Medicare Cost Report Basics: Reimbursement for Organ Acquisition Robert Howey MBA, MHA, CPA Director, Toyon Associates test

Objective After the session, you will be able to: Understand the Medicare cost report reimbursement methodology, areas of risk, and areas of opportunities Understand the preparation of the cost report and types of costs included/excluded Also as it relates to the TFC role

Agenda Medicare Cost Report Overview Types of Organ Acquisition Costs Medicare Reimbursement Methodology

Medicare Cost Report Overview

What is a Medicare cost report? Medicare Part A Report costs to provide services to beneficiaries Settlement of pass-through reimbursement Due 5 months after fiscal year end CP1301254 Bathala, Venugopal pjs 02-20-2008

What is a Medicare cost report? Why is it important? Cost reimbursement for organ acquisition Significant revenue opportunity Complex rules and guidelines Audit risk Requires significant effort across multiple departments CP1301254 Bathala, Venugopal pjs 02-20-2008

What is a Medicare cost report? Why is it important? What are organ acquisition costs? CP1301254 Bathala, Venugopal pjs 02-20-2008

Definition of Organ Acquisition Costs In general, represents the necessary and reasonable costs attributable to acquiring an organ and preparing the potential donor(s) and transplant recipient for organ transplantation.

Post-Transplant Follow-Up ORGAN ACQUISITION FOR LIVE DONORS Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers PRE-TRANSPLANT Transplant Surgery Post-Transplant Follow-Up Evaluation Maintenance I II III IV ORGAN ACQUISITION FOR RECIPIENTS ORGAN ACQUISITION FOR LIVE DONORS

Types of Organ Acquisition Costs

Organ Acquisition Costs CP1301254 Bathala, Venugopal pjs 02-20-2008

Direct Organ Acquisition Costs Dedicated Support Personnel (examples): Administrator/Manager RN Coordinator Social Worker Dietitian Financial Coordinator QAPI Database Administrator Medical/Surgical Director Living Donor Advocate CP1301254 Bathala, Venugopal pjs 02-20-2008

Direct Organ Acquisition Costs If not 100% organ acquisition activity, complete a TIME SURVEY.

Other Direct Costs (examples): OPO organ fee Transplant registry fees Tissue typing of donor and recipient Physician preadmission transplant evaluation Other external diagnostic testing Transportation costs for organ retrieval Surgeon procurement Other departmental costs CP1301254 Bathala, Venugopal pjs 02-20-2008

Direct Organ Acquisition Costs NOT considered OAC: Burial expenses for deceased donor Costs for organs sent outside the U.S. Living donor travel Physician backbench preparation UNOS-required 6-month, 1-year and 2-year follow-up visits Services related to treatment for the underlying disease Source: Provider Reimbursement Manual (CMS Pub. 15-1), Sections 3103B, 3106A, 3108C CP1301254 Bathala, Venugopal pjs 02-20-2008

Organ Acquisition Costs CP1301254 Bathala, Venugopal pjs 02-20-2008

Hospital Services TFCs need to be upfront with donors and recipients about their responsibility. Difference between evaluation and treatment.

TRANSPLANT RECIPIENT SERVICES Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers TRANSPLANT RECIPIENT SERVICES MEDICARE NON-MEDICARE HOSPITAL PHYSICIAN Pre-Transplant Write-off charges and capture for cost report Reimbursed via C/R Bill to transplant hospital Bill to Payer Capture charges for cost report Transplant I/P Episode Bill to MAC Reimbursed DRG Bill to Carrier Reimbursed via Fee Schedule Bill to payer Post-Transplant Reimbursed APC

TRANSPLANT LIVE DONOR SERVICES Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers TRANSPLANT LIVE DONOR SERVICES MEDICARE NON-MEDICARE HOSPITAL PHYSICIAN Pre-Transplant Write-off charges and capture for cost report Reimbursed via C/R Bill to transplant hospital Reimbursed via SAC Transplant I/P Episode Bill to Carrier w/ Q3 modifier Reimbursed via Fee Schedule Bill to recipient’s payer Post-Transplant Follow-Up Post-Discharge Complications (effective 11/28/11) Bill to MAC Reimbursed via IPPS/OPPS Occ Code 36 Pat Rel Code 39

Pre-Transplant Charge Flow: Prospective Recipients Strategic Management of Organ Acquisition Cost Centers (Presented by John Rogers)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers Pre-Transplant Charge Flow: Prospective Recipients

Pre-Transplant Charge Flow: Prospective Live Donors Strategic Management of Organ Acquisition Cost Centers (Presented by John Rogers)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers Pre-Transplant Charge Flow: Prospective Live Donors

Organ Acquisition Costs CP1301254 Bathala, Venugopal pjs 02-20-2008

Common OAC Overhead Costs Space (Square Footage) Building Equipment Plant Operations Housekeeping Capital Related – Depreciation of Building/Equipment, Plant Operations, Housekeeping (Utilizes square footage statistic) CP1301254 Bathala, Venugopal pjs 02-20-2008

Common OAC Overhead Costs Employee Benefits (Salaries) Cafeteria (FTEs) Administration (Accumulated Cost) Accounts Receivable (Gross Charges) Medical Records (Gross Charges) Nursing Administration (Nursing FTEs) Social Services (Time Spent) Are these dedicated or shared units? CP1301254 Bathala, Venugopal pjs 02-20-2008

Allowable Or Non-Allowable?

Medicare Reimbursement Methodology

Medicare Reimbursement Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers Medicare Reimbursement Medicare Ratio Medicare Usable Organs X Total Usable Organs Medicare Organ Acquisition Reimbursement

Medicare Usable Organs Medicare Ratio Medicare Usable Organs Total Usable Organs Medicare Primary Transplants Total Transplants Medicare Secondary Transplants (if Medicare had some liability) Deceased Donor Organs Organs Sold to Other Hospitals (e.g., Paired Exchange)

Takeaways Accounting for TFC costs: Review policies/procedures Salary/Benefits Space Other overhead Review policies/procedures Donor/recipient financial responsibility Understanding Medicare reimbursement

Thank you! Let’s Stay in Touch! Robert Howey (888) 514-9312, ext. 3147 robert.howey@toyonassociates.com

Internet-Only Manuals (IOM) Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers CMS References Paper Based Manuals Provider Reimbursement Manual, Part I, Chapter 31 Internet-Only Manuals (IOM) Medicare Benefit Policy Manual (Pub. 100-02, Chapter 11, Section 140) Medicare Claims Processing Manual (Pub. 100-04, Chapter 3, Section 90) https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/index.html