Transcript HSCRC Rate System
HSCRC Rate System
Arin Foreman
Senior Associate - KPMG LLP [email protected]
Jennifer Hulvey
Director of Reimbursement - Frederick Memorial Hospital [email protected]
January 31, 2014
Discussion Topics
• Overview – Revenue Methodologies • Rate Order • Annual Rate Order Adjustments • Unit Rate Compliance • Total Revenue Compliance • Reasonableness of Charges • Required Reporting • Terminology and Acronyms
Overview
• HSCRC has developed methodologies to constrain healthcare costs in Maryland. • Hospitals currently elect one of the following: – Total Patient Revenue (TPR) System, – Charge per Case (CPC) System, or – Charge per Episode / Admission-Readmission Revenue (CPE / ARR)
Total Patient Revenue (TPR)
• Inpatient and outpatient revenue is constrained by the TPR System • Implemented July 1, 2010 (Garrett County Memorial Hospital and Edward W. McCready Memorial Hospital transitioned to TPR prior to 07/01/10) • Approved revenue amount in a given year is a fixed cap • No adjustment for changes in volume • No adjustment for changes in Case Mix Index (CMI) • Available to sole community provider hospitals and hospitals operating in regions of the State that don’t share service areas with other hospitals
Charge per Case (CPC)
• Inpatient Revenue is constrained by the Charge per Case system (CPC) • Fixed amount of revenue per inpatient case • Implemented July 1, 2005 • Each hospital's allowed CPC is based on their Case Mix Index (CMI) • CMI measures the complexity of a hospital's cases
Charge per Episode (CPE)
• Admission-Readmission Revenue arrangement (ARR): – Fixed amount of revenue per inpatient episode – Under ARR, hospitals assume the risks and rewards of managing hospital readmissions. – No revenue increase for additional readmissions (penalty) – No revenue decrease for reduced readmissions (reward) • Implemented July 1, 2011 • Voluntary 3-year revenue constraint program replacing CPC • Excludes intra-hospital readmissions within 30 days • All cause readmissions • Each hospital's allowed CPE is based on Case Mix Index (CMI)
Which rate methodology is your hospital under?
TPR Calvert Memorial Hospital Carroll Hospital Center Chester River Hospital Center Dorchester General Hospital Edward W. McCready Hospital Garrett County Memorial Hospital Memorial Hospital at Easton Meritus Medical Center Union Hospital of Cecil County Western MD Regional Medical Center CPC Atlantic General Hospital Fort Washington Medical Center Laurel Regional Hospital Prince Georges Hospital Center Southern Maryland Hospital Center CPE / ARR Anne Arundel Medical Center Baltimore Washington Medical Center Bon Secours Hospital Civista Medical Center Doctors Community Hospital Franklin Square Hospital Center Frederick Memorial Hospital Good Samaritan Hospital Greater Baltimore Medical Center Harbor Hospital Center Harford Memorial Hospital Holy Cross Hospital Howard County General Hospital Johns Hopkins Bayview Medical Center Johns Hopkins Hospital Kernan Hospital Maryland General Hospital Mercy Medical Center Montgomery General Hospital Northwest Hospital Center Peninsula Regional Medical Center Shady Grove Adventist Hospital Sinai Hospital St. Agnes Hospital St. Joseph Medical Center St. Mary's Hospital Suburban Hospital Union Memorial Hospital University of Maryland Medical Center Upper Chesapeake Medical Center Washington Adventist Hospital
RATE ORDER HEALTH SERVICES COST REVIEW COMMISSION
NEW APPROVED CHARGE PER EPISODE TARGETS AND RATES for
Frederick Memorial Hospital
Effective: July 1, 2013 FINAL Charge per Episode (CPE) Target & Casemix Indexes Permanent CPE - $10,543 Compliance CPE - Base CPE Casemix Index - $10,607 1.011528
Revenue Center Med./Surg. Acute Pediatrics Admissions Emergency Services Clinic Services Psychiatric Day/Night Operating Room Same Day Surgery Labor and Delivery Laboratory Nuclear Medicine Renal Dialysis Leukapheresis TUMT MRI Scanner Hyperbaric Chamber (R) (R) = Rebundled Service CHARGES for MEDICAL SUPPLIES and DRUGS SOLD Service Unit Unit Rates Budgeted Volume Budgeted Annual Revenue Patient Days Patient Days Admission MD RVU'S RVU'S Visits Minutes Per Patient RVU'S MD RVU'S HSCRC RVU'S Treatments JHH RVU'S Procedure RVU'S Hrs of Treatment $ 854.1740
$ 1,033.6924
$ 151.7719
$ 37.6217
$ 22.2031
$ 252.9133
$ 25.2681
$ 632.1710
$ 107.7558
$ 1.8902
$ 23.7300
$ 777.9715
$ 1,640.1178
$ 6,855.5597
$ 103.9810
$ 316.6025
60,972 805 18,967 636,025 333,241 2,417 1,065,699 8,641 87,994 15,824,464 75,401 1,184 1 1 87,038 1,607 $ 52,080,697 832,122 2,878,658 23,928,342 7,398,983 611,291 26,928,189 5,462,590 9,481,864 29,911,402 1,789,266 921,118 1,640 6,856 9,050,298 508,780 TOTAL $ 255,255,646 Med./Surg. Supplies Drugs Invoice Cost plus Invoice Cost plus Mark up 1.1206 , plus Overhead.
1.1206 , plus Overhead.
Maximum Annual Overhead $ 12,025,772 $ 14,813,263
Rate Order
• Revenue Center: Hospitals have different revenue centers depending on the services they provide
Revenue Center
• Service Unit: The service unit is the same for all hospitals (i.e. every hospital charges for Operating Room services by the minute) Med./Surg. Acute New Born Nursery Admissions Psychiatric Day/Night Operating Room Radiology-Diagnostic Renal Dialysis • Unit Rates: Unit rates (prices) vary by hospital – These rates must be charged to all payers - no contract negotiations
Service Unit
Patient Days Patient Days Admission Visits Minutes RVU'S Treatments
Unit Rates
$ 854.1740
$ 518.2096
$ 151.7719
$ 252.9133
$ 25.2681
$ 26.4154
$ 777.9715
RVUs
• RVUs relate to the complexity (time and cost) of tests and procedures • The service units for RVU's (relative value units) are defined by the HSCRC in Appendix D • For example, a chest x-ray, single view, has the same RVU at all MD hospitals
CPT CODE
71010 71015 71023 71030
APPENDIX D STANDARD UNIT OF MEASURE REFERENCES DIAGNOSTIC RADIOLOGY DESCRIPTION
Chest, single view, posteroanterior Stereo, frontal With fluoroscopy Chest, complete, minimum of 4 views
RVU's
2 3 6 5
The patient charge becomes a calculation…
Revenue Center
Med./Surg. Acute New Born Nursery Admissions Psychiatric Day/Night Operating Room Radiology-Diagnostic Renal Dialysis
Service Unit
Patient Days Patient Days Admission Visits Minutes RVU'S Treatments
Unit Rates
$ 854.1740
$ 518.2096
$ 151.7719
$ 252.9133
$ 25.2681
$ 26.4154
$ 777.9715
2 RVU's x $26.4154 = $52.83
CPT CODE
71010 71015 71023 71030
DESCRIPTION
Chest, single view, posteroanterior Stereo, frontal With fluoroscopy Chest, complete, minimum of 4 views
RVU's
2 3 6 5
Updates to Rate Orders
• Hospitals receive an updated rate order once per year effective July 1st • Unit rates are updated for:
Inflation (update factor) Rate realignment Change in approved mark-up (UCC) Volume adjustment Other one time adjustments (quality, assessments) Compliance Population Change in case mix (CMI) CPC/CPE x x x x x x TPR x x x x x x x
History of Update Factors
• The following chart displays the previous five years’ update/inflation factors that have been applied to hospitals’ rates: Inpatient Outpatient
FY 2014
1.65% 1.65%
FY 2013
-1.00% 2.59%
FY 2012
2.20% 3.05%
FY 2011
1.68% 2.53%
FY 2010
1.77% 1.27%
Rate Realignment
• Charges are related to the underlying cost of providing the service • This does not change a hospital's total revenue; it just reallocates it among revenue centers • Costs for FY 2012 were used to realign FY 2014 rates
1.
2.
3.
4.
5.
6.
7 8
Rate Realignment
Base Period CPC Compliance Target Reversal of Previous One-Time Adjustments
CPC Retros
Net Current Base Period Cases & Revenue (1) Change in Casemix Index
Base period Casemix Index (CMI) Permanent Period CMI Total Casemix Change Other Net Casemix Change Net Allowable Casemix Revenue FYE 0.861135
0.846192
-1.735% 0.000% -1.735% Jun-11
Trims and Exclusions FYE
Other Other
Jun-11
Other
Adjusted Permanent CPC Target & Revenue Other Permanent CPC Target & Revenue Adjustments
Other Permanent
Permanent CPC Revenue to be Rate Realigned
Cases 14,957 X CPC Target 10,000 = 15,299 15,299 X -293 9,707 9,539 = Approved Revenue 149,573,461 -4,386,253 148,506,993 145,929,989 0 0 0 145,929,989 0
145,929,989
Rate Realignment
Using the M schedule from the most recent Annual Filing, the Revenue calculated in the previous step is realigned based on the Volume adjusted cost in each center. For example, if MSG has 15% of the costs, then 15% of the revenue will be allocated to that center.
MSG PED PSY OBS DEF MIS NUR EMG CL ADM SDS DEL OR ANS LAB EKG RAD CAT RAT NUC RES Med./Surg. Acute Pediatrics Psychiatric Acute Obstetric Acute Definitive Observation Med./Surg. I.C.U.
New Born Nursery Emergency Services Clinic Services Admissions Same Day Surgery Labor and Delivery Operating Room Anesthesiology Laboratory Electrocardiography Radiology-Diagnostic CT Scanner Radiology-Therapeutic Nuclear Medicine Respiratory Therapy Units per Schedule M Revenue per Schedule M 44,794 1,236 4,830 4,850 7,173 5,744 5,373 673,807 242,609 16,270 9,704 63,147 1,112,319 777,116 10,704,414 422,366 281,506 641,186 7,420 85,424 2,984,919 31,840 1,094 3,224 3,570 6,689 9,156 3,396 17,037 4,807 1,472 2,371 2,806 17,482 1,880 16,894 1,063 6,603 2,708 260 1,778 4,248 Actual Inpatient Units 44,882 1,403 4,297 4,723 6,841 5,598 5,107 164,586 74 16,482 0 53,033 476,188 431,124 7,387,753 246,449 135,456 274,526 5,286 24,513 2,601,939 Actual Outpatient Units Actual Total Units 0 0 0 524,236 0 0 0 0 252,246 0 9,810 10,576 824,950 347,512 3,616,255 202,721 158,983 386,008 1,160 56,364 325,142 44,882 1,403 4,297 4,723 6,841 5,598 5,107 688,822 252,320 16,482 9,810 63,609 1,301,138 778,636 11,004,008 449,170 294,439 660,534 6,446 80,877 2,927,081 Variable Cost 1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
% Change In Units Volume Adjusted Revenue Excluded Schedule M From Revenue Rate Realignment 0.2% 13.5% -11.0% -2.6% -4.6% -2.5% -5.0% 2.2% 4.0% 1.3% 1.1% 0.7% 17.0% 0.2% 2.8% 6.3% 4.6% 3.0% -13.1% -5.3% -1.9% 31,902 1,242 2,868 3,476 6,379 8,923 3,228 17,417 4,999 1,491 2,397 2,827 20,449 1,884 17,367 1,131 6,906 0 226 1,684 4,165 3,594,307 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Prorated Current Revenue 36,959,127 1,438,919 3,322,357 4,027,360 7,390,611 10,337,830 3,739,641 20,177,627 5,791,635 1,727,784 2,777,070 3,274,917 23,690,437 2,182,610 20,120,028 1,310,143 8,000,851 3,594,307 261,271 1,950,521 4,825,656
UCC
• Uncompensated Care includes charity care and bad debt • The UCC policy allows hospitals to charge additional amounts in their rates to all payors to cover the shortfall produced by providing uncompensated care • Blend of: – Three-year average – Predicted UCC
UCC
• Three-year average is based on the Hospital’s 3 most recent year’s Annual Filings • Predicted UCC uses a linear regression model – Independent variable (x): Actual Uncompensated Care – Dependent variables (y): • Inpatient Medicaid, Self Pay, and Charity Charges as a % of Total Charges • Inpatient Charges from non-Medicare Admissions through the ER as a % of Total Charges • Outpatient Medicaid, Self Pay, and Charity Charges from the ER as a % of Total Charges • Outpatient Charges from non-Medicare ER Visits as a % of Total Charges
UCC
• UCC Pool – since Statewide UCC % is built into all hospitals’ rates, the UCC Pool acts as a settlement methodology to account for hospitals that experience more or less UCC than the State Hospital A Hospital B Hospital C
UCC Policy Result
15.00% 7.47% 3.50%
Statew ide UCC %
7.47% 7.47% 7.47%
UCC Above / (Below ) Average
7.53% 0.00% -3.97%
Volume Adjustment
• Rates are adjusted for volume increases and decreases • FY 2014 rates adjusted for volume changes occurring in FY 2013 • Variable Cost Factor = 85% / Fixed = 15% – Volume increases - 15% of volume increase taken out of rates – Volume decreases - 15% is put into rates • Changes Effective Jan 1, 2014 – Adjustment will be made on a concurrent basis (during the year in which the volume change occurs) – Variable Cost Factor = 50% / Fixed = 50%
Volume Adjustment
Base Year: Rate Year: Change Allowable (x 85%) Volume Adj Inpatient 16,529 Other 15,109 Clinic 706 Total Volumes 32,345 16,281 14,855 706 31,843 248 211 254 216 0 0 502 427 -0.23%
Assessments
• Two assessments
pass through
hospitals in order to support “medically uninsurable” patients and Medicaid expansion – MHIP (Maryland Health Insurance Plan) – Health Care Coverage Fund • Medicaid Budget Deficit Assessment – State total spread to hospitals based on % of total revenue – Payer portion put into rates (all-payers) 86% – Hospital portion paid by hospital throughout year 14% • NSP I (Nursing Support Program) – grant funding – Applied directly to admissions center
Application of Assessments
This revenue produces the Rate Order Rates to be used in Unit Rate Compliance Center MSG MIS ADM EMG OR ANS SDS LAB EKG EEG RAD RAT NUC CAT IRC RES Revenue after application of Current Year Price Variances and Penalties Applied based on % of Revenue in that center NSP I is applied directly to the Admissions Center Revenue After Rate Realignment $55,482,772 14,115,942 1,285,404 21,129,159 20,814,461 839,189 3,572,228 15,617,999 1,793,363 4,754,200 9,528,006 479,995 1,105,079 2,516,377 1,595,443 2,463,807 Allocation % 0.2654
0.0675
0.0061
0.1011
0.0996
0.0040
0.0171
0.0747
0.0086
0.0227
0.0456
0.0023
0.0053
0.0120
0.0076
0.0118
MHIP Adjustment $1,905,069 Final $505,662 128,651 11,715 192,568 189,700 7,648 32,557 142,340 16,344 43,329 86,837 4,375 10,072 22,934 14,541 22,455
Allocated Center Adjustments
Health Care Coverage Fund $2,742,381 Defict Assessment $5,797,825 $727,909 185,195 16,864 277,205 273,076 $1,538,914 391,531 35,653 586,055 577,326 Total Allocated Adjustment = $10,445,275 2,772,485 705,376 64,232 1,055,828 1,040,103 11,010 46,866 204,901 23,528 62,373 125,003 6,297 14,498 33,014 20,932 32,324 23,276 99,082 433,193 49,742 131,866 264,276 13,314 30,651 69,796 44,252 68,338 41,934 178,505 780,434 89,615 237,568 476,116 23,985 55,221 125,744 79,725 123,117 NSP I Adjustment 218,580 Revenue After All Adjustments $58,255,257 14,821,318 1,568,216 22,184,987 21,854,564 881,124 3,750,733 16,398,433 1,882,977 4,991,768 10,004,122 503,980 1,160,300 2,642,121 1,675,168 2,586,923 Volume MSG MIS ADM EMG OR ANS SDS LAB EKG EEG RAD RAT NUC CAT IRC RES 50,436 6,400 13,147 618,489 899,322 765,657 7,205 10,041,667 686,384 405,224 311,206 17,019 79,507 549,763 54,954 1,619,264 New Approved Revenue 58,255,257 14,821,318 1,568,216 22,184,987 21,854,564 881,124 3,750,733 16,398,433 1,882,977 4,991,768 10,004,122 503,980 1,160,300 2,642,121 1,675,168 2,586,923 Rate 1,155.0333
2,315.8310
119.2831
35.8697
24.3012
1.1508
520.5736
1.6330
2.7433
12.3185
32.1463
29.6128
14.5937
4.8059
30.4831
1.5976
Retroactive Adjustments
Amount of
• • • • • •
Quality Based Reimbursement
Implemented
– July 2008
What’s Measured
– Clinical/Process HCAPS Outcome Measurement Period CY13 - going into FY15 rates 40% 50% 10% Measurement Period CY14 - going into FY16 rates 30% 40% 30%
Source of Data
– CMS QIO Clinical Warehouse
Measurement Period
- Calendar Year – For example, results from CY 2013 will impact FY 2015 rates
% of Revenue at Risk:
0.5% (increasing to 1.0% in FY 2016 rates)
Other
- Revenue Neutral some hospitals "win" and some "lose“ – net result to the state is $0
HOSPITAL NAME B
Southern Maryland Hospital Center Greater Baltimore Medical Center Prince Georges Hospital Center Sinai Hospital Atlantic General Hospital Northwest Hospital Center Peninsula Regional Medical Center Frederick Memorial Hospital Fort Washington Medical Center Suburban Hospital Calvert Memorial Hospital Bon Secours Hospital Harbor Hospital Center Chester River Hospital Center Union Memorial Hospital Meritus Hospital Laurel Regional Hospital Howard County General Hospital Franklin Square Hospital Center Washington Adventist Hospital St. Agnes Hospital Johns Hopkins Bayview Medical Center Shady Grove Adventist Hospital Good Samaritan Hospital Western Maryland Regional Medical Center Garrett County Memorial Hospital Montgomery General Hospital Civista Medical Center Carroll Hospital Center Union of Cecil Harford Memorial Hospital Holy Cross Hospital St. Joseph Medical Center Doctors Community Hospital Johns Hopkins Hospital University of Maryland Hospital Upper Chesapeake Medical Center Anne Arundel Medical Center Mercy Medical Center Memorial Hospital at Easton Dorchester General Hospital Baltimore Washington Medical Center Maryland General Hospital St. Mary's Hospital McCready Memorial Hospital Statewide Total
GROSS INPATIENT CPC/CPE REVENUE C
$146,082,502 $208,875,651 $175,673,564 $365,095,082 $35,569,941 $125,688,476 $235,561,632 $179,085,665 $20,591,728 $146,894,874 $57,014,942 $72,763,474 $120,286,962 $34,409,502 $223,141,625 $170,280,942 $55,032,232 $148,552,102 $244,662,796 $172,399,246 $223,703,417 $254,179,825 $205,252,257 $185,067,078 $162,173,440 $18,335,488 $86,987,493 $65,004,737 $133,858,715 $64,046,952 $46,419,174 $284,622,588 $200,080,034 $121,919,094 $844,917,135 $787,107,460 $117,444,944 $241,861,191 $188,060,788 $117,317,772 $37,355,818 $188,870,979 $119,697,303 $54,639,193 $5,196,783 $7,691,782,590
QBR FINAL SCORE D
0.4096
0.4099
0.4106
0.4338
0.4638
0.4873
0.5015
0.5338
0.5356
0.5494
0.5519
0.5848
0.5857
0.5951
0.6085
0.6102
0.6105
0.6168
0.6174
0.6174
0.6182
0.6294
0.6414
0.668
0.6787
0.6791
0.6795
0.7013
0.7114
0.7316
0.7368
0.7396
0.7441
0.7485
0.7501
0.7597
0.7786
0.7822
0.7911
0.7958
0.8005
0.83
0.8301
0.905
0.923
REVENUE NEUTRAL ADJUSTED PERCENT E
-0.50% -0.50% -0.50% -0.45% -0.39% -0.34% -0.31% -0.24% -0.24% -0.21% -0.21% -0.14% -0.14% -0.12% -0.09% -0.09% -0.09% -0.07% -0.07% -0.07% -0.07% -0.05% -0.02% 0.03% 0.05% 0.05% 0.05% 0.09% 0.11% 0.15% 0.16% 0.17% 0.18% 0.18% 0.19% 0.21% 0.24% 0.25% 0.27% 0.27% 0.28% 0.34% 0.34% 0.49% 0.52% 0.00%
REVENUE NEUTRAL ADJUSTED REVENUE IMPACT OF SCALING F
-$730,413 -$1,043,091 -$874,760 -$1,644,016 -$138,255 -$427,868 -$733,199 -$438,613 -$49,672 -$312,708 -$118,445 -$101,996 -$166,388 -$40,954 -$204,173 -$149,860 -$48,093 -$110,601 -$179,143 -$126,231 -$160,121 -$123,467 -$49,115 $53,270 $80,092 $9,197 $44,300 $60,392 $150,391 $96,868 $74,855 $474,323 $350,770 $224,071 $1,578,877 $1,616,344 $283,917 $601,451 $499,890 $322,463 $106,058 $643,512 $408,057 $265,070 $27,012 $0
• • • • • •
Maryland Hospital Acquired Conditions (MHAC)
Implemented
– July 2009
What’s Measured
- Potentially preventable complications (PPC's) – Diagnosis present on admission? If no, penalized
Source of Data
- Quarterly discharge data submitted by hospitals
Measurement Period
- Calendar year – For example, results from CY 2013 will impact FY 2015 rates
% of Revenue at Risk:
2.0% for attainment, 1.0% for improvement
Other
- Revenue Neutral some hospitals "win" and some "lose“ – net result to the state is $0
HOSPITAL NAME B
Greater Baltimore Medical Center Johns Hopkins Hospital Union of Cecil Harbor Hospital Center Suburban Hospital St. Joseph Medical Center Chester River Hospital Center Southern Maryland Hospital Center University of Maryland Hospital Sinai Hospital Montgomery General Hospital Garrett County Memorial Hospital Johns Hopkins Bayview Medical Center Calvert Memorial Hospital Frederick Memorial Hospital Meritus Hospital St. Agnes Hospital Peninsula Regional Medical Center Prince Georges Hospital Center Union Memorial Hospital Bon Secours Hospital Good Samaritan Hospital Howard County General Hospital Upper Chesapeake Medical Center Holy Cross Hospital Anne Arundel Medical Center Doctors Community Hospital Baltimore Washington Medical Center Western MD Regional Medical Center Mercy Medical Center Carroll Hospital Center Northwest Hospital Center Harford Memorial Hospital McCready Memorial Hospital James Lawrence Kernan Hospital St. Mary's Hospital Civista Medical Center Franklin Square Hospital Center Memorial Hospital at Easton Shady Grove Adventist Hospital Maryland General Hospital Fort Washington Medical Center Washington Adventist Hospital Laurel Regional Hospital Dorchester General Hospital Atlantic General Hospital Statewide Total
GROSS INPATIENT CPC/CPE REVENUE C
$184,989,402 $843,010,098 $60,653,880 $116,221,680 $151,177,296 $180,611,979 $26,318,692 $145,134,232 $783,335,558 $362,977,920 $79,741,456 $17,951,439 $248,923,504 $57,493,422 $170,650,516 $165,746,592 $209,768,089 $219,461,838 $163,205,248 $215,726,275 $70,685,898 $172,932,011 $146,791,098 $115,418,544 $276,326,064 $250,956,754 $119,486,136 $184,662,660 $159,433,379 $191,948,526 $118,189,180 $121,348,486 $42,495,040 $4,512,494 $45,850,528 $53,846,970 $60,770,370 $241,738,193 $82,689,144 $195,270,023 $105,819,110 $16,249,592 $155,015,406 $53,359,459 $28,755,684 $33,780,340 $7,451,430,205
% OF AT RISK REVENUE FROM EXCESS COMPLICATIONS D
0.57% 0.19% -0.11% -0.28% -0.29% -0.30% -0.56% -0.58% -0.74% -0.81% -0.88% -0.95% -0.99% -1.00% -1.21% -1.24% -1.25% -1.27% -1.27% -1.32% -1.43% -1.44% -1.47% -1.50% -1.52% -1.52% -1.57% -1.74% -1.79% -1.81% -1.94% -2.03% -2.04% -2.04% -2.18% -2.29% -2.32% -2.34% -2.38% -2.38% -2.45% -2.64% -2.71% -3.52% -4.61% -4.81%
MHAC RANK E
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
REVENUE NEUTRAL CONTINUOUS SCALING ADJUSTMENT F
-2.000% -0.667% 0.011% 0.030% 0.030% 0.031% 0.058% 0.061% 0.077% 0.084% 0.091% 0.099% 0.102% 0.104% 0.126% 0.128% 0.226% 0.237% 0.240% 0.243% 0.246% 0.247% 0.254% 0.274% 0.281% 0.365% 0.478% 0.499% 0.000% Total rewards 0.129% 0.131% 0.131% 0.137% 0.148% 0.150% 0.152% 0.155% 0.157% 0.158% 0.162% 0.180% 0.186% 0.188% 0.201% 0.211% 0.211% 0.211%
MHAC SCALED REVENUE G
-$3,699,788 -$5,624,996 $6,711 $34,321 $44,801 $56,707 $15,345 $87,916 $600,328 $305,313 $72,878 $17,763 $254,934 $59,675 $214,461 $212,423 $270,799 $287,864 $214,412 $295,490 $104,957 $258,929 $223,289 $179,397 $434,082 $396,311 $194,144 $332,979 $296,248 $361,044 $237,380 $255,679 $89,713 $9,531 $103,643 $127,748 $145,938 $586,291 $203,634 $481,892 $269,043 $44,482 $435,272 $194,922 $137,545 $168,549 $0 $9,324,784
Population Adjustment
• Relevant for TPR hospitals only • HSCRC calculates population growth for each hospital’s primary and secondary service area by age cohort • An adjustment is made to the TPR Cap in order to account for the increase or decrease in the population
Case Mix Index (CMI)
•
A
ll
P
atient
R
efined
D
iagnostic
R
elated
G
rouper • Each APR-DRG has a level of severity from 1 – 4 which is assigned based on in depth coding information such as age, weight, other pre-existing conditions, etc.
• 3-Level Case Mix Calculation • Level I (CPC Included) – Hospital-specific change in CMI • Level II (Trim) and III (Exclusions) – – Revenue pass-through for exclusions and trim revenue Statewide CMI change based on Level III
Case Mix Index (CMI)
• Calculation of Relative Weights – Establish Statewide Average Charge per Case (with remaining data set) – For each Cell (DRG by Severity)
Example: Calculation of Relative Weight and CMI
State Average State Average DRG 002 Severity 3 Total State Average Relative Weight $10,000 $5,000 2.0000
DRG 390 Severity 2 Total State Average $3,000 $5,000 0.6000
Case Mix Index (CMI)
Based on Mix of Services Provided (Case Mix Index) Example: DRG Description
Normal Delivery Chest Pain Heart Failure Pneumonia Hysterectomy Hip Replacement Stroke Splenectomy
Index Weight x Cases =
0.4020
0.5342
1.0144
0.7800
0.8699
2.2500
1.1914
3.1411
Subtotal / Total Cases 730 490 385 385 240 273 150 3 2,656
Average CMI Total Index
293 262 391 300 209 614 179 9 2,257 2,656
0.850
Unit Rate Compliance
Revenue Center
Med./Surg. Acute New Born Nursery Admissions Psychiatric Day/Night Operating Room Radiology-Diagnostic Renal Dialysis
Col. 1 Gross Revenues Col. 2 Units of Measure Col. 3 Actual Rate Charged (Col 1/Col 2) Col. 4 HSCRC Approved Rate Col. 5 Charge Variance (Col 3-Col 4) x Col 2 Col. 6 Variance Percentage (Col 3-Col 4) / Col 4
$ 4,000,000 120,000 200,000 70,000 2,500,000 850,000 150,000 4,630 229 1,300 285 90,000 33,000 220 $ 863.9309
524.0175
153.8462
245.6140
27.7778
25.7576
681.8182
$ 854.1740
518.2096
151.7719
252.9133
25.2681
26.4154
777.9715
$ 45,174 1,330 2,697 (2,080) 225,871 (21,708) (21,154) 1.1% 1.1% 1.4% -2.9% 9.9% -2.5% -12.4% Hospitals must be in compliance with approved unit rates on a monthly (except TPR) and YTD (7/1 - 6/30) basis
Unit Rate Compliance
• Although rate orders are effective July 1, hospitals usually receive them in Oct/Nov • Still need to be in compliance by June 30 th • Approved rate (per rate order) = $15.00
• Actual average charge for July-Dec = $10.00
• Average charge for Jan-June must = $20.00 to be in compliance by June 30
Supply and Drug Compliance
MSS (Supplies) CDS (Drugs)
I J A B C D E F G H Invoice Cost Markup Amount - per rate order Invoice Cost with Markup Actual Revenue Overhead Collected Approved Overhead - per rate order Months of Rate Year Approved Overhead for Period Overhead Variance
% Variance
A x B D - C F x G / 12 E - H I / H $ 2,400,000 1.1206
2,689,440 3,800,000 1,110,560 12,025,772 1 1,002,148 108,412
10.82%
$ 1,700,000 1.1206
1,905,020 3,100,000 1,194,980 14,813,263 1 1,234,439 (39,459)
-3.20%
Revenue Center All Inpatient Room & Board Admissions Emergency Services Clinic Services Psychiatric Day/Night Operating Room Operating Room - Clinic Anesthesiology Same Day Surgery Labor and Delivery Laboratory Electrocardiography Electroencephalography Radiology - Diagnostic Radiology - Therapeutic Nuclear Medicine
CPE/CPC Price Corridors
Monthly Upper Lower 10% 10% 10% 10% 4% 4% 4% 4% 4% 10% 6% 6% 6% 4% 6% 6% 6% 6% 6% 6% 6% 10% 10% 10% 10% 10% 10% 10% 4% 10% 10% 10% Year End Upper Lower 10% 10% 10% 10% 2% 2% 2% 2% 2% 5% 3% 3% 3% 2% 3% 3% 3% 3% 3% 3% 3% 5% 5% 5% 5% 5% 5% 5% 2% 5% 5% 5% Revenue Center CT Scanner Interventional Cardiology Respiratory Therapy Pulmonary Physical Therapy Occupational Therapy Speech Therapy Renal Dialysis Audiology MRI Scanner Lithotripsy Ambulance Hyperbaric Chamber Observation Med/Surg Supplies Drugs Monthly Upper Lower 6% 6% 10% 10% 6% 6% 6% 10% 10% 10% 6% 6% 10% 6% 6% 6% 6% 6% 4% 30% 30% 4% 30% 30% 10% 10% 10% 10% 10% 10% 10% 10% Year End Upper Lower 3% 3% 5% 5% 3% 3% 3% 5% 5% 5% 3% 3% 5% 3% 3% 3% 3% 3% 2% 30% 30% 2% 30% 30% 5% 5% 5% 5% 5% 5% 5% 5% Overcharges/undercharges that are within the allowed corridors go into next years rates (one time adjustment)
TPR Price Corridors
• TPR unit rate compliance corridors are more relaxed • Hospitals are free to charge at levels up to 5% above / (below) the approved individual unit rates without penalty • This limit can be extended to 10% at the discretion of the Commission Staff
Penalties for Exceeding the Corridors • Penalties will be applied if rates exceed
monthly
corridors for consecutive periods (
TPR excluded
): – 6 consecutive months for Supplies (MSS) and Drugs (CDS) – 3 consecutive months for all other centers – Penalties are calculated at 20% of the sum (absolute value) of all charges in excess of the corridors – Penalties are subtracted from next years rates
Penalties for Exceeding the Corridors Cont.
• Penalties will be applied if rates exceed
year-end
corridors – Penalties are calculated at 40% of the sum (absolute value) of all charges in excess of the corridors – Penalties are subtracted from next years rates
• • •
CPC and CPE Trim Exclusions
Trim
– High charge cases
Exclusions
– Zero and one day stay cases – Hospice Cases – Cases denied for medical necessity (when 100% of room and board charges denied) – Transplants (organ & bone) – Other Special Cases • Burn at Bayview • Chronic at Kernan • Shock Trauma • Special Oncology
Readmissions
Charge per Case (CPC) Compliance
Actual Revenue and Cases - YTD Less: Exclusions Less: Trim Less: Assessments Included CPC Revenue and Cases Actual CPC $ (A) Inpatient Revenue 200,000,000 (B) Inpatient Cases 21,000 (C) Actual CPC (A/B) (D) Actual CMI (E) HSCRC CMI - per rate order 15,000,000 2,750 1,900,000 (F) Increase (Decrease) in CMI (D/E-1) (G) HSCRC-Approved CPC - per rate order 8,500,000 $ 174,600,000 18,250 $ 9,567 (H) Allowed CPC based on actual CMI (FxG) (I) Overcharge (undercharge) in CPC (C-H) (J) Overcharge (undercharge) in Revenue (IxB) (K) % Variance (I/H) Can only adjust Inpatient Routine Centers to achieve CPC compliance $ 9,567 0.9290
0.9310
-0.21% $ 9,627 $ 9,606 $ (39) $ (715,322)
-0.41%
Charge per Episode (CPE) Compliance
Actual Revenue and Cases - YTD Less: Exclusions Less: Readmissions Less: Trim Less: Assessments Included CPE Revenue and Cases Actual CPE (A) Inpatient Revenue $ 200,000,000 (B) Inpatient Cases 21,000 (15,000,000) (2,750) (1,650) (1,900,000) (8,500,000) $ 174,600,000 16,600 $ 10,518 (C) Actual CPE (A/B) (D) Actual CMI (E) HSCRC CMI - per rate order (F) Increase (Decrease) in CMI (D/E-1) (G) HSCRC-Approved CPE - per rate order (H) Allowed CPE based on actual CMI (FxG) (I) Overcharge (undercharge) in CPE (C-H) (J) Overcharge (undercharge) in Revenue (IxB) (K) % Variance (I/H) Can only adjust Inpatient Routine Centers to achieve CPE compliance $ 10,518 1.0100
1.0120
-0.20% $ 10,607 $ 10,586 $ (68) $ (1,128,223) -0.64%
• CPC/CPE Compliance Corridors •
Overcharge Corridors:
– 0% to 1.0% – 1.0% to 1.5% – 1.5% to 2.0% – 2.0% and greater No Penalty 20% Penalty 30% Penalty 40% Penalty
Undercharge Corridors:
– 0% to 2.0% – 2.0 to 3.0% – 3.0% and greater No Penalty 40% Penalty 100% Penalty
Reasonableness of Charges
“ROC” is the acronym for the HSCRC’s Reasonableness of Charges Currently, there is no efficiency measure in place (suspended) HSCRC is developing a new efficiency measure Several parts of the “ROC” will probably remain in the new efficiency measure including peer groups and charge adjustments to account for differences at each hospital.
Required Monthly Reporting
Name of Report
Volumes and Revenues
Description
Inpatient and Outpatient volumes and revenue by rate center. Recently expanded to report In-State vs Out of State and Medicare
Frequency
Monthly Monthly
Due Date
30 days after end of month 30 days after end of month Unaudited Financial Statements Income Statement and Balance Sheet Listing of rate centers with rates outside of Price variance letter, Schedule SB, Schedeule CSS allowed corridors and plan to come into compliance, Supplemental Births, Supply & Drug Compliance Monthly 30 days after end of month
Required Quarterly Reporting
Name of Report
Inpatient Case Mix Data, Outpatient Case Mix Data Denied Admissions Inpatient Hospice Report
Description
Patient specific data including demographics, diagnoses & procedures, financial data Report patients and related charges when 100% of room & board charges are written off for medical necessity Listing of hospice patients with related charges and payments. Not applicable to all hospitals
Frequency
Quarterly Quarterly Quarterly
Due Date
See production schedule on HSCRC website 45 days after end of quarter 45 days after end of quarter AR1, AR2, AR3 Income, expense and utilization reporting for Global Pricing/Capitation arrangements. Not applicable to all hospitals Quarterly 30 days after end of quarter
Required Annual Reporting
Name of Report Description Frequency Due Date
Annual Cost Report Expenses, FTE's, revenues and volume for rate centers and HSCRC defined overhead (OH) centers. Must reconcile to audited financial statements. OH is allocated to rate centers Annually 120 days after end of fiscal year Audited Financial Statements Credit and Collection Policy Trustee Disclosure AR1, AR2, AR3 Special Audit Report Audited Financial Statements Annually Hospital's Credit and Collection policy Annually List of trustees with business addresses, individual disclosure form for each trustee doing > $10,000 business with the hospital Income, expense and utilization reporting for Global Pricing/Capitation arrangements. Not applicable to all hospitals Annually Annually Performed by independent auditing firm, audits various components of the monthly, quarterly and annual reports submitted to HSCRC. HSCRC defines the audit procedures.
Annually 120 days after end of fiscal year 120 days after end of fiscal year 120 days after end of fiscal year 120 days after end of fiscal year 140 days after end of fiscal year Community Benefit Report Federal IRS Form 990 Interns and Residents Wage and Salary Report Listing of expenses incurred providing community benefits (direct and indirect expenses net of offsetting revenue) Federal IRS Form 990 Listing of interns and residents that rotated to hospital during Annually the FY. Includes the medical school graduated from. Not applicable to all hospitals Annually Based on one pay period, groups employees into HSCRC defined categories, calculates an average rate of pay Annually Annually December 15 January 15 January 15 June 1
Acronym
% Occ ACS ACO ADC ADM
Terminology & Acronyms
What It Represents
% of Occupancy Ambulatory Care Services Accountable Care Organization Average Daily Inpatient Census Admission
What It Means
Calculated by dividing total patient days by (# of beds x 365 days).
Services rendered to persons who are not confined overnight in a healthcare institution. Often referred to as “O/P” (Outpatient) services.
Are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve.
Average number of I/Ps (Inpatients) (based on the daily inpatient census) present each day of a given period of time.
Formal acceptance by an institution of a patient who is provided with room and board, continuous nursing service and other institutional services while lodged in the institution.
Classification system used to group ambulatory cases.
Ambulatory Payment Group APG
Terminology & Acronyms
Acronym
ALOS AOB APR-DRG ARR ARMS CMI
What It Represents
Average Length of Stay Average Occupied Beds All Payer Refined-Diagnosis Related Group Admission Readmission Revenue Alternative Rate Setting Methods Case Mix Index
What It Means
Average number of days of service rendered to each I/P discharged during a given period.
Total Inpatient Days divided by 365.
System used by 3M Health Information Systems as the basis of all-payer hospital payment system; used by many hospitals in the US to analyze comparative hospital performance.
Inpatient revenue measurement on a per episode basis.
When a hospital is permitted to accept financial risk for the provision of services under certain conditions and circumstances.
Measure of complexity of patient population and/or treatment provided by an institution; tells how complex patients and services are.
Acronym
CMS CON CPC CPT
Terminology & Acronyms
What It Represents
Center for Medicare and Medicaid Services Certificate of Need Charge Per Case Current Procedural Terminology
What It Means
The federal agency that runs the Medicare program. In addition, CMS works with the states to run the Medicaid program. CMS works to make sure that the beneficiaries in these programs are able to get high quality health care.
Formal state application and approval process for adding new beds and services.
Inpatient revenue measurement on a per case basis.
Numeric coding system maintained by the American Medical Association (AMA). Coding scheme for outpatient procedures and services.
Acronym
DME DSH EIPA EIPD EIPC
Terminology & Acronyms
What It Represents
Direct Medical Education Disproportionate Share Equivalent Inpatient Admission Equivalent Inpatient Days Equivalent Inpatient Cases
What It Means
Direct expenses (salaries, benefits, etc.) related to qualified intern, residents and fellows in teaching related programs.
Providing services to a disproportionately large share of low-income patients. Under Medicaid, states augment payments to hospitals with high DSH. Medicare inpatient hospital payments are also adjusted for this added burden.
Statistic that combines inpatient admissions and total outpatient visits as one unit of measure.
Statistic that combines inpatient days and outpatient ambulatory visits in a weighted method.
Statistic that combines inpatient cases and outpatient ambulatory visits in a weighted method.
Terminology & Acronyms
Calculation of EIPAs: Total Inpatient Revenue $ 63,304.8 A Total Inpatient Admissions Inpatient Unit Revenue Total Outpatient Revenue Total Outpatient Visits Outpatient Unit Revenue Inpatient / Outpatient Unit Ratio Total Inpatient Admissions Outpatient Visits 6,637 B 9.54 C = A / B $ 29,845.7 D 47,274 E 0.63 F = D / E 15.11 G = C / F 6,637 H 3,129 I EIPAs 9,766 J = H + I
Acronym
E & M FS FTE
Terminology & Acronyms
What It Represents
Evaluation and Management Financial Statements Full Time Equivalents
What It Means
Universal codes to bill for patient visits or consultations conducted at a clinic, emergency room or physician’s office.
Balance sheet, income statement, funds statement, statement of changes in financial position or any supporting statement or other presentation of financial data derived from accounting records.
An objective measurement of the personnel employment of an institution in terms of full time labor capability. HSCRC bases FTEs on # of hours worked.
Medicare bases FTEs on # of hours paid.
Acronym
GL GME HCPCS
Terminology & Acronyms
What It Represents
General Ledger Graduate Medical Education Healthcare Common Procedure Coding System
What It Means
A ledger containing accounts in which all the transactions of a business enterprise or accounting unit are classified either in detail or in summary form.
Generally defined as the clinical training following graduation from medical school. This clinical training, which ranges from three to seven years in length (internship and/or residency), has traditionally taken place in teaching hospitals or academic medical centers (AMCs). This is funded in Maryland’s rate-setting system and is the cost of graduate medical education (GME) generally for interns and residents trained in Maryland hospitals.
Alpha numeric billing codes used to identify and bill for items and services not included in the CPT Codes.
Terminology & Acronyms
Acronym
HIPAA HMO HSCRC I/P ICC
What It Represents
Health Insurance Portability and Accountability Act Health Maintenance Organization Health Services Cost Review Commission Inpatient Inter-Hospital Cost Comparison
What It Means
Designed for patient confidentiality, data security and standardization.
A health care provider or group of medical service providers who contracts with insurers or self-insured employers to provide a wide variety of managed health care services to enrolled workers through participating panel providers.
Rate-regulating and rate-setting body in the State of Maryland.
Patient who is provided with room and board, and continuous general nursing services in a hospital. Defined as an admission and an overnight stay.
Cost comparison methodology used in full rate application process.
Acronym
ICD-9 ICD-10 IME MCO
Terminology & Acronyms
What It Represents
International Classification of Diseases – 9 th Revision Clinically Modified International Classification of Diseases – 10 th Revision Clinically Modified Indirect Medical Education
What It Means
Classification of codes that represent diagnoses, conditions and symptoms.
Classification of codes that represent diagnoses, conditions and symptoms. October 2014 Managed Care Organization Indirect Medical Education expenses are generally described as those additional costs incurred as a result of the teaching process (e.g., extra tests ordered by interns / residents or the extra costs of supervision).
A type of Medicare managed care plan where a group of doctors, hospitals and other health care providers agree to give health care to Medicare beneficiaries for a set amount of money from Medicare every month. You usually must get your care from the providers in the plan.
State organization of Maryland hospitals.
Maryland Hospital Association MHA
Terminology & Acronyms
Acronym
MHCC MHIP NOR
What It Represents
Maryland Health Care Commission Maryland Health Insurance Plan Net Operating Revenue
What It Means
An independent regulatory agency whose mission is to plan for health system needs, promote informed decision-making, increase accountability and improve access in a rapidly changing health care environment by providing timely and accurate information on availability, cost and quality of services to policy makers, purchasers, providers and the public.
State-managed health insurance program for Maryland residents who are unable to obtain health insurance from other sources. Each hospital is assessed at 1% of its net patient revenue to operate the program.
Operating gross revenue less any contractual or other revenue deductions.
Acronym
NSP O/P Permanent Revenue PIP PLF
Terminology & Acronyms
What It Represents
Nursing Support Program Outpatient Total Allowed Revenue
What It Means
Nursing Support Program developed to help address the nursing workforce shortage. Each rate-regulated hospital is eligible for a percentage of rate increase to help pay for programs to recruit and / or retain nurses (NSPI and NSPII).
Patient involved in an emergency visit, diagnostic test or clinic visit procedure or service and is not admitted to the hospital.
Permanent revenue represents revenue that a hospital is entitled to on a permanent and ongoing basis. The opposite of permanent revenue is one-time revenue which is only approved for a one year period.
Periodic Interim Payment Price Leveling Factor When a hospital receives cash payments from third party payers (Usually Medicare) in constant amounts each period. The total of these payments received over a year is an estimated cost of providing services to patients covered by the plan.
Factor used to inflate and / or adjust charges from a historical / current period to a current / future period.
Acronym
RAC ROC RVU
Terminology & Acronyms
What It Represents
Recovery Audit Contractor Reasonableness of Charges (Suspended) Relative Value Unit
What It Means
Approved CMS contractors who have been commissioned to review the Medicare claims of acute care facilities to deem if services were necessary or appropriate.
HSCRC’s Reasonableness of Charges Report. This report is the Commission’s tool for assessing the reasonableness of each hospital’s charges on a per case basis relative to their peer group.
Index number assigned to various procedures based upon the relative amount of labor, supplies and capital needed to perform the procedure. Predominantly for ancillary activities and clinic visits (by time and complexity).
Terminology & Acronyms
Acronym
TPR UB-04 UCC W&S QBR
What It Represents
Total Patient Revenue Uniformed Billing 2004 Uncompensated Care Wage & Salary Report Quality Based Reimbursement
What It Means
An agreement which establishes a revenue cap for qualifying hospitals. A qualifying hospital is typically located in a rural area and has a well-defined catchment area with a stable population.
Standard form used for the billing of facility-based / inpatient services, effective July 2007.
Care provided for which compensation is not received (bad debts and charity care).
Job-specific pay information for hospitals. This is used in the calculation of the Labor Market Adjustment for HSCRC ROC and Full Rate Settings.
New HSCRC reimbursement methodology which adjusts reimbursement for identified quality measurements.
Terminology & Acronyms
Acronym
PPC PPR MHAC P4P
What It Represents
Potentially Preventable Complications Potentially Preventable Readmissions Maryland Hospital Acquired Conditions Pay for Performance
What It Means
64 Complications that are highly preventable as defined by 3M.
Readmission scenarios deemed preventable.
Subset of PPC. Considered as “never events”.
Initiative which gives incentive to provider to improve quality of care.
ODS CPE Zero and One-Day Length of Stay Charge per Episode Patients admitted and discharged by a hospital with a length of stay less than or equal to one.
An ARR hospital’s approved revenue constraint as determined by dividing approved included revenue by the count of ARR Episodes of Care