOGY SERVICES 2 CCR
Ancillary 76.03 PURCHASED SERVICES 1 CCR
Ancillary 76.04 DIABETES TREATMENT CENTER 1 CCR
Ancillary 91 EMERGENCY 5 CCR
Non-Reimb 190 GIFT, FLOWER, COFFEE SHOP, & CANTEEN 3
Non-Reimb 194.02 NON-PATIENT CARE SERVICES 1
Excluded Non-op Non-op 2
Grand Count 137
INTERVENTIONAL IMAGING Charge Master (Sample)
FAC DEPT #
(G/L) CDM # CDM DESCRIPTION UB 04 HCPCS PS&R FIM PRICE
C 4007 70520 SZ LOCM 100-199MG/ML IODINE 1ML 0255 Q9965 Drugs Incident to Rad $ 5.00
C 4007 70522 SZ LOCM 200-299MG/ML IODINE 1ML 0255 Q9966 Drugs Incident to Rad $ 5.00
C 4007 70524 SZ LOCM 300-399MG/ML IODINE 1ML 0255 Q9967 Drugs Incident to Rad $ 5.00
C 4007 70360 SZ KYPHOPLASTY KIT EA ADDL FRACT 0270 - Supplies $ 5.00
C 4007 70362 SZ KYPHOPLASTY KIT 1ST FRACT 0270 - Supplies $ 65.00
C 4007 70004 SZ CATH BALLOON GRP 1 0272 C1725 Sterile Supplies $ 65.00
C 4007 70005 SZ CATH BALLOON GRP 2 0272 C1725 Sterile Supplies $ 65.00
C 4007 70006 SZ CATH BALLOON GRP 3 0272 C1725 Sterile Supplies $ 65.00
C 4007 70007 SZ CATH BALLOON GRP 4 0272 C1725 Sterile Supplies $ 250.00
C 4007 70031 SZ GUIDE WIRE GRP 1 0272 C1769 Sterile Supplies $ 250.00
C 4007 70032 SZ GUIDE WIRE GRP 2 0272 C1769 Sterile Supplies $ 250.00
C 4007 70033 SZ GUIDE WIRE GRP 3 0272 C1769 Sterile Supplies $ 250.00
C 4007 70040 SZ INTRODUCER SHEATH GROUP 1 0272 C1894 Sterile Supplies $ 250.00
C 4007 70041 SZ INTRODUCER SHEATH GROUP 2 0272 C1894 Sterile Supplies $ 250.00
C 4007 70042 SZ INTRODUCER SHEATH GROUP 3 0272 C1894 Sterile Supplies $ 250.00
C 4007 70048 SZ NEEDLE MICROPUNCTURE 0272 C1894 Sterile Supplies $ 250.00
C 4007 70065 SZ SNARE GROUP 1 0272 C1773 Sterile Supplies $ 250.00
C 4007 71198 SZ STENT VASCULAR COVERED/COATED 0278 C1876 Implants $ 650.00
C 4007 71276 SZ VASC CLOSURE DEV ANGIOSEAL 0278 C1760 Implants $ 650.00
C 4007 32146 SP PTA PERIPHERAL ART 0320 75962 Radiology - Diagnostic $ 1,700.00
C 4007 32148 SP PTA RENAL OR VISCERAL 0320 75966 Radiology - Diagnostic $ 1,700.00
C 4007 32150 SP PTA VENOUS 0320 75978 Radiology - Diagnostic $ 1,700.00
Dept # (G/L) maps to Cost Center
Charges group on claims by UB Code
CDM (Charge Description Master)
Link Between Claim and G/L?
In Closing…
The Cost Report is where the Financial Accounting
and Patient Accounting come together for what is
typically your larger payors: Medicare and
Medicaid. While cost settlements are somewhat a
thing of the past, the data filed annually on your
cost reports still directly influences both the current
and future reimbursement to the facility. Complete
and accurate data is essential to maximizing the
funding available to your facility.
KNOW YOUR DATA…Translate where necessary.
QUESTIONS?