Expense Report Changes to Improve Accuracy of Cost-Based DRG Weights

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Updated September 2007. Expense Report Workgroup. 2. Presentation Overview. BackgroundHospital Technical Expert WorkgroupWorkgroup RecommendationsOperational ApproachQuestions and Discussion. Reexamined September 2007. Expense Report Workgroup. 3. Foundation. August 18, 2006: CMS distributes last manage for IPPS

Presentation Transcript

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Taken a toll Report Changes to Improve Accuracy of "Cost-Based" DRG Weights Cost Report Workgroup Findings September 2007

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Presentation Overview Background Hospital Technical Expert Workgroup Recommendations Operational Approach Questions and Discussion Cost Report Workgroup

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Background August 18, 2006: CMS distributes last administer for IPPS "cost-based" DRG weights Modifies past DRG weighting framework which utilized just doctor's facility charges CMS endeavors to make DRG weights to all the more precisely reflect "relative asset use" by DRG Cost Report Workgroup

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Background Three-year move: mix of charge-based and cost-based DRG weight techniques for initial two years Two information sources used to create crossover framework: MedPAR documents (healing facility particular Medicare claims) Hospital Medicare Cost Reports Major budgetary effect for some intense care clinics positive and negative Cost Report Workgroup

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Cost report lines assembled into 13 classifications and lessened to cost utilizing national cost-to-charge proportions for every class. Figured for each DRG. Routine Intensive Drugs Supplies/gear Therapy administrations Inhalation treatment Operating room Labor & conveyance Anesthesia Cardiology Laboratory Radiology Other Background Cost Report Workgroup

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Background Final Rule Inpatient Hospital Rule for Fiscal Year 2008 extended cost report line groupings into 15 classifications. Two extra groupings are "Crisis Room and Blood and Blood Products." Cost Report Workgroup

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Project Background Final Rule Inpatient Hospital Rule for Fiscal Year 2008 changed characterizations of two cost focuses EEG moved from Cardiology Category to Laboratory Category (Consistent with MedPAR Category) Radioisotope moved from Other Category to Radiology Services. Fetched Report Workgroup

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Hospital Expert Workgroup Project workgroup included master staff, advisors and clinic pioneers speaking to 3 noteworthy national healing center affiliations American Hospital Association of American Medical Colleges Federation of American Hospitals Cost Report Workgroup

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Hospital Expert Workgroup Group charge and obligation: Identify potential changes to the Medicare cost report as well as other info source archives to enhance the precision of DRG weights under the new CMS "cost-based" weight technique. Fetched Report Workgroup

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Workgroup Findings Cost-based weight system concerns: MedPAR information bunches don't coordinate cost report 13* classes for Medicare charges. Doctor's facilities gather charges and expenses in various offices and diverse lines for different reasons CMS permits clinics to report Medicare charges on cost reports three distinctive ways. The 13* CMS classification gatherings may not yield the most fitting expense to-charge proportion for each cost classification bringing about "charge pressure." *Expanded to 15 in FY 2008 Final IPPS Rule Cost Report Workgroup

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Workgroup Findings Identified procedure issues Mismatched Medicare charges, Total Charges and Costs result in cost-to-charge proportions that may misshape coming about DRG weights Medicare cost reports were not intended to bolster cost estimation at the DRG level Cost Report Workgroup

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Workgroup Recommendations All clinics ought to set up the Medicare cost report to such an extent that Medicare charges, add up to charges and general expenses are adjusted to each other to take into account consistency with the 15 classifications used in building up the DRG weights. Starting spotlight on restorative supplies class Hospitals ought to assess their current interior information abilities for finishing the cost report in a way to accomplish such consistency. Taken a toll Report Workgroup

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Workgroup Recommendations When considering changes to the Medicare cost report, clinics ought to consider different effects this may have on repayment, including: Critical get to doctor's facility costs Sole people group and Medicare subordinate doctor's facility base year costs State Medicaid arrange arrangements Other payers Cost Report Workgroup

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Workgroup Recommendations Educational materials ought to be created and dispersed by national, state, local and metropolitan healing center affiliations working in a joint effort with HFMA Augment existing Medicare cost report directions Implementing suggested cost announcing changes might be more intricate and exorbitant for a few doctor's facilities Cost Report Workgroup

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Workgroup Recommendations National doctor's facility affiliations ought to illuminate CMS of Workgroup proposals and look for CMS help to guarantee monetary go-between participation Inform and look for collaboration and help from CMS and FIs Allow for sensible evaluations to be acknowledged by FIs Seek FI collaboration in taking into consideration revealing irregularities between cost report years in support of growing better information for cost-based weights Working with CMS, address doctor's facility worries of potential consistence issues identified with changes to cost detailing strategies Cost Report Workgroup

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Operational Approach Need to address two issues: Hospitals are not reliable in the gathering of Medicare charges, add up to charges and aggregate expenses into divisions on the Medicare cost report. May bring about a bungle inside the cost-charge proportion, or May bring about a befuddle between the cost-charge proportion and Medicare charges A noteworthy number of healing centers don't sort Medicare charges, add up to charges and aggregate expenses on the cost report in an indistinguishable way from CMS orders Medicare charges in the MedPAR document Cost Report Workgroup

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Operational Approach Goals: All doctor's facilities to assess announcing of charge and cost information utilized when recording Medicare Cost Reports to guarantee that general doctor's facility costs, charges and Medicare charges are reliably classified in similar offices Uniform detailing strategies will bring about more precise and predictable information utilized for "cost-based" DRG weights Cost Report Workgroup

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Operational Approach CMS Form 339 (Medicare Cost Report Instructions) accommodates three option techniques for revealing Medicare charges Only utilizing the PS&R Using the PS&R for Department sums, then distributing in light of doctor's facility records Only utilizing clinic records Currently doctor's facilities select the strategy that best matches its data framework, yet may not precisely adjust Medicare charges on C/R Worksheet D-4, with general cost and charges investigated Worksheets An and C Cost Report Workgroup

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Operational Approach Medical supplies cost and charges speak to the most critical issue region of crisscross Other offices, for example, drugs and cardiovascular cath are likewise potential regions of concern Cost Report Workgroup

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Operational Approach Hospitals as often as possible incorporate supply charges in various auxiliary divisions Operating room, Emergency, ICU, and so forth. Supply charges are charged on the UB utilizing income code 27X Medical supply charges might be mapped on the Medicare C/R to line 55 or designated to different offices where the provisions are utilized. Taken a toll Report Workgroup

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Operational Approach If the 27X Medicare charges on the PS&R are distributed to different doctor's facility divisions on the Medicare C/R or even to line 55, and not the greater part of the aggregate charges and expenses are renamed to similar offices on Worksheets An and C, Medical Supplies will be misquoted (frequently downplayed). This twists "cost-based" weights for DRGs containing medicinal supply charges Cost Report Workgroup

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Operational Approach Hospitals are being made a request to report all independently billable therapeutic supplies on line 55 of the cost report—Medicare charges, add up to charges and expenses If the expenses can't be resolved inside the healing facility's bookkeeping framework, it ought to be done through an A-6 renaming Such a renaming may require the utilization of income office increase equations that were utilized to set up charges for each cost thing Cost Report Workgroup

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Operational Approach Charges with the 27X income code ought to be accounted for on line 55 Although most clinics can report charges by income outline code, a few doctor's facilities may need to make uncommon reports from their income administration frameworks Cost Report Workgroup

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EXAMPLE # 1 Cost Report Workgroup

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EXAMPLE # 2 Cost Report Workgroup

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EXAMPLE # 3 Cost Report Workgroup

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Conclusions Hospitals ought to look at Medicare C/R documenting techniques and embrace the approach of characterizing all independently billable restorative supply charges to line 55 of the C/R Hospitals ought to likewise delineate 27X income from the PS&R to just line 55 of the C/R Costs for billable therapeutic supplies ought to likewise be accounted for on, or renamed to line 55 in the event that they have been mapped to C/R lines other than line 55 Cost Report Workgroup

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Conclusions Adoption of the proposed approach is on an intentional premise, and is a transient push to enhance the precision and consistency of announcing for doctor's facility Medical Supply expenses and charges The proposed operational approach will all the more precisely connection Medicare cost answering to the "cost-based" DRG weight strategy utilized by CMS Continued work is as yet expected to address different parts of doctor's facility taken a toll detailing, wellsprings of information and how they are joined into the CMS "cost-based" DRG weight philosophy Cost Report Workgroup

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Conclusions Hospitals ought to set up their bookkeeping frameworks to permit their cost answer to be finished as portrayed If interior recordkeeping/bookkeeping frameworks can't be adjusted, doctor's facilities ought to plan an estimation approach for FI endorsement Cost Report Workgroup

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CMS FY 2008 Final Rule CMS is steady of deliberate exertion CMS will tell FIs/MACs of instructive exertion and give direction on the best way to demand changes from current practices Hospitals that alter their approach

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