NN&I - July 2010
Renal Economics 34 Nephrology News & Issues July 2010Subscribe to our free eNewsletter at www.nephronline.com ESRD patient. We have started review-ing necessary labs and negotiating with lab providers to provide a panel at a reasonable cost. Communication with referring nephrologists and other phy -sicians will be essential in maintain- ing an alliance in the care of patients, and protecting against fragmentation in care. 5. Cost reductions Staffing costs account for near -ly 40% of total expenses of a dialy-sis center. There have been significant increases in staffing costs recently due to the mandatory certification of all patient care technicians and a shortage of nurses. Facilities need to tightly con-trol staffing cost, with special attention to overtime pay. Our strategy We have been able to maintain adequate clearances with smaller and cheaper dialyzers using airless Streamline bloodlines with additional safety against transmission of hepatitis. Additional cost savings were generated by reduced dialysate flow, lower hepa-rin requirement and reduced regulated waste generation. The cost reduction strategies may also stimulate research into safer reuse of dialyzers. 6. Financials The "one time election" to opt into the bundle is Nov. 16. CMS has made a Facility Level Impact File6 (Flat file) which shows an expected mean Case Mix Adjustment (CMA) for each dial-ysis center, to help facilities decide whether to transition to bundled pay-ment gradually, or all at once. When we reviewed our facilities' mean CMAs based on chart review, we found sub-stantial discrepancy with the Flat File CMA. How best to make the election? Our strategy We found the concept of the "naked bundle" helpful to understand what the real bottom line will be. By tak -ing into account the five undisputed parameters (area wage index, sex, age, body mass index, and body surface area) a "naked" CMA can be calculated for your facilities. Several examples are provided in Table 3. We recommend that the separately billable pharmacy cost be reduced to less than 28% and preferably as low as 21% to 25% of the base rate. This translates into $51 to $63 per treatment. The naked CMA will give you the absolute minimum pay-ment your unit can expect. The addi-tion of CMAs will increase revenue to the center beyond what you have cal-culated. The facility will do well if the "naked bundle" payment is close to the current Medicare payment. Revenue cycle managers should prepare them-selves to track and analyze Medicare revenue and costs separate from other insurers. 7. Other program issues The bundle is the most comprehen-sive change in the Medicare ESRD pro-gram to date. Most organizations will have to adapt and increase efficiency in order to stay in business. All dialysis facilities, big or small, need to transition FacilityA B C D Medicare Rx 558 1284 1936 746 Current MAP $214.03 $236.12 $255.20 $288.27 Area Wage Index 1.289 1.245 1.289 1.289 Naked CMA 1.0594 1.1204 1.0788 1.0966 Naked Bundle $233.80 $243.64 $241.46 $238.27 SB $49.93 $67.35 $85.21 $117.24 SB as % of Naked Bundle 21% 28% 35% 49%Table 3. Four facilities preparing for the bundle: Facility A can expect a base bundled payment of $233.80 based on the naked CMA. SB costs are $49.93 (approximately 21%) of the naked bundle payment, well below the $71.93 allocated for SB costs. Facility A can safely opt 100% into the bundle. Facility D, on the other hand, has $117.24 of SB costs (49% of the naked bundle). Facility D should opt out for now and work on managing SB costs and closely review charts to capture clinical CMAs. Facilities B and C also have a relatively high SB percentage, and should probably opt out, unless clinical CMAs are very high. (MAP= Medicare Allowable Payment) RenalEconomics_16.indd 34 6/17/10 3:12:06 PM
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