CostReportChanges-AmericanHospitalAssociation.ppt

July 2007 Cost Report Workgroup Cost Report Changes to Improve Accuracy of “Cost-Based” DRG Weights Cost Report Workgroup Findings September 2007 Presentation Overview Background Hospital Technical Expert Workgroup Workgroup Recommendations Operational Approach Questions and Discussion Background August 18, 2006: CMS publishes final rule for IPPS “cost-based” DRG weights Modifies previous DRG weighting system which used only hospital charges CMS attempts to create DRG weights to more accurately reflect “relative resource use” by DRG Background Three-year transition: blend of charge-based and cost-based DRG weight methods for first two years Two data sources used to develop hybrid system: MedPAR files (hospital specific Medicare claims) Hospital Medicare Cost Reports Major financial impact for some acute care hospitals-positive and negative Background Cost report lines grouped into 13 categories and reduced to cost using national cost-to-charge ratios for each category. Calculated for each DRG. Routine Intensive Drugs Supplies/equipment Therapy services Inhalation therapy Operating room Labor delivery Anesthesia Cardiology Laboratory Radiology Other Background Final Rule Inpatient Hospital Rule for Fiscal Year 2008 expanded cost report line groupings into 15 categories. Two additional groupings are “Emergency Room and Blood and Blood Products.” Project Background Final Rule Inpatient Hospital Rule for Fiscal Year 2008 changed classifications of two cost centers EEG moved from Cardiology Category to Laboratory Category (Consistent with MedPAR Category) Radioisotope moved from Other Category to Radiology Services. Hospital Expert Workgroup Project workgroup comprised of expert staff, consultants and hospital leaders representing 3 major national hospital associations American Hospital Association Association of American Medical Colleges Federation of American Hospitals Hospital Expert Workgroup Group charge and responsibility: Identify potential changes