Ashley Crea Reimbursement 333 April 20, 2014

$how Me the Money!

This years expenses included: Assignment #1 If there were no expenses paid within the year:

Answer: If Alexander continued his with normal yearly expenses that he has had over the previous year then it would be beneficial for him to switch to a high deductible insurance policy with a health spending account. In the event that he did not have any extra expenses as he did this year and only kept his prescription it would not be beneficial for him to switch, he should just keep his current policy. By switching to a high deductible plan Alexander would have a higher monthly premium but the extra expense would be placed into an account where he could pay for care, procedures, or prescriptions. He would at least save $260.00 over the year by switching. Any expenses that he encountered with his physical therapist, minor, procedures, and prescriptions could be paid for from the spending account. They only downfall would be if he was in an accident his insurance benefits with the high deductible plan may not be as good as his previous plan and the funding in health spending account may not be enough to cover everything. Also, his age could be an issue because that is when lots of health screening procedures are beginning to happen which could also be costly and not sufficiently covered by the high deductible plan. Assignment #2 Use the information found in figures 1 and 2 (below) and tables 6.7-6.11 from the textbook to complete table 1 in order to determine the IPF-PPS reimbursement for this encounter.

Bed size: 350 beds Classification: Rural Full Service ED: Yes

Figure 1: Facility Information Location: Columbus, Ohio Wage Index: .9806 Per-diem unadjusted rate (RY 2012): $685.01

Admit Date: January 1, 2012 Patient Age: 62 Principal Diagnosis: 295.34 Secondary Diagnosis: 301.6 Secondary Diagnosis: 250.02 MS-DRG: 885 ECT treatments: 90870 Step One Two Three Four Five Six Seven

Figure 2: Claim Information Discharge Date: January 15, 2012

LOS: 14 days

Eight

Paraphrenic schizophrenia, chronic with acute exacerbation Dependent personality disorder Uncontrolled diabetes mellitus Psychoses 3 units $294.91 per unit (RY 2012) Table 1 Methodology Total (per-diem rate * .70317 * WI) 472.33 If COLA (see Table 6.11) then (per-diem rate * .29683 * COLA) 203.33 If non-COLA then (per-diem rate* .29683) Sum results of step 1 and step 2 675.66 Use mini-worksheet A (see below) PPS adjustment factor 1.31 Multiply result of step 3 times result of step 4 885.11 Use mini-worksheet B (see below) Sum of day rates 12,922.61 If COLA then ((ECT pymt rate * .70317 * WI)+(ECT pymt rate * .29683 * COLA)) * units of service If non-COLA then ((ECT pymt rate * .70317 * WI) + (ECT pymt rate * 872.66 .29683)) * units of service (3) Sum results of step 6 and 7 13,795.27

Mini Worksheet A A. Enter adjustment factor if rural location (see page 149): B. Enter adjustment factor if teaching facility: C. Enter adjustment factor for DRG (see Table 6.8): Step Four D. Enter adjustment factor for comorbidity (see Table 6.9): E. Enter adjustment factor for age (see Table 6-10): Multiply applicable adjustment factors together to

1.17 NULL 1.00 1.05 1.07 1.31 Enter PPS adjustment factor in Table 1 row four.

determine PPS adjustment factor:

Mini Worksheet B Day Day one Day two Day three Day four Day five Day six Day seven Step Six Day eight Day nine Day ten Day eleven Day twelve Day thirteen Day fourteen Total

Adjustment Factor 1.31 1.12 1.08 1.05 1.04 1.02 1.01 1.01 1.00 1.00 0.99 0.99 0.99 0.99

Adj. Factor * adjusted per-diem rate (step 5) 1,115.49 991.32 955.92 929.37 920.51 902.81 893.96 893.96 885.11 885.11 876.26 876.26 876.26 876.26 12,922.61

Assignment #3 High cost devices are used in many inpatient surgery cases. The Safe-Cross, radio frequency total occlusion crossing system, is such a device. The Safe-Cross guidewire is present on the following claim. The 2013 IPPS high-cost outlier threshold is $21,821; the hospital specific CCR is: 0.329; the hospital base rate is $5,200.00. Using these figures and the data in the attached claim, complete the following outlier payment calculation: Cost of claim= charge* hospital specific cost to charge ratio 39,677.99 = 120,601.80 * 0.329 Reimbursement of claim = MS-DRG relative weight * hospital base rate 16,414.32 =3.1566 *5,200.00 Outlier = cost of claim > reimbursement of claim + threshold Outlier= 39,677.99 > 16,414.32 + 21,821 39,677.99 > 38,235.32

Does this claim qualify for a high cost outlier payment? If so, calculate the total reimbursement for this claim, including the additional amount that the facility would receive for the high cost outlier. HC outlier payment = 80% * [cost (claim reimbursement + threshold)] 1154.14 = .80 * [39,677.99 (16,414.32 + 21,821)] TOTAL reimbursement for claim = claim reimbursement + HC outlier payment

17,568.46 = 16,414.32 + 1154.14 $120,601.80 17,568.46= $130,033.34, the difference in payment/cost What are your thoughts on the indicated cost of this visit and the projected reimbursement amount? What impact does this have on the hospital, on the payer, on the patient, and on society? Is this an issue that needs addressed? Why or why not? Answer: I would like to know why the indicated costs of this visit are so high in the first place. I understand that the price of each test and procedure are based on the chargemaster and predetermined rates for the procedures and medications but there has to be an explanation for why this is so high compared to what is actually going to be reimbursed. If the indicated charges of $120, 601.80 are the actual costs that the hospital incurred while the patient was being treated then they will be losing a very large sum of money. Hospitals would go out of business if this is their actual costs for treating patients. For the payer, they are only going to pay out an extremely small fraction of the actual cost in this case. There must be a reason to why the payer feels that the reimbursement that they will pay is so low. There are a few factors such as negotiated rates with the hospital and providers but there has to be something more. I think that third party payers have some extra insight to why they are only going to pay so little. They also have a risk pool where they can afford to take on the responsibility of high payments so why is the actual payment going to be lower? I feel most for patients without insurance who are in this situation of having a medical bill of $120,601. The chargemaster over calculates the actual cost of the care and they are stuck with the bill. This is an issue for many people. They end up making payments on it for many years and sometimes never pay it all. Hospitals are then impacted again because even if the cost of care was lower they may never get paid enough to cover the actual cost because patients cant afford to pay. This ends up back in the hands of the hospitals. In order for hospitals to continue operations they do need to have an income, just not as much as they are billing for. If they continue not getting paid by patients who cannot afford the high costs and only make a fraction of the money back through government healthcare eventually they will go out of business. Society cannot function very well without healthcare. They whole system needs to be reworked because it cannot continue this way for much longer.

Admit Date: Principal Dx: Secondary Dx: Secondary Dx: Secondary Dx: Principal Px: Secondary Px: Secondary Px: Secondary Px: MS-DRG: 246 RW: 3.1566

Inpatient Claim January 1, Discharge January 10, Length of Stay: 9 days 2013 Date: 2013 410.71 Subendocardial infarction, initial episode of care 414.01 Coronary atherosclerosis of native coronary artery 427.1 Paroxysmal ventricular tachycardia 272.0 Pure hypercholesterolemia 00.66 Percutaneous transluminal coronary angioplasty 36.07 Insertion of drug-eluting coronary artery stent 39.29 Other vascular shunt or bypass 37.22 Left heart cardiac catheterization Percutaneous cardiovascular procedure with drug-eluting stent with major complication/comorbidity or 4+vessels/stents Claim Detail Revenue Code Description Room & board private Room & board semi private Intensive care general Intensive care intermediate ICU Pharmacy general Pharmacy drugs incident to radiology Pharmacy IV solutions Pharmacy other pharmacy Medical/surgical supplies general Medical/surgical supplies sterile supply The Safe-Cross guidewire Medical/surgical supplies other implants Laboratory chemistry Laboratory Immunology Laboratory Hematology Laboratory Arteriography Operating room general Operating room minor surgery Anesthesia - general Blood and blood component admin, process, storage - gen Respiratory services general Physical therapy - general Occupational therapy general Cardiology general Cardiology cardiac cath lab Cardiology - echocardiology Recovery room general EKG/ECG - general Other diagnostic services peripheral vascular lab TOTAL CHARGE:

Revenue Code 110 120 200 206 250 255 258 259 270 272 272 278 301 302 305 323 360 361 370 390 410 420 430 480 481 483 710 730 921

Charge $4,375.00 $1,700.00 $2,910.00 $1,780.00 $1,486.66 $728.13 $1,583.60 $7,766.18 $8,256.00 $8,366.25 $12,000.00 $28,623.00 $2,739.00 $648.00 $2,335.00 $2,491.00 $13,875.00 $517.00 $209.00 $668.00 $21.00 $314.00 $441.00 $5,629.00 $6,249.00 $1,786.00 $1,648.00 $1,098.00 $359.00 $120,601.80