Optimizing Reimbursement
Through the Medicare
Cost Report
Presented by:
Susan Ruchin, Senior Manager
Glenn Bunting, Director
1
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.
2
PRESENTERS
Susan 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.
MOSS ADAMS LLP | 3
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
4
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 report
o Aligning costs and charges in the prescribed CMS cost centers
o 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
5
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
6
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
7
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)
8
MARKET BASKET ADJUSTMENT (AVG WEIGHT)
Major expenditure categories used for update:
1)
2)
3)
4)
5)
6)
7)
Wages and salaries
Employee benefits
Contract labor
Pharmaceuticals
Malpractice insurance
Blood and blood products
Residual (all other)
Total
45.819
12.713
1.806
1.330
5.402
1.069
31.861
100.000
9
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)
10
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.
11
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?
12
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.
13
CMS RECEIVES SPECIAL REQUESTS
• Payment and Cost Analyses Examples:
o Simulate margins assuming the implementation of
payment policy changes
o 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
14
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.
15
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.
16
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
17
18
Volume Performance
Medicare to Become Majority of Volume by 2022
Projected Number of
Medicare Beneficiaries
Average Inpatient Case Mix
By Volume
Millions of Beneficiaries
n = 785 Hospitals
6%
2%
25%
60.7
33%
59.0
15%
57.3
19%
55.6
58%
54.0
42%
2014
2016
2018
©2014 The Advisory Board Company • advisory.com
2020
2022
2012
2022
Self-Pay
Medicaid
Commercial
Medicare
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.
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 | 19
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 | 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
$3,329.57
$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 | 21
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 Wage
o
o
o
o
Overhead Allocation Applied
Occupational Mix Adjustment
Midpoint Adjustment to Normalize the Data
Inflation Adjustment
MOSS ADAMS LLP | 22
STATE OF HAWAII FINAL AVERAGE HOURLY
WAGE FOR FFY 2015
60.00
50.00
40.00
30.00
20.00
10.00
0.00
54.66
50.55 47.48
45.07 45.07 44.66 42.60 42.17 41.75
41.25 41.05 40.82
Average Hourly Wage
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)
MOSS ADAMS LLP | 23
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 OMB
o CBSA designations can change every 10 years
o CBSAs can change through legislative means!
24
WAGE INDEX DATA USED BY CMS
• Step 4: CBSA Average Hourly Wage Compared
to National Average Hourly Wage
o If CBSA is equal to National, Wage Index Factor is
1.0000
o If CBSA is less than National, Wage Index Factor is
less than 1.000
o If CBSA is greater than National, Wage Index Factor
is greater than 1.000
25
HI WAGE INDEX FACTOR TRENDS
Federal Fiscal Year
1.25
WI Factor
1.2
1.15
1.1
1.05
1
0.95
HI URBAN
HI RURAL
MAUI COUNTY
FFY 2012
1.1428
1.1295
1.1295
FFY 2013
1.2016
1.0718
1.0718
FFY 2014
1.2164
1.0709
1.0709
FFY 2015
1.2300
1.0572
1.0737
26
WESTERN REGION WAGE INDEX FACTOR
FOR FFY 2015
2.0000
1.724
1.8000
1.6000
1.307
1.4000 1.230
1.207
1.155
1.074
1.2000
1.0000
0.8000
0.6000
0.4000
0.2000
1.057
1.288 0.998 1.086 1.307
0.0000
HIGHEST URBAN AREA
STATEWIDE RURAL
MOSS ADAMS LLP | 27
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
o
o
o
o
Salary
Paid Hours
Contract Labor and Hours
Physician Part A Compensation and Hours
Wage Related Cost - Benefits
28
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).
29
SALARY REPORTED ON WS A, COL. 1
• Source for WS A Salaries: General Ledger
• General Ledger Includes:
o Cost paid during the year
o 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
30
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
31
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 | 32
CONTRACT LABOR REPORTED ON WS S3, 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 nonsalary cost.
o Do not include costs applicable to excluded areas
reported on line 9 and 10
MOSS ADAMS LLP | 33
CONTRACT LABOR REPORTED ON WS S3, 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
o Per time study data reported on WS A-8-2
o Medical directors
34
CONTRACT LABOR REPORTED ON WS S3, PART II
• Line 14: Salary and hours associated with the
home office and/or regional office cost
statement
o 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
35
OTHER CONTRACT LABOR WS S-3, PART
II
• Line 28: A&G Under Contract
o
o
o
o
o
Contract information / data processing services
Legal fees
Tax preparation fees
Cost report preparation fees
Purchasing services
Do not include the same costs on this line and lines 11 or
12
36
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
37
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
o
o
o
o
o
o
o
o
Retirement Cost (4 types)
Plan Administrative Expense (Legal, Accounting, Admin)
Employee Health Insurance (Prescription Drug, Dental, Vision)
Life, Accident and Disability Insurance
Long Term Care Insurance
Workers Compensation
Retirement Health Insurance
Taxes (FICA, Medicare, SUI, FUI)
Other (Tuition, Day Care, Executive Deferred Comp)
38
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
o
o
o
o
o
o
o
Core (general service, routine, ancillary, outpatient)
Excluded (Rehab, Psych, SNF, NRCC)
Non-Physician Anesthetist (Part A and Part B)
Physician Part A Administrative
Physician Part A Teaching
Physician Part B
RHC / FQHC
Intern and Resident
39
WAGE RELATED COST WS S-3, PART II
• Retirement Costs Reported on a Cash Paid
Basis:
o 401K Employer Contributions
o Tax Sheltered Annuity
o 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
40
WAGE RELATED COST WS S-3, PART II
• Health Insurance
o 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 | 41
OTHER WAGE RELATED COST
WS S-3, PART II
• Qualifying Criteria
o Exception to the core list on WS S-3, Part IV
o The wage-related cost has not been furnished for the
convenience of the provider
o 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 | 42
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 | 43
DSH/UNCOMPENSATED CARE IMPACT
MOSS ADAMS LLP | 44
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 Rule
o SSI ratios based on FFY, not hospital fiscal year
o May impact uncompensated care payments shown
on following slides
MOSS ADAMS LLP | 45
UNCOMPENSATED CARE INFO
FY 2015 IPPS FINAL Rule: Implementation of Section 3133 of the Affordable Care Act - Medicare DSH - Supplemental Data
State
Alaska
Arizona
California
Colorado
Florida
Hawaii
Idaho
Montana
Nevada
New Mexico
New York
Oregon
Texas
Utah
Washington (excl Group Health)
Group Health
Total All States
Total Uncompensated Care for All
Hospitals - 10/1/2014 - 9/30/2015
Estimated Per Claim Amount
$8,321,249
150,330,961
$ 778.39
0.10%
1505.26
1.76%
1,058,279,674
2,381.14
75,279,990
1,281.80
97,209,416
5,974.11
17,759,171
1,293.88
21,442,732
1,152.79
9,812,103
652.13
57,993,655
1,282.58
45,707,445
1,299.18
937,520,318
2,095.46
67,365,102
1,168.60
732,239,185
1,705.56
38,059,158
4,342.04
129,946,883
12,071.53
897,284
448,642
$8,561,050,684
Total $ Nationwide
$1,588.61
Average per claim
% Uncompensated Care $ to Total $
12.36%
0.88%
1.14%
0.21%
0.25%
0.11%
0.68%
0.53%
10.95%
0.79%
8.55%
0.44%
1.52%
0.01%
MOSS ADAMS
LLP | 46
100.00%
MEDICAID ENROLLMENT AS A PERCENT OF
TOTAL POPULATION & RECENT CHANGES
KAISER FAMILY FOUNDATION
Ranking
State
Medicaid
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 | 47
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
payments
o Calculated retroactively upon final settlement
MOSS ADAMS LLP | 48
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
MOSS ADAMS LLP | 49
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.
50
MEDICARE BAD DEBT
Allowable Bad Debt Percentage for Cost Report Period Began
10/1/2012
Periods 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%
Provider Type
MOSS ADAMS LLP | 51
MEDICARE BAD DEBT
• Two Categories of Bad Debt: Indigent and NonIndigent (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
52
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
53
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
54
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
55
PROTESTED AMOUNTS
• What is a Protested Amount List and Why is it
Important?
o In simplistic terms it’s a list of disputed issues
o 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 | 56
PROTESTED AMOUNTS
• Key Elements of a Compliant Protested Amount List
o Must fully describe your issue in dispute
o 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 | 57
PROTESTED AMOUNTS
• Example of an Inadequate Protested Amount:
o
o
o
o
o
o
DSH
DSH SSI
DSH Eligible Days
FTEs
HIT Payment
Uncompensated Care Payment
• Consequence:
o Jurisdictional Challenge
MOSS ADAMS LLP | 58
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 | 59
PROTESTED AMOUNTS
Protested Amounts to be Considered:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Accuracy of SSI Ratio
SSI Ratio Realignment
SSI Ratio Compliance with Section 951 of 2003 MMA
CMS Ruling 1498R Non-Covered Part A Days in SSI Ratio
CMS Ruling 1498R Non-Covered Part C Days in SSI Ratio
Exclusion of DSH Non-Covered Dual Eligible Part A Days
Exclusion of DSH Non-Covered Dual Eligible Part C Days
Additional Medicaid Eligible Days
DSH Uncompensated Care Payments
MOSS ADAMS LLP | 60
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):
10.
11.
12.
13.
14.
15.
16.
17.
18.
Understated HIT Payment due to Medicare Part C Days
Understated HIT Payment due to Charity Care Charges
2 Midnight Rule 0.2 Payment Reduction
Understated Nursing and Allied Health Payments
Understated Medicare Bad Debt – Documentation Pending
Understated Medicare Bad Debt – Share of Cost Claims
Understated Medicare Bad Debt due to Write-Off Date
Understated Medicare Settlement Data – Omitted Claims
Understated Medicare Settlement Data – Incorrect Calc.
MOSS ADAMS LLP | 61
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):
19.
20.
21.
22.
23.
24.
25.
26.
27.
Omission of Low Volume Adjustment Add-On Payment
LVA – Inclusion of Medicare Part C Discharges
SCH – Errors in CMS 2007 Adjustment Factor
SCH – Denial of Uncompensated Care Pool Payment
I&R FTEs – Additional FTEs Not Claimed
Understated GME / IME–Exclusion of Medicare Part C Days
Understated GME / IME – Unaccredited Training Program
Understated GME / IME – Time Spent in Elective Rotations
Understated GME / IME – Initial Residency Programs
MOSS ADAMS LLP | 62
PROTESTED AMOUNTS
Protested Amounts to be Considered (cont.):
28.
29.
30.
31.
32.
33.
34.
Understated GME / IME – FTE Cap & Affiliation Agreement
Understated GME / IME – Prior Yr./Penultimate Yr. FTEs
Understated IME – Prior Year Available Bed Count
Understated IME – Licensed Bed v Available Bed Count
Understated GME / IME – IRIS Program Software Errors
Understated GME / IME – Understated Medicare Set Data
Prior Year Audit Adjustments Incorporated in CY Cost
Report
MOSS ADAMS LLP | 63
BEST PRACTICES
• Report Preparation
o 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 possible
o DILLY/SALY no longer are acceptable
o Incorporating prior MAC adjustments
64
BEST PRACTICES
• Reimbursement Optimization
o Keeping up with regulations
o Flexibility of mindsets and cost/benefit
considerations
• Department communication
o Accounting and business office staff need to work in
unison on cost report items
65
EXTRACTING USEFUL/OPTIMAL DATA
•
•
•
•
Revenue Usage Reports
Job Costing Detail (Labor Distribution Reports)
Time-Study Logs
Using PS&R for internal use
66
Questions?
Thank you!
Susan Ruchin
(480) 366-8369
Susan.ruchin@mossadams.com
Glenn Bunting
(916) 503-8195
Glenn.bunting@mossadams.com
67