IMPACT OF CHANGES TO PROVIDER-BASED HOSPICE MEDICARE COST REPORT SCHEDULES 12/13/2016. Jessica K. Dillard, CPA Consultant
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1 IMPACT OF CHANGES TO PROVIDER-BASED HOSPICE MEDICARE COST REPORT SCHEDULES December 14, 2016 Mark P. Sharp, CPA Partner Jessica K. Dillard, CPA Consultant 1
2 TO RECEIVE CPE CREDIT Participate in entire webinar Answer polls when they are provided If you are viewing this webinar in a group Complete group attendance form with Title & date of live webinar Your company name Your printed name, signature & address All group attendance sheets must be submitted to training@bkd.com within 24 hours of live webinar Answer polls when they are provided If all eligibility requirements are met, each participant will be ed their CPE certificates within 15 business days of live webinar OBJECTIVES Identify upcoming changes in provider-based hospice Medicare cost report schedules Discuss changes needed to hospice chart of accounts Initiate needed adjustments in hospice internal record tracking & complete reporting Discuss lessons learned from these changes experienced with freestanding hospice agencies 2
3 FREESTANDING HOSPICE COST REPORT Effective for cost reporting periods beginning on or after October 1, 2014 Outlined in CMS Transmittal in August Guidance/Guidance/Transmittals/2014-Transmittals- Items/R1P243.html NEW PROVIDER-BASED HOSPICE SCHEDULES SNF-Based CMS Transmittal in August Guidance/Guidance/Transmittals/2016-Transmittals- Items/R7PR241.html Home Health-Based CMS Transmittal in October Guidance/Guidance/Transmittals/Downloads/R17p232.pdf Hospital-Based CMS Transmittal in November Guidance/Guidance/Transmittals/Downloads/R10P240.pdf 3
4 NEW PROVIDER-BASED HOSPICE SCHEDULES Effective for provider-based cost reporting beginning on or after October 1, 2015 Full-year cost reports FYEs 9/30/16 & after Short year, CHOWs, etc. Period ends may be prior to 9/30/16 NEW HOSPICE COST REPORT SCHEDULES Items unchanged For reporting all costs Costs adjusted based on Medicare requirements Use of general cost centers to be allocated to program cost centers Utilization data relatively the same Computes costs per day Costs attributed to payer 4
5 NEW HOSPICE COST REPORT SCHEDULES Changes designed to compute costs by level of care Continuous home care Routine home care Inpatient respite care General inpatient care NEW HOSPICE COST REPORT SCHEDULES Increased allocations for general service costs Often referred to as overhead items Expanded from 6 to 16 cost centers More methods for allocations Increased direct program cost centers For direct hospice patient care services For nonreimbursable programs 5
6 GENERAL SERVICE COST CENTERS Capital building & fixtures Capital moveable equipment Employee benefits Administrative & general Plant operations & maintenance Laundry & linen service Housekeeping Dietary Nursing administration Routine medical supplies Medical records Staff transportation Volunteer service coordination Pharmacy Physician administrative services Other general services DIRECT PATIENT CARE COST CENTERS* Inpatient care contracted Medical social services Lab & diagnostics Physician services Spiritual counseling Nonroutine medical supplies Nurse practitioner Dietary counseling Outpatient services Registered nurse Counseling other Palliative radiation therapy LPN/LVN Aide & homemaker Palliative chemotherapy Physical therapy DME/oxygen Other patient care Occupational therapy Patient transportation Speech therapy Imaging services * Required for each of the four levels of care 6
7 NONREIMBURSABLE PROGRAM COST CENTERS Bereavement program Volunteer program Fundraising Hospice/palliative med fellows Palliative care program Other physician services Residential care Advertising Telehealth/telemonitoring Thrift store Nursing facility room & board Other nonreimbursable TOUR OF NEW COST REPORT FORM SCHEDULES 7
8 SOURCES OF DATA Accounting information Trial balance Financial statements General ledger Payroll data Breakdown by level of care SOURCES OF DATA Utilization & charge data Internal billing & clinical software Contractors/service providers, i.e., PBM, DME/oxygen, etc. Office/facility floor plans Other allocation statistics 8
9 MAKING NECESSARY CHANGES Time & money investment Revising chart of accounts Adjusting data collection methods Payroll Charges & utilization Statistics Reviewing agency processes Providing staff training CHART OF ACCOUNTS Key to successful transition Sufficient detail for your needs So you don t have to backtrack For cost report purposes For management purposes See full example in Attachment B 9
10 CHART OF ACCOUNTS Keep revenue & costs in right buckets Revenues by service & payer Costs by type of costs per cost reporting & management needs General service Direct patient care services (by level of care) Nonreimbursable services Unallowable costs Match cost buckets with revenue buckets CHART OF ACCOUNTS General Service Costs Capital building & fixtures Nursing administration Capital moveable equipment Routine medical supplies Employee benefits Medical records Administrative & general Staff transportation Plant operations & maintenance Volunteer service coordination Laundry & linen service Pharmacy Housekeeping Physician administrative services Dietary Other general services 10
11 CHART OF ACCOUNTS Reimbursable Direct Patient Care Service Costs Inpatient care contracted Medical social services Lab & diagnostics Physician services Spiritual counseling Nonroutine medical supplies Nurse practitioner Dietary counseling Outpatient services Registered nurse Counseling other Palliative radiation therapy LPN/LVN Aide & homemaker Palliative chemotherapy Physical therapy DME/oxygen Other patient care Occupational therapy Speech therapy Patient transportation Imaging services CHART OF ACCOUNTS Reimbursable direct patient care services Broken down by level of care Sample accounts for registered nurse wages 11
12 CHART OF ACCOUNTS Sample of tracking wages & travel by level of care (oldfashioned way) CHART OF ACCOUNTS Tracking other reimbursable direct patient care services by level of care DME/oxygen Patient transportation Imaging services Labs & diagnostics Nonroutine medical supplies Other patient care costs 12
13 CHART OF ACCOUNTS Nonreimbursable Service Costs Bereavement program Volunteer program Fundraising Hospice/palliative med fellows Palliative care program Other physician services Residential care Advertising Telehealth/telemonitoring Thrift store Nursing facility room & board Other nonreimbursable CHART OF ACCOUNTS Nonreimbursable versus unallowable Nonreimbursable receives allocation from general service costs Unallowable costs are removed & don t receive allocation from general service costs Be sure chart of accounts maintains detail to easily identify unallowable costs 13
14 UTILIZATION DATA Hospice days by level of care by Medicare, Medicaid & other Dual eligibles go into Medicare Contracted days for inpatient respite care & general inpatient care by Medicare, Medicaid & other Subset of total hospice days STATISTICS To allocate general service costs Capital building & fixtures Square footage Capital moveable equipment Dollar value (net book value of equipment) Consider requesting square footage Employee benefits Gross salaries 14
15 STATISTICS To allocate general service costs Administrative & general Accumulated costs Plant operations & maintenance & housekeeping Square footage Request for change in order of allocation to pre-administrative & general allocation Consider reclassing to administrative & general STATISTICS To allocate general service costs Laundry & linen, dietary & residential care services In-facility days (noncontracted) Nursing administration Direct nursing hours (RNs & LPNs) 15
16 STATISTICS To allocate general service costs Routine medical supplies, medical records & physician administrative services Patient days Staff transportation Mileage Generally when fleet utilized STATISTICS To allocate general service costs Volunteer service coordination Hours of service Consider request for change in order of allocation (pre-a&g) Activity Administrative & general Hours Patient residence patient support Fundraising Marketing/advertising Etc. 16
17 STATISTICS To allocate general service costs Pharmacy Charges Four levels of care plus nonreimbursable services & unrelated to terminal illness Per diem can use contract rates by type of day Consider requesting patient days LESSONS LEARNED FROM FREESTANDING CHANGES Hospice Cost Report Recommendations from NAHC & HHFMA Representatives (Attachment C) Costing by level of care Contracted inpatient days & allocation of A&G expenses Physician administrative services/medical director Medical supplies (routine versus nonroutine) 17
18 LESSONS LEARNED FROM FREESTANDING HOSPICE CHANGES Costs that should be reflected on most hospice cost report schedules Administrative & General Volunteer Service Coordination Physician Administrative Services Pharmacy Registered Nurse Chaplain Hospice Aide & Homemaker Service Medical Social Service DME/Oxygen Labs & Diagnostics Nonroutine Medical Supplies Bereavement USE OF COST REPORT DATA Key performance indicators Current cost report provides good information See Attachment D for example New cost report information will be better Medicare rate changes & payment model reform Embrace the changes! 18
19 QUESTIONS? CONTINUING PROFESSIONAL EDUCATION (CPE) CREDITS BKD, LLP is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: The information in BKD webinars is presented by BKD professionals, but applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor before acting on any matters covered in these webinars. 19
20 CPE CREDIT CPE credit may be awarded upon verification of participant attendance For questions, concerns or comments regarding CPE credit, please BKD Learning & Development Department at THANK YOU! FOR MORE INFORMATION Mark Sharp Jessica Dillard
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