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1
Optimizing Reimbursement Through the Medicare
Cost Report
Presented by:Susan Ruchin, Senior Manager Glenn Bunting, Director
2
The material appearing in this presentation is for informational purposes
only and is not legal or accounting advice. Communication of this
information is not intended to create, and receipt does not constitute, a
legal relationship, including, but not limited to, an accountant-client
relationship. Although these materials may have been prepared by
professionals, they should not be used as a substitute for professional
services. If legal, accounting, or other professional advice is required, the
services of a professional should be sought.
MOSS ADAMS LLP | 3
PRESENTERSSusan Ruchin, Senior Manager │ Moss Adams LLP
Susan has been in the health care industry for over 25 years, including 10 years working for a Medicare fiscal intermediary in the supervision and audit of large health care chain organizations. She also has six years of experience in hospital settings, where she was responsible for all phases of reimbursement, including Medicare cost report preparation and appeals with the Provider Reimbursement Review Board. Susan assists clients with wage index reviews, geographic reclassifications, and provider-based requirements such as signage, state licensure, and attestations. She also prepares and reviews Medicare cost reports and provides audit support to hospitals, skilled nursing facilities, and federally qualified health clinics during Medicare and Medicaid audits.
Glenn Bunting, Director │ Moss Adams LLP
Glenn has over 20 years of experience in the health care finance industry. With an emphasis on serving health care organizations with Medicare and Medicaid reimbursement and related billing and coding issues, he assists in overseeing the Health Care Consulting Group's Third-Party Reimbursement Practice including charge capture services, cost reporting, appeal services, and medical education programs. Glenn focuses on core reimbursement services, optimization and compliance, Medicare wage index and occupational mix reporting, reimbursement department outsourcing, and Medicare and Medicaid cost report appeals.
4
PRESENTATION OVERVIEW
• Why is the Cost Report Important?• Wage Index Information• Disproportionate Share Hospital (DSH) Payments /
Uncompensated Care• Medicare Bad Debt• Medicare Managed Care Days for GME and HIT
Payments• Charity Care for HIT and DSH Reimbursement• Importance of a Robust Protested Amount List• Best Cost Report Practices
5
THE IMPORTANCE OF YOUR COST REPORT
“Why should I be concerned, there is no settlement impact?”
• You may not see any settlement impact year-to-year, but we are entering a new era in prospective rate setting
• Imperative for providers nationwide to work in unison through:o Homogenous completion of the Medicare cost reporto Aligning costs and charges in the prescribed CMS cost centerso Utilizing “best-practices” with UB-04 revenue and CPT/HCPCS
codes
• Main focus of today is PPS rate setting, but CAH facilities are even more aware of the issue of proper cost center coding
6
THE CAVEAT - WHY WE ARE HERE TODAY
• Medicare cost report in its original form not designed to support estimate of costs at DRG and APC level
• To increase integrity of changing & designing new DRG and APC weights, a workgroup of hospital experts was convened by the AHA
• Workgroup’s recommendations were:o To achieve more accurate DRG cost-based weights -
All hospitals should prepare their Medicare cost reports so Medicare charges, total charges and overall costs are aligned with each other and with the categories currently utilized in MedPAR file
o The workgroup considered changes to - Uniform Bill (UB) formats, revenue codes Cost Report, and MedPAR
7
THE MEDICARE COST REPORT
• Currently, the Medicare cost report is CMS’ only standardized cost finding tool for Hospitals, SNFs, HHAs, etc.
• In lieu of “standard federal general ledger format,” CMS believes cost report is reasonable / effective alternative
Food For Thought• B-1 step down allocation has not been revised since
inception• But... calculations within the cost report contain
information beneficial to both Medicare and You
8
HOW DOES CMS USE COST REPORT DATA?
Three primary areas:• Revise DRG & APC weights• Market basket relative weights to update payment rates
for the CMS Prospective Payment System • Analyze payment adequacy (is Medicare paying fair and
efficient rates for different classes of providers for different types of services)
9
MARKET BASKET ADJUSTMENT (AVG WEIGHT)
Major expenditure categories used for update:1) Wages and salaries 45.8192) Employee benefits 12.7133) Contract labor 1.8064) Pharmaceuticals 1.3305) Malpractice insurance 5.4026) Blood and blood products 1.0697) Residual (all other) 31.861
Total100.000
10
WHAT DATA DOES CMS USE FROM THE REPORT?
• Wage index information• Total salary & non-salary costs before allocation &
adjustments from WKS A to the various cost components
• Total costs before and after allocation from WKS B• Capital Market Basket (capital costs directly
assigned and capital cost data from WKS A-7)
11
REPORT DATA FIELDS NOT COMPLETED
• Fields on the report not completed can be problematic (i.e. bias in the cost weight)o Example: Blood not separated for the majority of
hospitals.
• Could be acceptable if the provider’s costs for that field are representative of all other providers
• Although problematic if the blood costs are not representative.
12
MALPRACTICE COSTS
• WS S-2 reporting of malpractice costs• 1,200 hospitals reported no costs for
malpractice, paid losses and/or self insurance information
• How does this impact the market basket?
13
CONSEQUENCES OF FLAWED REPORTING
• To the extent that providers do not fill in cost report fields, CMS is compelled to make assumptions about costs
• Resort to judgment based methods (instead of strict computational methods) for deriving representative market basket cost weights.
• Example of blood cost weight in the PPS market basket. Over 1,500 hospitals did not report blood costs separately on the cost report.
14
CMS RECEIVES SPECIAL REQUESTS
• Payment and Cost Analyses Examples:o Simulate margins assuming the implementation of
payment policy changeso Determine the percentage of hospitals in each
margin range by critical access status, ownership type, and bed size to determine if the hospitals could afford to implement measures for influenza or Ebola outbreaks
15
PROVIDER REIMBURSEMENT MANUAL
• Provides guidelines and policies to implement Medicare regulations which set forth principles for determining the reasonable cost of provider services furnished under the Health Insurance for the Aged Act of 1965, as amended.
• Procedures and methods have been devised to accommodate program needs and the administrative needs of providers and their intermediaries and will assure that the reasonable cost regulations are uniformly applied nationally without regard to where covered services are furnished.
• CMS’ interpretation of Federal Regulations/Laws which dictate what and how providers report their operating outcomes to CMS.
16
COST CENTER DEFINITION
PRM 15-1 § 2302.8 Cost Center• An organizational unit, generally a department or
its subunit, having a common functional purpose for which direct and indirect costs are accumulated, allocated and apportioned.
• Natural expense classifications (e.g., depreciation) and non-allowable cost centers (e.g., research) specifically required by the instructions fall under this definition.
17
COST CENTERS VS. GL DEPARTMENTS
Cost Centers:• May include more than one GL department• Non-Allowable Costs vs. NRCCs (e.g. Hospital Based Phys.)GL Departments:• Specific to the entity• Expenses and Revenues may need to be reclassified
o Examples: Blood Products Medical Supplies Pharmaceuticals
©2014 The Advisory Board Company • advisory.com
Volume Performance
Source: CMS, “2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” May 31, 2013, available at: http://downloads.cms.gov/files/TR2013.pdf; Health Care Advisory Board interviews and analysis.
Medicare to Become Majority of Volume by 2022
Projected Number of Medicare Beneficiaries
Millions of Beneficiaries
54.0
55.6
57.3
59.0
60.7
Average Inpatient Case Mix By Volume
n = 785 Hospitals
2012 2022
42%
58%
19%
15%
33%
25%
6% 2%
Medicare
Medicaid
Commercial
Self-Pay
2014 2016 2018 2020 2022
18
MOSS ADAMS LLP | 19
WHY IS WAGE INDEX INFORMATION IMPORTANT?
• Medicare Inpatient DRG Reimbursement• Medicare Outpatient APC Reimbursement• Medicare Inpatient Psych Facility (IPF)
Reimbursement• Medicare Inpatient Rehabilitation Facility (IRF)
Reimbursement• Medicare Inpatient Skilled Nursing Facility (SNF)
Reimbursement• Other Health Plans Use Medicare Data Elements for
Payment
MOSS ADAMS LLP | 20
DRG PAYMENT RATES: WAGE INDEX > 1.0000
FFY 2014 Final(8/19/13 FR)
FFY 2015 Final (10/3/14 FR
Corrected)
Labor-Related $3,737.71 $3,784.75
Non-Labor 1,632.57 1,653.10
Capital 429.31 434.97
Total Payment Rate $5,799.59 $5,872.82
Increase of $73.23 or 1.26% from prior year
The data above assumes hospital is submitting quality data and is a meaningful EHR user.
MOSS ADAMS LLP | 21
DRG PAYMENT RATES: WAGE INDEX <=1.0000
FFY 2014 Final(8/19/13 FR)
FFY 2015 Final (10/3/14 FR
Corrected)
Labor-Related $3,329.57 $3,371.47
Non-Labor 2,040.71 2,066.38
Capital 429.31 434.97
Total Payment Rate $5,799.59 $5,872.82
MOSS ADAMS LLP | 22
WAGE INDEX DATA USED BY CMS
• Step 1: CMS Obtains Hospital Average Hourly Wage From WS S-3, Part III, Line 6
• Step 2: CMS Applies Adjustments to Average Hourly Wageo Overhead Allocation Appliedo Occupational Mix Adjustmento Midpoint Adjustment to Normalize the Datao Inflation Adjustment
MOSS ADAMS LLP | 23
STATE OF HAWAII FINAL AVERAGE HOURLY WAGE FOR FFY 2015
Average Hourly Wage0.00
10.00
20.00
30.00
40.00
50.00
60.00 54.66
50.5547.48
45.07 45.07 44.66 42.60 42.17 41.75 41.25 41.05 40.82
Kaiser Hospital Hawaii (U) The Queens Medical Center (U)
Pali Momi Medical Center (U) Castle Medical Center (U)
Straub Clinic and Hospital (U) Wilcox Memorial Hospital (R)
Maui Memorial Medical Center (U) Kuakini Medical Center (U)
Wahiawa General Hospital (U) North Hawaii Comm. Hospital (R)
Hilo Medical Center (R) Kona Community Hospital (R)
24
WAGE INDEX DATA USED BY CMS
• Step 3: Adjusted Hourly Wage Data Grouped by County or Counties and Averaged With a Core Based Statistical Area (CBSA)o CBSA determined by OMBo CBSA designations can change every 10 yearso CBSAs can change through legislative means!
25
WAGE INDEX DATA USED BY CMS
• Step 4: CBSA Average Hourly Wage Compared to National Average Hourly Wageo If CBSA is equal to National, Wage Index Factor is
1.0000o If CBSA is less than National, Wage Index Factor is
less than 1.000o If CBSA is greater than National, Wage Index Factor
is greater than 1.000
26
HI WAGE INDEX FACTOR TRENDS
FFY 2012 FFY 2013 FFY 2014 FFY 2015
HI URBAN 1.1428 1.2016 1.2164 1.23
HI RURAL 1.1295 1.0718 1.0709 1.0572
MAUI COUNTY
1.1295 1.0718 1.0709 1.0737
0.9751.0251.0751.1251.1751.225
Federal Fiscal Year
WI F
acto
r
MOSS ADAMS LLP | 27
WESTERN REGION WAGE INDEX FACTOR FOR FFY 2015
Hawaii
Mau
i Memoria
l
Califonia
Oregon
Wash
ington
Alaska
0.00000.20000.40000.60000.80001.00001.20001.40001.60001.80002.0000
1.2301.074
1.724
1.155 1.2071.307
1.057 1.288 0.998 1.086 1.307
HIGHEST URBAN AREASTATEWIDE RURAL
28
WAGE INDEX DATA ELEMENTS
• What are the data elements reported in the Medicare cost report that comprise the wage index information and set my Medicare payment?o Salaryo Paid Hourso Contract Labor and Hourso Physician Part A Compensation and Hourso Wage Related Cost - Benefits
29
SALARY REPORTED ON WS A, COL. 1
• Direct salaries and wages, including amounts for related paid vacation, holiday, sick leave, other paid-time-off (PTO), severance pay, and bonus pay for personnel associated with the line item.
• Bonus pay includes award pay and vacation, holiday, and sick pay conversion (pay in lieu of time off).
30
SALARY REPORTED ON WS A, COL. 1
• Source for WS A Salaries: General Ledger• General Ledger Includes:
o Cost paid during the yearo Cost accrued during the year
• Salary and PTO Includes Both Paid and Accrued Expense
• WS A, Col. 1 Salary Flows to WS S-3, Part II, Col. 2
31
PAID HOURS REPORTED ON WS S-3, PART II
• Source for Hours: Payroll Report• Paid hours include regular hours (including
paid lunch hours), overtime hours, paid holiday, vacation and sick leave hours, paid time-off hours, and hours associated with severance pay.
• On call hours are not to be included in the total paid hours
MOSS ADAMS LLP | 32
PAID HOURS REPORTED ON WS S-3, PART II
• Overtime hours are calculated as one hour when an employee is paid time and a half
• No hours are required for bonus pay• Full Time Intern and Residents – 2,080 Hrs.• Full Time Salaried Employees Paid Fixed Rate –
2,080 Hrs (based upon 40 hrs. / week).
MOSS ADAMS LLP | 33
CONTRACT LABOR REPORTED ON WS S-3, PART II
Note: All contract labor expense should be reported on WS A, Col. 2• Line 11: Direct patient care services include
nursing, diagnostic, therapeutic, and rehabilitative services. o Report only personnel costs – no supplies or non-
salary cost.o Do not include costs applicable to excluded areas
reported on line 9 and 10
34
CONTRACT LABOR REPORTED ON WS S-3, PART II
• Line 12: Contracted top level management services (routine and ancillary patient care cost centers)
• Line 13: Physician Part A administration paid under contract
oPer time study data reported on WS A-8-2oMedical directors
35
CONTRACT LABOR REPORTED ON WS S-3, PART II
• Line 14: Salary and hours associated with the home office and/or regional office cost statemento Apply same hospital related salary and hours
procedures to home office / regional office o Include a directly assigned or allocated share of
employee benefit expense
• Line 15: Salary, hours and wage related cost associated with home office Physician Part A Administration
36
OTHER CONTRACT LABOR WS S-3, PART II
• Line 28: A&G Under Contracto Contract information / data processing serviceso Legal feeso Tax preparation feeso Cost report preparation feeso Purchasing services
Do not include the same costs on this line and lines 11 or 12
37
OTHER CONTRACT LABOR WS S-3, PART II
• Line 33: Housekeeping Under Contract• Line 35: Dietary Under Contract
Hours may need to be obtained from contract with vendor or from the vendor directly
38
WAGE RELATED COST WS S-3, PART II
• Allowable wage related costs (i.e. employee benefits) are listed and reported on WS S-3, Part IV.o Retirement Cost (4 types)o Plan Administrative Expense (Legal, Accounting, Admin)o Employee Health Insurance (Prescription Drug, Dental, Vision)o Life, Accident and Disability Insuranceo Long Term Care Insuranceo Workers Compensationo Retirement Health Insuranceo Taxes (FICA, Medicare, SUI, FUI)o Other (Tuition, Day Care, Executive Deferred Comp)
39
WAGE RELATED COST WS S-3, PART II
• Unless wage related costs are directly assigned to specific cost centers, expenses are allocated between the following areas using salary as a proxy:o Core (general service, routine, ancillary, outpatient)o Excluded (Rehab, Psych, SNF, NRCC)o Non-Physician Anesthetist (Part A and Part B)o Physician Part A Administrativeo Physician Part A Teachingo Physician Part Bo RHC / FQHCo Intern and Resident
40
WAGE RELATED COST WS S-3, PART II
• Retirement Costs Reported on a Cash Paid Basis:o 401K Employer Contributionso Tax Sheltered Annuityo Nonqualified Defined Benefit Plan
• Retirement Costs Reported on a 3 Yr. Average Methodology (WS S-3, Part IV, Exhibit 3):o Qualified Defined Benefit Plan
Need Cash Contribution to Plan Documents Actuary Report(s) and IRS Form 5500
MOSS ADAMS LLP | 41
WAGE RELATED COST WS S-3, PART II
• Health Insuranceo Purchased Health Insurance
Premium costs, and costs paid to external organizations for plan administration
o Self Funded Health Insurance Costs paid to external organizations for plan administration Cost hospital incurs in providing services under plan to its
employees
o Health-Related Services Health services not covered employee’s plan Provided by hospital at no cost or a discount
MOSS ADAMS LLP | 42
OTHER WAGE RELATED COST WS S-3, PART II
• Qualifying Criteriao Exception to the core list on WS S-3, Part IVo The wage-related cost has not been furnished for the
convenience of the providero The wage-related cost is a fringe benefit as defined
by the IRS (e.g. unrecovered cost of employee meals, education costs, auto allowances)
o The total cost of the particular wage-related cost for employees whose services are paid under IPPS exceeds 1 percent of total salaries
MOSS ADAMS LLP | 43
DSH/UNCOMPENSATED CARE
• Must meet DSH payment formula’s 15% qualifying threshold in order to receive uncompensated care payment
• No change to eligibility requirements for DSH or uncompensated care for FY 2015
• FFY 2015 gross DSH payments estimated at $13.383B in the final rule compared to $14.205B in the proposed rule
• 25% of DSH = $3.346 billion• Factor 1 – uncompensated care = $10.037 billion
MOSS ADAMS LLP | 44
DSH/UNCOMPENSATED CARE IMPACT
MOSS ADAMS LLP | 45
DSH/UNCOMPENSATED CARE
• Factor 3 is hospital-specific value• Medicaid days taken from the 2011/2012 cost
reports (March 2014 HCRIS)• CMS used FFY 2011 in proposed rule• CMS used FFY 2012 SSI published June 2014 for
Factor 3 in FY 2015 Final Ruleo SSI ratios based on FFY, not hospital fiscal yearo May impact uncompensated care payments shown
on following slides
MOSS ADAMS LLP | 46
UNCOMPENSATED CARE INFOFY 2015 IPPS FINAL Rule: Implementation of Section 3133 of the Affordable Care Act - Medicare DSH - Supplemental Data
StateTotal Uncompensated Care for All
Hospitals - 10/1/2014 - 9/30/2015Estimated Per Claim Amount % Uncompensated Care $ to Total $
Alaska
$8,321,249$ 778.39
0.10%
Arizona
150,330,961 1505.26 1.76%
California
1,058,279,674
2,381.14 12.36%
Colorado
75,279,990
1,281.80 0.88%
Florida
97,209,416
5,974.11 1.14%
Hawaii
17,759,171
1,293.88 0.21%
Idaho
21,442,732
1,152.79 0.25%
Montana
9,812,103
652.13 0.11%
Nevada
57,993,655
1,282.58 0.68%
New Mexico
45,707,445
1,299.18 0.53%
New York
937,520,318
2,095.46 10.95%
Oregon
67,365,102
1,168.60 0.79%
Texas
732,239,185
1,705.56 8.55%
Utah
38,059,158
4,342.04 0.44%
Washington (excl Group Health)
129,946,883
12,071.53 1.52%
Group Health
897,284
448,642 0.01%
Total All States
$8,561,050,684
$1,588.61 100.00%
Total $ Nationwide Average per claim
MOSS ADAMS LLP | 47
MEDICAID ENROLLMENT AS A PERCENT OF TOTAL POPULATION & RECENT CHANGESKAISER FAMILY FOUNDATION
Ranking StateMedicaid
Enrollment as % of Total Pop
(2010-11)
Medicaid Beneficiaries
As of 2010 (est)
% change in Medicaid
Enrollment(2011-12)
Status of State Action on the Medicaid Expansion Decision as of December
2013
1. District of Columbia 35% 210,603 +5% Implementing Expansion in 2014
2. California 31% 11,548,726 +2% Implementing Expansion in 2014
3. Maine 31% 411,792 -1% Not Moving Forward at this Time
4. Vermont 31% 193,980 +3% Implementing Expansion in 2014
5. New York 29% 5,619,650 +3% Implementing Expansion in 2014
6. New Mexico 28% 576,570 0% Implementing Expansion in 2014
27. Washington 20% 1,344,908 +5% Implementing Expansion in 2014
29. Hawaii 19% 258,457 +4% Implementing Expansion in 2014
30. Alaska 18% 127,842 +4% Not Moving Forward at this Time
39. Oregon 17% 651,283 +5% Implementing Expansion in 2014
46. Nevada 13% 351,072 +8% Implementing Expansion in 2014
United States 21% 65,711,913 +3%
MOSS ADAMS LLP | 48
NEW HOSPITALS / NEWLY MERGED
• Hospitals that merge after final rule issued to be treated similar to new hospitals
• Final uncompensated care determined at cost report settlement
• Once new hospital has established DSH eligibility, hospital eligible for uncompensated care paymentso Calculated retroactively upon final settlement
MOSS ADAMS LLP | 49
DSH – REALIGNMENT & REQUESTS
REMINDER• 42 CFR 412.106(b)(3) allows a hospital to request to
have the SSI ratio recomputed based on the hospital’s cost report yearend
50
MEDICARE BAD DEBT
• 42 CFR 413.89(e) Criteria for allowable bad debt. A bad debt must meet the following criteria to be allowable:
• (1) The debt must be related to covered services and derived from deductible and coinsurance amounts.
• (2) The provider must be able to establish that reasonable collection efforts were made.
• (3) The debt was actually uncollectible when claimed as worthless.
• (4) Sound business judgment established that there was no likelihood of recovery at any time in the future.
MOSS ADAMS LLP | 51
MEDICARE BAD DEBTAllowable Bad Debt Percentage for Cost Report -
Provider TypePeriod Began
10/1/2012Periods Began
10/1/2013
FFY 2015 (10/1/2014)
and After
Hospitals 65% 65% 65%
SNFs, Non Dual Eligibles 65% 65% 65%
Swing-Bed Hospitals, Non Dual Eligibles 65% 65% 65%
SNFs & Swing-Bed Hospitals, Dual Eligibles 88% 76% 65%
CAHs 88% 76% 65%
ESRDs 88% 76% 65%
CMHCs 88% 76% 65%
FQHCs/RHCs 88% 76% 65%
Cost Based HMOs 88% 76% 65%
Health Care Pre-Payment Plans 88% 76% 65%
Competitive Medical Health Plans 88% 76% 65%
52
MEDICARE BAD DEBT
• Two Categories of Bad Debt: Indigent and Non-Indigent (i.e. Regular)o No collection effort required for indigent but must
bill to Medicaid to ensure there is no obligation by the State to pay
o Regular bad debt must exhaust all collection efforts before it can be claimed for reimbursement on the Medicare cost report
53
MEDICARE MANAGED CARE DAYS
• Used in the calculation of Graduate Medical Education (GME) payment reimbursement
• Simulated DRG payment originating from Medicare managed care days is used in Indirect Medical Education (IME) payment reimbursement
• Used in the calculation of HIT payment reimbursement
• Used in the calculation of the SSI ratio of the DSH payment calculation
54
MEDICARE MANAGED CARE DAYS
• Medicare managed care days must be billed to the Medicare Administrative Contractor (MAC) and a no-pay bill must be generated in order to ensure these days are counted for GME, IME, HIT and DSH payment purposes.
• Providers are required to submit no-pay bills for all Medicare managed care activity.
• PS&R Report 118 – Medicare managed care activity
55
CHARITY CARE
• Reported on Worksheet S-10• Instructions are vague and inconsistent• CMS to issue uniform instructions at some
point in the future• Used as a component of the HIT payment• Could be used in the future as a proxy to
distribute the DSH uncompensated care payment
MOSS ADAMS LLP | 56
PROTESTED AMOUNTS
• What is a Protested Amount List and Why is it Important?o In simplistic terms it’s a list of disputed issueso Allows one to file a compliant Medicare cost report while
preserving an avenue to benefit from court litigation on a disputed issue
o Cannot file an appeal unless there is an audit adjustment – CMS requires audit adjustments of protested amounts in NPRs
o Successful appeals provide future revenue streams
• Appeals are Now Developed Prior to Cost Report Filing
MOSS ADAMS LLP | 57
PROTESTED AMOUNTS
• Key Elements of a Compliant Protested Amount Listo Must fully describe your issue in disputeo Must provide an accurate protested amount
calculation that fully identifies the disputed data element(s), DSH disputed patients etc.
o Calculation is becoming as important as description of the issue in dispute.
o Must ensure your calculated protested amount is input on the appropriate line of the cost report.
MOSS ADAMS LLP | 58
PROTESTED AMOUNTS
• Example of an Inadequate Protested Amount:o DSHo DSH SSIo DSH Eligible Dayso FTEso HIT Paymento Uncompensated Care Payment
• Consequence: o Jurisdictional Challenge
MOSS ADAMS LLP | 59
PROTESTED AMOUNTS
• Example of a Compliant Protested Amount:o Understated DSH payments due to the fact the SSI
Ratio, as published by CMS, is developed on a federal fiscal year basis in lieu of being developed on a cost report period basis
MOSS ADAMS LLP | 60
PROTESTED AMOUNTS
Protested Amounts to be Considered:1. Accuracy of SSI Ratio2. SSI Ratio Realignment3. SSI Ratio Compliance with Section 951 of 2003 MMA 4. CMS Ruling 1498R Non-Covered Part A Days in SSI Ratio5. CMS Ruling 1498R Non-Covered Part C Days in SSI Ratio6. Exclusion of DSH Non-Covered Dual Eligible Part A Days7. Exclusion of DSH Non-Covered Dual Eligible Part C Days8. Additional Medicaid Eligible Days9. DSH Uncompensated Care Payments
MOSS ADAMS LLP | 61
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):10. Understated HIT Payment due to Medicare Part C Days11. Understated HIT Payment due to Charity Care Charges12. 2 Midnight Rule 0.2 Payment Reduction13. Understated Nursing and Allied Health Payments14. Understated Medicare Bad Debt – Documentation
Pending15. Understated Medicare Bad Debt – Share of Cost Claims16. Understated Medicare Bad Debt due to Write-Off Date17. Understated Medicare Settlement Data – Omitted Claims18. Understated Medicare Settlement Data – Incorrect Calc.
MOSS ADAMS LLP | 62
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):19. Omission of Low Volume Adjustment Add-On Payment20. LVA – Inclusion of Medicare Part C Discharges21. SCH – Errors in CMS 2007 Adjustment Factor22. SCH – Denial of Uncompensated Care Pool Payment23. I&R FTEs – Additional FTEs Not Claimed24. Understated GME / IME–Exclusion of Medicare Part C
Days25. Understated GME / IME – Unaccredited Training Program26. Understated GME / IME – Time Spent in Elective Rotations27. Understated GME / IME – Initial Residency Programs
MOSS ADAMS LLP | 63
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):28. Understated GME / IME – FTE Cap & Affiliation Agreement29. Understated GME / IME – Prior Yr./Penultimate Yr. FTEs30. Understated IME – Prior Year Available Bed Count31. Understated IME – Licensed Bed v Available Bed Count32. Understated GME / IME – IRIS Program Software Errors33. Understated GME / IME – Understated Medicare Set Data34. Prior Year Audit Adjustments Incorporated in CY Cost
Report
64
BEST PRACTICES
• Report Preparationo Documentation is first priority
Maintaining accurate reports throughout year Staff turnover creates confusion & uncertainty Consistency and efficiency are key
o Begin the process as early as possibleo DILLY/SALY no longer are acceptableo Incorporating prior MAC adjustments
65
BEST PRACTICES
• Reimbursement Optimizationo Keeping up with regulationso Flexibility of mindsets and cost/benefit
considerations
• Department communicationo Accounting and business office staff need to work in
unison on cost report items
66
EXTRACTING USEFUL/OPTIMAL DATA
• Revenue Usage Reports• Job Costing Detail (Labor Distribution Reports)• Time-Study Logs• Using PS&R for internal use
67
Questions?
Thank you!
Susan Ruchin Glenn Bunting(480) 366-8369 (916) [email protected] [email protected]