1. Another Boring RHC Cost Report Presentation
(Not Really )
GRHA – December 11, 2017

2. RHC Categories 90 RHCs in Georgia Provider-based = 61
Freestanding = 29
What’s the difference?

3. RHC Categories Provider-based Freestanding (Independent)
Associated with hospital with < 50 beds (0-49)
Associated with hospital with > 49 beds (50+)
Associated with nursing home
Associated with home health agency
Freestanding (Independent)

4. Provider-based RHC Categories
Associated with hospital with < 50 beds (0-49)
NOT subject to per visit cost limit
Subject to productivity standards
Associated with hospital with > 49 beds (50+)
Subject to per visit cost limit

5. RHC Cost Reporting Forms
Provider-based
Form
M-Series of worksheets
Freestanding
Form

6. Cost Report Reimbursement
Medicare Focus
In general, what do RHCs get paid for through the cost report?
Average cost per provider visit
Determination of reimbursement rate
Vaccines
Pneumococcal, H1N1 and Influenza
Bad debts
Uncollectible Medicare patient responsibility

7. Cost Report Reimbursement
Provider-based < 50 beds
Average cost per provider visit
No limit (within reason)
Vaccines
Pneumococcal, H1N1 and Influenza
Bad debts
Uncollectible Medicare patient responsibility

8. Cost Report Reimbursement
Provider-based > 50 beds
Average cost per provider visit
Subject to calendar year limit
Vaccines
Pneumococcal, H1N1 and Influenza
Bad debts
Uncollectible Medicare patient responsibility

9. Cost Report Reimbursement
Freestanding
Average cost per provider visit
Subject to calendar year limit
Vaccines
Pneumococcal, H1N1 and Influenza
Bad debts
Uncollectible Medicare patient responsibility

10. Average Cost Per Visit
Pretty simple, huh?

11. Critical RHC Cost Report Data Elements
Hospital overhead cost allocations
Provider-based
RHC provider FTEs
RHC provider visits
Vaccine Logs
Pneumococcal , H1N1, Influenza
Medicare bad debt listing

12. Hospital Overhead Allocations
Capital costs
Depreciation, interest, insurance
Employee Benefits
Administrative & General
Maintenance & Repairs
Operation of Plant
Laundry & Linen
Housekeeping
Dietary
Cafeteria
Nursing Administration
Central Services and Supply
Pharmacy
Medical Records and Library
Social Service
Non-physician Anesthetists
Should the RHC receive an allocation from each?
Which overhead departments service the RHC?

13. Hospital Overhead Allocations
Why is this important?
Hospital < 50 beds (CAH)
No limit on cost per visit
Hospital < 50 beds (PPS)
What’s the difference?

14. Hospital Overhead Allocations
Why is this important?
Hospital > 50 beds (PPS)
Can help RHC reach cost per visit limit
Does it matter if RHC’s cost per visit is significantly higher than the limit?

15. Hospital Overhead Allocations
Why is this important?

16. Hospital Overhead Allocations
Why is this important?

17. Provider FTEs Numerator
Maintain detailed time records (annual payroll register) supporting number of hours worked per year
Exclude –
Administrative time
Continuing Education time
Conference attendance
Non-productive time
Vacation
Sick
Time spent providing care in settings other than RHC

18. FTE – RHC Patient Care

19. Provider FTEs Denominator
Determine the number of hours per year for which provider must be compensated to meet RHCs definition of FTE

20. Provider FTEs Facility Hours of Operation
Does the facility operate as other than a RHC?
If so, need to maintain calendar documenting the weekly hours of operation as a RHC and as an “other” type of clinic.

21. FTE – Clinic Definition of FTE

22. Provider FTEs

23. RHC Provider Time Log

24. Provider Visits Maintain Log of RHC Visits for RHC Services
Face to face, medically necessary and for RHC services
By provider
Physician
Physician extender
Compare manual log to revenue and usage report for comparability/accuracy
Exclude – Nurse only visits

25. Provider Visits Components of Log Patient name HIC number
Date of service
Diagnosis
Payer (Medicare, Medicaid, Other)
Number of visits

26. RHC Visit Log

27. Productivity Standards
4,200 visits per physician FTE
2,100 visits per physician extender FTE
Total actual visits compared to total “minimum” visits computed per cost report
For example, PA’s actual visits in excess of standard can offset shortfall of physician’s actual visits as compared to standard

28. Provider FTEs - Overstated

29. Provider FTEs - Accurate

30. Provider Visits - Overstated

31. Provider Visits - Accurate

32. Vaccines Vaccinations Pneumococcal, H1N1and Influenza
Reimbursement is on a cost per injection basis
Reimbursement is only on the cost report
Must submit log of all injections given to Medicare beneficiaries
Log (by payer) should include the following:
Patient name
HIC number
Date injection given
Amount of charge

33. Vaccines Vaccinations
Need estimate of average time spent administering the vaccinations
Need vaccine supply cost for:
Pneumococcal
H1N1
Influenza

34. Medicare Bad Debts Types Regular Crossover Indigent
Medicare with Medicaid Secondary
Indigent

35. Medicare Bad Debts Uncollectible Medicare deductibles and coinsurance
Related to covered services
Reasonable collection efforts are made
120 days from date of last receipt (payment)
Uncollectible when claimed as worthless
No likelihood of future recovery
Returned from collection agency (written off)
Recognized in the reporting period deemed worthless
Reduce by amount of recoveries related to or allocated to patient responsibility

36. Medicare Bad Debts Reasonable Collection Efforts
Issue bill shortly after treatment but after receiving Medicare remittance advice identifying patient responsibility
Evidenced by
Subsequent billings
Collection letters
Telephone calls or personal contacts
Same level of effort provided for comparable amounts from Non-Medicare patients

37. Medicare Bad Debts Reasonable Collection Efforts Indigent Patients
In most cases, collection effort should cover 120 days from date of first bill to beneficiary (Serious demand for payment)
>120 days “presumed” uncollectible and can be claimed
If you receive partial payment, the 120 day clock resets from the date of receipt
Indigent Patients
Reasonable collection efforts waived for Medicare indigent patients
Medicare beneficiary that qualifies for Medicaid
Considered indigent automatically
For other Medicare beneficiaries, RHC should apply its customary practices in accordance with policy for determining indigency
Can be written off at date of determination of indigent status
Typically the date of the Medicaid remittance advice

38. Medicare Bad Debts
Maintain listing with all of the following information
Beneficiary name
Beneficiary HIC number
Soon to be MBI – April 2019
Date(s) of service
Date of first bill
Medicare paid date
Date of write-off or date returned from collection agency, if applicable
Amount of debt
Medicare deductible and coinsurance amount
Medicaid payment amount
Medicaid recipient number
Medicaid paid date
Bad debt recovery
Should be maintained throughout fiscal year

39. Opportunities Provide Accurate Data
Check for reasonableness prior to submission
Apply for Exception to Productivity Standard
Demographic data
State RHC’s case
Propose “reasonable” standard
MAC discretion
Evaluate Consolidated Cost Report Option
For hospitals with multiple provider –based RHCs

40. Opportunities Evaluate Adequacy of Average Charge per Visit
Has impact on computed Medicare payment responsibility
Computed cost per visit greater than average charge per visit could result in missed opportunity to collect amounts due from patients
If computed cost is greater than charges, the 80% calculated patient responsibility based on cost reduces Medicare reimbursement and can exceed the actual patient responsibility summarized from the claims payments
Need to evaluate market to determine if setting charges in a manner that makes the RHC whole is appropriate

41. QUESTIONS? Jim L. Creamer, CPA Draffin & Tucker, LLP 229-883-7878