What are the most profitable Medicare

Reimbursement Methodologies Project

The executive finance team at Anywhere Hospital is reviewing charge levels for various surgical units.

The team leader has requested a CDM management report from the CDM coordinator (You). She would like the report to include the following:

Medicare reimbursement, cost, and profit for procedures performed during first quarter 20xx (current year).

Additionally, she would like third-party payer average reimbursement, cost, and profit for the same time period.

Complete the Excel spreadsheet and provide your analysis.

To obtain the MCR Reimbursement (Medicare):  Locate current Medicare rate for each CPT code on the most current OPPS Addendum B. Copy the link below into your Web browser or view in Slide Show:

Visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html to find and download Addendum B (center of page)

Transfer the rate figure from Column “F” to the correct row on your spreadsheet in Column “I”

“TPP Reimbursement” (Third Party Payer):

Calculate the TPP Reimbursement using the following formula in Excel: (=F2*.62) -average reimbursement rate for TPP Column F (charge multiplied by .62)

Insert the calculated figure in Column J

MCR Cost = Charge * RCC

Use the RCC provided in the scenario based on the line item revenue code

360 is 0.4043

320 is 0.5267

TPP Cost = Charge * RCC. Note: there is no difference between MCR cost and TPP cost.

MCR Profit = MCR Reimbursement – MCR Cost

TPP Profit = TPP Reimbursement – TPP Cost

MCR Overall Profit:  Multiply profit figures times volumes provided.

TPP Overall Profit:  Multiply profit figures times volumes provided

See following example for formulas

Now that you have completed your spreadsheet, answer the following questions in a separate Word Document.  Support your answers.

Are either of the payers profitable for Anytime Hospital in this outpatient surgical area?

What are the most profitable Medicare

procedures?  Least profitable?

What are the most profitable Third Party

procedures?  Least profitable?

What would you suggest to the Team Leader for the CDM Management?