Ask For Permission, Not Forgiveness

ask-2341784_1920The expression “It is easier to ask forgiveness than it is to get permission” is attributed to Rear Admiral Grace Murray Hopper. She was a U.S. Naval officer and an early computer programmer who, in 1949, recommended a new programming language be developed using entirely English words. She was told she couldn’t do this because computers didn’t understand English. She did not accept this idea and started work on the process, which later become COBOL, which is the major language used in data processing today.

This tactic is not the one you should use if you are wanting to change the allocation basis on your Medicare cost report. The Centers for Medicare and Medicaid Services (CMS) has a set of standard statistics they have approved for use to allocate expenses on the Medicare cost report. If you decide you want to change the order or use a different statistic, this is permissible but CMS has specific instructions on how and when this is allowed. If you make a change without this request, you are at risk of having your cost report rejected.

Tip #36:

A request to change cost finding methods must be made in writing and submitted to the intermediary 90 days prior to the end of the cost reporting period to which the request for change applies (CMS Pub 15-1, Section 2313).

Further guidance can be found on the CMS website: Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or

“Summertime and the Livin’ is Easy” – Except Unexpected ER Visits

George Gershwin wrote the lyrics “Summertime and the livin’ is easy” in 1934 for the opera “Porgy and Bess.” But summer time generally means extended periods of time spent outdoors which can present ample opportunities to sustain injuries (or hurt others). It is not surprising that Emergency Room visits spike during the summer months. From the first signs of the days getting longer until school is back in session visits to the ER increase by 15 to 27 percent.1 So while the livin’ should be easy, it brings new meaning to the sentiment of enjoying careless summer days when they’re spent in an emergency room.

Hospitals ready for this potential influx of patients by increasing staff, but often it is done through the more flexible route of “on call.” Staff who are on call are paid a flat rate per hour to be available if called to come into work. CMS recognizes the need to have physicians available and in limited circumstances, hospitals can claim this on-call time as allowable expense on the Medicare cost report.

Tip #35:

Time studies are needed to support Emergency Physicians Availability and On-Call Time (Pub. 15-1, §Section 2109).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or


1 ER Visits Peak during the Summer Months, By James Baker, MD, Kaiser Permanente Baldwin Park, California

Back to the Drawing Board: Next Occupational Mix Survey by IPPS Hospitals Due July 3, 2017

The expression “Back to the drawing board” is associated with failure of a plan or design and the need to start fresh. The phrase actually originated as the caption to a cartoon in a 1941 New Yorker magazine. The cartoon shows military men racing toward a crashed plane and a man, with a roll of plans under his arm, walking away saying “Well, back to the old drawing board!”

CMS often takes this approach in determining how to reimburse providers for Medicare services, including how wage data is handled for Inpatient Prospective Payment System (IPPS) hospitals.

The reporting of wage index data in one form or another has been required since the implementation of DRGs and the IPPS in 1983. Initially, CMS collected the data every few years, but in 1989 Congress passed legislation directing CMS to update the index annually. The first Medicare wage data was from 1990 cost reports and was used to adjust 1994 IPPS rates. This four-year lag continues today due to the length of the cost reporting cycle and the need to allow time for review and correction.

An occupational mix adjustment was introduced also, but was not implemented for various reasons until 1990 with the passage of the Benefits Improvement and Protection Act (BIPA). BIPA mandated the collection of data on the occupational mix of employees’ data via a survey every three years.

Tip #34:

The next occupational mix survey is due July 3, 2017. Hospitals paid under IPPS must submit wage and hour data for full-time, part-time, contracted employees, and Home Office allocated salaries.

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

CMS Occupational Mix Survey

Questions? Please contact Marie White at 612.253.6546 or


Exception-al CRNAs: Sometimes the Sole Provider in Rural Areas

According to the American Association of Nurse Anesthetists, nurse anesthetists are the oldest nurse specialty group in the United States and have been providing anesthesia care to patients in the United States for more than 150 years. The CRNA (Certified Registered Nurse Anesthetist) credential came into existence in 1956.

CRNAs are the primary providers of anesthesia care in rural America, enabling health care facilities in these medically underserved areas to offer obstetrical, surgical, pain management and trauma stabilization services. In some states, CRNAs are the sole providers in nearly 100 percent of the rural hospitals.[1]

The services of a non-physician anesthetist (CRNA) generally are paid for by the Part B contractor based on a fee schedule rather than on reasonable cost basis through the cost report.

But for some qualified rural hospitals or Critical Access Hospitals, a request can be made on an annual basis for an exception if the facility employed or contracted with not more than one FTE (2080 hours) non-physician anesthetist. There is also a threshold of 800 or fewer surgical procedures requiring anesthesia services and there can be no professional fee billing for the CRNA.

Tip #33:

Rural and Critical Access hospitals can request an exception to the CRNA Fee schedule if they meet certain criteria (CMS Pub 15-2, Section 4013). Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-2, Chapter 40

Questions? Please contact Marie White at 612.253.6546 or

[1] American Association of Nurse Anesthetists, “Certified Registered Nurse Anesthetists Fact Sheet.”

“I Know It When I See It”

In 1964, there was a Supreme Court decision—Jacobellis v. Ohio—on the First Amendment and how it applied to the showing of a movie. The Supreme Court ruled that the First Amendment does not permit censorship. The most famous opinion in that decision was by Justice Potter Stewart who wrote “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”. . .

The phrase “I know it when I see it” has become a colloquial expression whereby a speaker attempts to categorize an observable fact or event, although the category is subjective or lacks clearly defined parameters.

This expression can be applied to hospitals in their efforts to distinguish Implantable Devices charged to patients from regular billable Medical Supplies. CMS has never provided any specific guidance, only that hospitals should report UB revenues codes 0275 – pacemaker, 0276 – intraocular lens, 0278 – other implants and 0624 – Food and Drug Administration (FDA) investigational devices on line 72.

Some general guidance is given that instructs hospitals to have an established charge structure which is applied uniformly to each patient as services are furnished which is reasonably and consistently related to the cost of providing the services.

Tip #32:

The identification of billable Medical Supplies versus Implants is at the hospital’s discretion, but ensure you have a uniform charging structure that could withstand CMS scrutiny (CMS Pub 15-1, Section 2203).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or


Be Your Own Insurance Spokesperson

The insurance industry is constantly reminding people to review their current insurance premiums and do a comparison to see whether there’s a better deal out there. Many of the national carriers have spokespeople or mascots who poke fun at all that can go wrong if you fail periodically reevaluate your insurance plan for adequate coverage. No such spokespeople or mascots exist to give reminders to hospitals.

The regulations allow hospitals to purchase coverage from a commercial company, be self-insured or a combination of the two. This regulation applies to health insurance coverage for employees, malpractice insurance for physicians, or general liability coverage for the entity. The selection of one kind over another is only required to be “reasonable and prudent” for the organization.

The regulations also recommend the hospital should conduct a comparative analysis which demonstrates that the provider’s choice results in a reasonable cost for the coverage offered and that the extent of coverage is consistent with sound management practices. This analysis should be performed on a periodic basis, usually every three to five years, to assure consistent application of the prudent buyer principle and to properly monitor the cost effectiveness of the insuring method being applied. 

Tip #31:

Periodically conduct a comparative analysis of your health insurance to ensure your facility is meeting the “prudent buyer” principle (CMS Pub 15-1, Section 2162). Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or


How to Apply Your Memory Skills in the Matching Game to Cost Reports

From a very early age, the importance of memory and matching is taught, especially through the use of games such as “Concentration.” The game involved flipping over two cards and trying to find a match. If there were no matches, you flipped the cards back down and it was someone else’s turn or you tried two other cards. The simplest versions had pictures of objects and the more complicated might have numbers, words, colors or some combination.

For Medicare cost reporting, the concept of matching is applied to clinical items or services. In preparing your cost report, the expectation is that clinical service expenses, revenues, and associated statistics will be disclosed on the same cost center (or line).

The importance of this is not widely known, but the Centers for Medicare and Medicaid Services (CMS) does use the cost report and related patient claims to develop standard payment rates for inpatient and outpatient services, as well as other reimbursement related items such as outlier adjustments and various indices.

Tip #30:

Ensure costs, charges and statistics are properly matched across the entirety of the cost report worksheets (CMS Pub 15-1, Section 2203).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or