Instructions and Guidance HI215 Final Project Instructions and Guidance

Final Project: Scenario The executive finance team at Anywhere Hospital is reviewing charge levels for various surgical units. The team leader has requested a CDM management report from the CDM coordinator (You). She would like the report to include the following: Medicare reimbursement, cost, and profit for procedures performed during first quarter 20xx (current year). Additionally, she would like third-party payer average reimbursement, cost, and profit for the same time period. Possible audio: “These are your instructions for your Final Project. You are receiving the instructions now, in Unit Eight, though this assignment is not due until Unit Nine. You are provided with the extra time in which to do this assignment due to the time involved. You will be asked to complete an Excel spreadsheet with specific formulas though you may wish to manually perform the calculations as well. On this first slide, you are given the scenario for this assignment”.

Final Project This is just a portion of the blank spreadsheet that will need to be filled out. The columns in red are the columns in which figures are required. Note that it is only a portion of the length of the spreadsheet. This is a portion of your spreadsheet in which you will provide all of the calculations for the columns in red. Definitions include the following: MCR Reimbursement: Medicare Reimbursement; TPP Reimbursement: Third Party Payer and then cost, profit, and overall profit based on volume.

Final Project: Formulas and Instructions Complete the Excel spreadsheet and provide your analysis. To obtain the MCR Reimbursement (Medicare): Locate current Medicare rate for each CPT code on the most current OPPS Addendum B. Copy the link below into your Web browser or view in Slide Show: Visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html to find and download Addendum B (center of page) Transfer the rate figure from Column “F” to the correct row on your spreadsheet in Column “I” Copy the following link in your web browser It will open up to the Medicare Outpatient Prospective Payment system page.

Once you click on the web link, it will open to this page Once you click on the web link, it will open to this page. Click on the “Related Links” Addendum B

Addendum B CMS Table The CMS Table will open up after you agree to the terms. Take the payment rate from Column “F” and transfer the dollar amount for the specified HCPCS Code. Be very careful in transferring the right rates to the right codes on your spreadsheet. The CMS Table will open up (after you agree to the terms). You will take the payment rate from column “F” and transfer the dollar amount for the specified codes. Be very careful in transferring the right rates to the right codes. Note that you need to page down until you find the first HCPCS code that you need which is 19100.

Final Project MCR Rates from Table go in Column I The Medicare Rate will go into Column “I” and the TPP Rate will go into Column J: =F2*.62 You will need to utilize the Excel formula (or do by hand) to obtain the rate for column “J”. Utilize =F2*.62 for TPP Reimbursement for Column J (see instruction 2)

Final Project: Instructions “TPP Reimbursement” (Third Party Payer): Calculate the TPP Reimbursement using the following formula in Excel: (=F2*.62) -average reimbursement rate for TPP Column F (charge multiplied by .62) Insert the calculated figure in Column J MCR Cost = Charge * RCC. Use the RCC provided in the scenario based on the line item revenue code 360 is 0.4043 320 is 0.5267 TPP Cost = Charge * RCC. Note: there is no difference between MCR cost and TPP cost. See document on working with Excel Formulas in Doc Sharing and within the Assignment information.

Final Project MCR Cost and TPP Cost = Charge * RCC Use the RCC provided in the scenario based on the line item Rev Code D 360 is 0.4043 (=F( ) * 0.4043) or 320 is 0.5267 (=F2 * 0.5267) Insert the calculated figure in both Column K and Column L; they will be the same.

Final Project This is a partially completed table showing the MCR Cost and TPP Cost. Now you will calculate profit. “You have now completed the Medicare and Third Party Payer Reimbursement and cost. Now you will calculate the profit for each.

Final Project MCR Profit = MCR Reimbursement – MCR Cost TPP Profit = TPP Reimbursement – TPP Cost MCR Overall Profit: Multiply profit figures times volumes provided. TPP Overall Profit: Multiply profit figures times volumes provided See following example for formulas You will continue to use Excel formulas or calculate by hand to figure the profit.

Final Project Instructions “You will continue to utilize Excel Formulas (or by hand) to calculate the individual unit profit margin as well as the Overall profit based on the number of cases (volumes Columns “G” and “H”)” MCR Profit = MCR Reimbursement – MCR Cost: Excel Formula (=I2-K2) for Column M TPP Profit = TPP Reimbursement – TPP Cost: (=J2-L2) for Column N

Final Project Instructions “Continue with calculating the “overall Medicare and TPP Profit” based on volumes” To calculate Overall MCR Profit, use Formula (=G2*M2) for Column “O” To calculate Overall TPP Profit, use Formula (=H2*N2) for Column “P”

Final Project This is the completed spreadsheet for the first two rows of your Assignment. Review carefully.

Final Project: Analysis Now that you have completed your spreadsheet, answer the following questions in a separate Word Document. Support your answers. Are either of the payers profitable for Anytime Hospital in this outpatient surgical area? What are the most profitable Medicare procedures? Least profitable? What are the most profitable Third Party procedures? Least profitable? What would you suggest to the Team Leader for the CDM Management? “Congratulations! You have completed your Final Project. Submit your completed Excel Spreadsheet document and your Analysis Word document to the Unit 9 Final Project drop box”.