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.”

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


From Maps to Apps: Advertising Public Info on Hospital May Be an Allowable Cost

Many years ago, the only real way to find your way from one city to another was to use a paper road map that had to be unfolded (and, of course, never folded back up the original way).

Today there are many options to help you navigate from websites such as MapQuest and Google Maps, stand-alone GPS units, and smart phone apps such as Waze or Co-pilot.

A similar situations exists for finding a hospital; many years ago you just had to look for the road sign and easily locate the nearest facility.

Today there are many options that publicize and promote hospitals which not only tell you where to find one, but what services they offer, the operating hours, physicians on staff, and many other things. Nowadays many ads go one step further and seek to differentiate it from other hospitals by citing statistics of quality, patient satisfaction, faster wait times, etc.

Tip #29:

Advertising that can be characterized as public information may be considered an allowable cost (CMS Pub 15-1, Section 2136).

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


The Constitution and CMS Regulations as Foundations: Interpreting Living Documents

US Constitution and FlagIt is generally accepted that the Constitution of the United States is known as a “living document” because its authors intended it to be adapted by future generations. In the past 200 years, the Constitution has been amended 27 times. Additional amendments may be needed in the future. For example, advances in technology may change the way we communicate. Someday, we may be able to vote from our own homes.

The federal regulations that govern the Medicare program can be similarly ascribed as a living document. The regulations themselves don’t change very often, but The Department of Health and Human Services, as well as the Centers for Medicare and Medicaid Services are always interpreting the regulations and issuing guidance in how they apply to health care providers.

Unfortunately, there is no crystal ball to see the future in health care. Therefore, it is often up to the individual hospital to understand and interpret the rules. This is especially true in the evaluation of new services and programs a hospital may choose to offer to its community.

In reviewing a new service, a hospital should use the regulations to provide a framework in deciding whether the new cost center is allowable or non-reimbursable.

Tip #27:

Costs of items or services that bear no relationship to care of hospital patients should be disclosed as non-reimbursable cost centers (Pub. 15-1, section 2328)

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


Fee schedule vs. a la carte hospital bills

When dining, one consideration in choosing a restaurant is the concept of “a la carte” dining, which means “from the menu.” When you order a la carte you are ordering individual items, rather than a complete meal. The opposite of a la carte is a “table d’hôte,” which is a meal served at a fixed price. Cheerful couple with menu in a restaurant making orderThe total cost of a meal consisting of several la carte items tends to be much more expensive than that of a fixed price full meal.

A similar concept exists in health care. Someone might receive care at a hospital and then gets an itemized bill for each service provided. This is a la carte care and anyone who has gotten a hospital bill knows this tends to be very expensive. But health care has its own version of table d’hôte called the fee schedule. Fee schedules exist for such things as laboratory, therapies, and ambulance services to name just a few. And just like fine dining, fee schedule health care services are a fixed price.

When a Medicare beneficiary does not pay their responsibility for fee schedule amounts, Medicare has taken the position that since the items are a fixed price, there is no unrecovered cost attributable to uncollectible deductible and coinsurance arising from covered services.

Tip #25:

Bad Debts that arise under a fee schedule are not reimbursable on the Medicare cost report.

Guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website. In addition, each MAC may have supplemental guidance on this issue.

Medicare Intermediary Manual – Transmittal 1872

Questions? Please contact Marie White at 612.253.6546 or


Positively Impact Your Hospital’s Payment Stream with DSH

With all the recent changes in health insurance, it would be simple to assume that how much a hospital will be paid is out of its control. But there are still some opportunities for a hospital to potentially impact its payment stream from Medicare in a positive way. 

For some Prospective Payment System (PPS) hospitals there is an additional funding mechanism to pay for “disproportionate share” (DSH). DSH is funding to hospitals that treat indigent patients under which facilities are able to receive at least partial compensation. The dollars paid are determined using a formula that includes several factors which are determined by the individual hospital and by CMS.

A hospital can influence its own factor by monitoring and reviewing patient days to ensure it is capturing all days that are permitted by the regulations.

Tip #18:

Review DSH percentage for accuracy and confirm appropriate amounts under the new payment methodology.

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

Disproportionate Share Hospital (DSH)

Questions? Please contact Marie White at 612.253.6546 or