Advancing Healthcare Integrity 7/18/2015 5:21:16 PM 8303-08 1 Hospital Cost Report Data Data Mining for Benefit Integrity Presenters: Greg Dobbins, Jane

Advancing Healthcare Integrity04/19/23 05:38 AM 8303-08 1

Hospital Cost Report DataData Mining for Benefit Integrity

Presenters:Greg Dobbins, Jane Grover and Marcus Israel

12th Annual Medicare/Medicaid Statistics and Data Analysis Conference

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Presentation Sections

• Background

• Relational Database Structure of Cost Reports

• Programming and SAS Basics

• Analysis Methodology

• Results

• Contact Information

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Background

• Program Vulnerabilities Identification

• Discover Specific Facilities and Take Action

• Reconnaissance and Collaboration with Other:

–Program Safeguard Contractors (PSCs)

–Medicare Administrative Contractors (MACs)

–Fiscal Intermediaries (FIs)

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• American Samoa (B)• Guam (B)• Northern Mariana Islands (B)

AK(A/B)

WA(A/B)

OR(A/B)

NV(B)

AZ(A/B)

CO(B)

WY(A/B)

SD(A/B)

ND(A/B)

MN(A)

IA(B)

HI(B)

ID(A/B)

UT(A/B)

MT(A/B)

Western Integrity Center (WIC)Program Safeguard Contractor

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Background

• Law Enforcement Suggestions for Proactive Analysis

• Cost Report Data Supplements Claims Data

• Collaborate with FI/MACs to Focus on Important Vulnerabilities

• Cost Reports are Certified by Officer or Administrator of Provider(s)

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Areas Where Cost-Based Reimbursement is Settled through the Cost Report

• Organ Acquisition Costs

• Bad Debts

• Intern and Residents Medical Education

• Disproportionate Share Hospitals (DSH)

• Outlier Payments – Inpatient and Outpatient

• New Technology

• Critical Access Hospitals

• Children’s Hospitals

• Specialty Hospitals

• Cancer Hospitals

• Wage Index

• Medicare Dependent Hospitals

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Cost Report Certification – Worksheet S, Part I

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Certification by Officer or Administrator of Provider (s)

I HEREBY CERTIFY that I have read the above statement and that I have examined the accompanying electronically filed or manually submitted cost report and the Balance Sheet and Statement of Revenue and Expense prepared by …..and that to the best of my knowledge and belief, it is a true, correct and complete statement prepared from the books and records of the provider in accordance with applicable instructions, except as noted. I further certify that I am familiar with the laws and regulations regarding the provision of health care services and that the services identified in this cost report were provided in compliance with such laws and regulations.

Cost Report Certification – Worksheet S, Part I

Misrepresentation or falsification of any information contained in this cost report may be punishable by criminal, civil, and administrative action, fine, and/or imprisonment under federal law. Furthermore, if services identified in this report were provided or procured through the payment directly or indirectly of a kickback or where otherwise illegal, criminal civil, and administrative action, fines and/or imprisonment may result.

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Predication for Critical Access Hospital Analysis

• Homogeneous Population of Facilities

–25 Beds

–4 day Average Length of Stay

• 25% of CAHs Nationwide are within WIC Jurisdiction

• Over Past Several Years CMS and Rural Healthcare Lobbyists have Increased CAH Reimbursement Rates

• Prior Complaints and Referrals based on Increased Financial Consultant Activity

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Cost Report Worksheet SpecificationsSample of Specifications for Worksheets S, A, B, C

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Cost Report Worksheet SpecificationsSample of Specifications for Worksheets C, D, and E

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Cost Report Worksheet SpecificationsSample of Specifications for Worksheets E, E-2, and E-3

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Cost Report Worksheet SpecificationsSample of Specifications for Worksheets G, H, L, and M

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Multi-disciplinary Approach

• Data and Statistical Analysts

• Healthcare Fraud Investigators

• Audit and Reimbursement Accountants

• Medical Director

• Program Management

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Cost Report Relational Database Structure

• There are three main tables in the CMS Hospital Cost Report Information System (HCRIS) Relational Database (RDB)

–The report table

–Alpha numeric table

–Numeric table

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Relational Database Structure

• There are three main tables in the HCRIS RDB

Report Table (Control Information)

Report Record Number (PK)

Provider Number

Provider Control Type

FY Begin Date

FY End Date

Process Date

FI Receipt Date

Alpha Numeric Table (Character and Numeric Data)

Report Record Number (FK)

Worksheet Code

Column Number

Line Number

Item or Data Value (Text)

Numeric Table (Numeric Data)


Worksheet Code

Column Number

Line Number

Item or Data Value (Number)

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• The Report Table– Control Information

– Report Record Number• Primary Key or Linking field



Provider Number


FY Begin Date

FY End Date

Process Date

FI Receipt Date



Worksheet Code

Column Number

Line Number




Worksheet Code

Column Number

Line Number


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• The Alpha-Numeric table– Alpha-numeric data

• Hospital name, address, etc.

• Text response to questions, i.e. urban or rural classification, teaching hospital or not, etc.



Provider Number


FY Begin Date

FY End Date

Process Date

FI Receipt Date



Worksheet Code

Column Number

Line Number




Worksheet Code

Column Number

Line Number


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• The Numeric Table– Numbers only

• Medicare inpatient days

• Medicare cost

• Cost to charge ratios,



Provider Number


FY Begin Date

FY End Date

Process Date

FI Receipt Date



Worksheet Code

Column Number

Line Number




Worksheet Code

Column Number

Line Number


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What Facilities Appear in These Reports?

• A hospital cost report is submitted yearly by all hospitals. It is a kind of analog for what we know on an individual basis as “filing our income tax return.”

• The distribution of hospitals that submit hospital cost reports is given in the Table below.

Type Details Code Count

PPS Short term (General and Specialty) Hospitals 0001-0999 4353

CAH Critical Access Hospitals 1300-1399 1291

PSYHOS_F Psychiatric Hospitals (Excluded from PPS) 4000-4499 508

LTH25 Long Term Hospitals (Excluded from PPS) 2000-2299 414

LTRH Rehabilitation Hospitals (Excluded froM PPS) 3025-3099 245

CHILDREN Children’s Hospitals (Excluded from PPS) 3300-3399 81

CSH Religious Non-medical Health Care Institutions 1900-1999 18

TOTAL ALL TYPES IN 2006 COST REPORT DB ALL STATES 6910

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Programming basics using SAS

• Download

• Import tables as *.CSV files

• Merge by report record number

–Report table

–Alpha numeric table

–Numeric table

• Get data fields of interest

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Programming basics using SAS

• Some code details

/*Worksheet S2 data*/ if ws='S200000' then do;

if line='03003' and col='0100' then ambulance=item;

if line='00200' and col='0100' then HOSPNAME=item;

end;

• This example is relevant to a later section related to an analysis of CAH Ambulance billing.

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Analysis Methodology and Results to Date

• Cost Per Diem Analysis. This analysis identified Critical Access Hospitals with a surge in cost per diem during the four year cost reporting period 2003 – 2006. – Financial records from one Northwest Facility are under review.

• Critical Access Hospital Ambulance Claims Analysis. This analysis identified hospitals which were inappropriately claiming cost reimbursement for ambulance services– WIC has submitted a vulnerability report, caused one hospital to

reprocess claims, and is determining the appropriate action for another hospital.

• Financial Analysis. The objective of financial analysis is to examine and develop relationships between assets, expenses, bad debt and Medicare costs that are “normally” true in hospital cost reports. – Once these patterns are developed then “outliers” can be

identified and investigated.

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Cost Per Diem Analysis Methodologies

• Cost Per Diem was calculated using CAH Inpatients Cost Report Data from the CMS website. In order to look for trends, four years of cost report data was considered: 2003, 2004, 2005 and 2006.

• We flagged the facilities having reports for all four years and such that the following outlier criterion is satisfied. The outlier criterion is:

– the inpatient cost per diem average for the last two years (2005, 2006) be at least 50% greater than the same average for the first two years (2003, 2004).

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Cost Per Diem Data

Data Item Workbook Worksheet

IDWorksheet

Row #WorksheetColumn #

Medicare Inpatient Days ( D ) 255296_S S300001 01200 0400

Medicare Inpatient Cost ( C ) 255296_D D10A181 04900 0100

• To get this data, the cost reports were downloaded from the CMS site.

• Workbook 255296_S contained the necessary information. Table below gives the details of the data acquisition.

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Cost Per Diem Analysis

• Six Facilities Identified

• One Under Investigation

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CAH Ambulance Analysis

• Issue

• Part A Data – TOB 85, Rev Code 054X, Condition Code B2

• Cost Report Data – Worksheet S-2, Line 30.03

• Part B Data - Ambulance

• Geographic analysis

• Detective work

• Putting it all together

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• Issue

–Paid on Reasonable Cost or Ambulance Fee Schedule

–35 mile driving distance requirement

–Code of Federal Regulations, Title 42, Chapter IV, Part 413.70

• Definitions

–Condition Code B2: “Attestation by Critical Access Hospital that it meets the criteria for exemption from the Ambulance Fee Schedule”

–Cost Report Worksheet S-2, Line 30.03: If this facility qualifies as a CAH is it eligible for cost reimbursement for ambulance services (12/21/00s). Enter a “Y” for yes or a “N” for no. If yes, enter in column 2 the date eligibility determination was issued. (See 42 CFR 413.70(b)(5))

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The two items, condition code B2 on the claims and a “Y” on the cost report, should be in sync with each other.

Either they should both be used

or

No condition code B2 should be used on the claim and an “N” should be entered on the cost report.

Both are used to indicate eligibility or non-eligibility for cost reimbursement based on the 35-mile driving distance requirement.

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Vulnerabilities – where the 35-mile criteria is NOT met• Vulnerability #1 – CAH billing with condition code B2 on its claims

and a “Y” on Line 30.03 of the cost report

• Vulnerability #2 – CAH billing with condition code B2 on its claims and an “N” on Line 30.03 of the cost report

• Vulnerability #3 – CAH billing without condition code B2 on its claims but using a “Y” on Line 30.03 of the cost report

Effect of Condition Code B2 on Beneficiary Co-Pay

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Data Analysis

• Part A Claims Data– Find all CAHs billing for ambulance service

– Determine which are billing with condition code B2

• Part A Cost Report Data– Find which providers of ambulance service are entering a “Y” on

Line 30.03 of Worksheet S2

• Part B Ambulance Claims Data and Provider Data– Find active providers of ambulance service– Determine physical location (data system, MCS, phone calls)– Need to know where the Part B provider “parks” its

ambulance vehicles

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Detective Work

• Compare Part B Ambulance locations with CAH locations billing ambulance on a cost reimbursement basis (either condition code B2 OR “Y” on the cost report)

– Use longitude and latitude

– Use program to determine distance from center of one zip to center of another zip code

– Printed maps

– On line mapping programs, e.g., Mapquest

– Check mileage using odometer

• Don’t forget to compare a CAH to other CAHS in the vicinity which also bill for ambulance

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• Findings – Washington and Oregon– Hospital A billed with a “Y” on the cost report and no condition code

B2. It was NOT eligible for cost reimbursement. Total overpayment for four years = $406,402.

– Hospital B billed with a “Y” on the cost report and condition code B2. It was NOT eligible for cost reimbursement. Total overpayment for two years = $157,812.

– Hospital C billed with an “N” on the cost report but used condition code B2 on its claims. Cost report handled correctly but beneficiary copays were too high. Provider has been asked to submit claim adjustments.

– Hospital D billed with a “Y” on the cost report and condition code B2. It does not appear to be eligible for cost reimbursement. In process of referral or cost report adjustment or both. Also seeking CMS clarification.

– Hospital E billed with a “Y” on the cost report and condition code B2. Situation referred to CMS

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• Outcome to Date – two states

–Cost Report Adjustments by the FI for two providers

–One provider adjusting all claims

–Clarification being sought from CMS (now at the Rural Health Council, CMS Central Office)

–One provider (Hospital D) may be either a referral or cost report adjustment or both

–Vulnerability Report submitted to CMS

• CAH Ambulance providers in other WIC states being reviewed

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Financial Analysis

• Bad debt process for analysis

• Facilities identified for further investigation

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Financial Analysis

• The objective of financial analysis is to examine and develop relationships between assets, expenses, bad debt and

• Medicare costs that are “normally” true in hospital cost reports. Once these patterns are developed then “outliers” can be identified and investigated. Several “outliers” are identified for further investigation.

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Financial Methodology Hypothesis:

Medicare Bad Debt is positively correlated with Medicare Inpatient Days

days

cost

1600014000120001000080006000400020000

25000000

20000000

15000000

10000000

5000000

0

Scatterplot of Medicare Cost vs Days 2003- 2006 CAH

r= 0.287 P-Value = 0.000

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Total Medicare Bad Debt is positively correlated with Medicare Cost. High bad debt and lower cost is not the usual pattern.

Medicare Cost 2003-2006

All_

Ba

dD

eb

t 20

03 -

20

06

2500000020000000150000001000000050000000

900000

800000

700000

600000

500000

400000

300000

200000

100000

0

Scatterplot of All_BadDebt vs Medicare Cost

r = 0.469

P-Value = 0.000

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Total Medicare Bad Debt is positively correlated with facility size. High bad debt and lower facility size is not the usual pattern.

r = 0.157

P-Value = 0.001

avgsqft

All_

BadD

ebt

300000250000200000150000100000500000

900000

800000

700000

600000

500000

400000

300000

200000

100000

0

Scatterplot of All_BadDebt vs avgsqft

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Rapid expansion may involve construction kickbacks

CV847260483624120

The tail of this right skewed distribution represents growing / changing facilities re: sq ft

CV = Coefficient of variation is the mean sqft over the four years divided by the stdev in square feet oveEach symbol represents up to 4 observations.

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Hospital Cost Report Data – Summary

• Can compare cost reports across provider, line by line, year by year

– FIs or MACs usually do not have this capability

– Outliers can be identified

– Significant changes from one year to the next can be observed

• Opportunity to work with Audit staff at FI or MAC– Ask about suspicious trends

– Request at least one full hard-copy cost report to verify download accuracy

• ZPICs– Will have more emphasis on cost reports

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Contact Information

Greg Dobbins, PhD

WIC Senior Scientist

410.763.6293

[email protected]

Jane Grover

WIC Investigator/Data Analyst

425.357.8874

[email protected]

Marcus Israel, PMP, MHSAWIC Operations [email protected]

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References

• http://www.cms.hhs.gov/CostReports/

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References

• http://www.costreportdata.com

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References

• http://www.resdac.umn.edu/

Documents

Advancing Healthcare Integrity 7/18/2015 5:21:16 PM 8303-08 1 Hospital Cost Report Data Data Mining for Benefit Integrity Presenters: Greg Dobbins, Jane