3/21/2016
Physician Availability:
Emergency Room
Physician Costs
John Waltko, VP, Regulatory and Financial Reporting,
Quorum Health Resources
Greg Morter, MD, CMO, veEDIS Clinical Systems, LLC
Amy Crawford, EVP, veEDIS Clinical Systems, LLC
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Creating a Sustainable Future for Healthcare Organizations
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Today’s Presenter
John Waltko
Vice President, Regulatory & Financial Reporting
As Vice President of Regulatory and Financial Reporting, Mr. Waltko is a
senior level consultant with over 30 years in the healthcare industry. Prior
to joining Quorum in 1994, John was a Manager with a Big 4 CPA firm in
healthcare consulting practice. John entered health care industry in 1984
with a large fiscal intermediary as a Senior Auditor in provider
reimbursement and audit. John is a Certified Public Accountant.
Mr. Waltko specializes in Medicare and Medicaid program payment issues,
underlying Medicare and Medicaid program regulations, monitoring of
developing federal public policies and estimating payment impacts and
operating challenges such policies have on health care providers.
His experience includes a variety of financial areas such as budgeting, rate
setting, financial forecasting, mergers and acquisitions due diligence,
financial and operational auditing and hospital turnaround engagements
with focus on Medicare and Medicaid reimbursement and payment issues.
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Today’s Presenters
Greg Morter, MD
Chief Medical Officer, veEDIS Clinical Systems, LLC
After 20 years in pediatric practice, Dr. Morter made the change to the
technology side of healthcare, initially as a physician-EMR trainer in 2007.
Working side-by-side with physicians as they incorporated new electronic
documentation systems into their workflow, he was a key ingredient in hundreds
of successful “go-live” events. Subsequently, Dr. Morter amassed deep
experience in the areas of emergency medicine, as well as product design and
development, quality assurance, and report analysis.
In his role as veEDIS Chief Medical Officer, Greg works with a team of clinicians
and developers along with the customer base to ensure product design and
workflow are aligned with clinical best practices. Dr. Morter continues to provide
vision, direction, and support to the evolving suite of veEDIS technology
solutions, including the core Emergency Department EHR application as well as
veEDIS CareTRAK™, an unparalleled decision support and communication tool.
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Today’s Presenters
Amy Crawford
Executive Vice President, veEDIS Clinical Systems, LLC
In her role as Executive Vice President, Amy oversees all aspects of the
veEDIS organization, including operations, business development, strategic
partnerships, and administration. She has over 20 years of industry-specific
experience, focusing on the optimization of financial return, operational
resources, and human capital. Amy excels at providing a wide breadth of
hands-on management solutions. She has a deep understanding of how
existing and emerging technologies are crucial tools that enable an
organization to meet its financial and operational goals.
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Welcome and
Introductions
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Emergency Room Physician Costs:
Cost Reporting and Reimbursement
Todays Topics:
Physician
Compensation
and Cost Reports
Emergency Room
Physician Staffing
Costs
• Emergency Room
Physician Availability
Costs
• Patient Care Services
Time Reporting
Requirements
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Medicare Cost Reimbursement Apportionment Formula
Emergency Room Dept. Costs
1,500,000
ER Department Charges
2,000,000
Cost To Charge Ratio
Medicare Patient Charges
Medicare Cost
Reimbursement
75%
400,000
$280,000
Includes direct costs plus hospital general
service costs allocated to ER. Excludes prof.
fees to physicians
Includes only hospitals billed charges in ER:
Excludes Prof Charges
Medicare ER Charges Only
Some ER Physician Costs can be claimed as allowable costs: Availability Costs
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General Rule:
Payments to Physicians Are Not Allowable Costs on the Cost Report
• Physicians bill separately for patient care under the
Medicare physician fee schedules
 Physicians “employed” or under contract assign billing rights to
hospital
• Reporting payments to physicians as allowable cost on
cost report would effectively create as second payment
amount over the physician fee schedule payment
 Payments to mid-level practitioners and CRNAs are also non-
allowable type costs for same reasons
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General Rule:
Payments to Physicians Are Not Allowable Costs on the Cost Report
Exceptions to general rule
Physician works
Physician is CEO in Rural Health
or other hospital Clinic
Payments to
Medical
employee, NOT • Common for RHC
physicians for
doctors to work in
performing
directorship fees
resident training
multiple sites
professional
• Only time/costs in
services
RHC is cost
reimbursed
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Certain
emergency room
staffing
arrangements
• Today’s topic
• Rules and
documentation
requirements
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General Rule:
Payments to Physicians Are Not Allowable Costs on the Cost Report
• Cost reporting nuance

Physician practices without “provider-based” designation

Payments to physicians and mid-level practitioner NOT removed via
Cost Report Worksheet A-8 adjustment
o
See PRM-II Section 4013
o
CMS requirement to accomplish full allocation of hospital general service
costs to NRCC
o
Due to physician compensation amounts material decrease in cost
reimbursement results
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Physician Compensation: Worksheet A-8-2
Reasonable
compensation
equivalents
• Published in the
Federal Register
• Refer to 62 FR
24483, May 5, 1997
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Reasonable
compensation
equivalents
(RCE)
DO NOT apply
to CAHs!
However, RCEs
are accepted as
reasonable
compensations
under STARK
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Reporting Physician Compensation on the Cost Report
Cost Report Worksheet A-8-2
Purpose
•Report payments to physicians
•Allowable and non-allowable
Process
•Identify all payments to physicians
•Report physician payment on A-82 by cost center
•Report memberships/malpractice
•Report: Physician Remuneration
by:
• Remuneration for professional
services to patients
• Remuneration for services to
hospital, technical
•Compiling accurate and MAC
accepted time studies or other
documentation during the year
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Reporting Physician Compensation on the Cost Report Cost Report WS A-8-2:
Example
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Reporting Physician Compensation on the Cost Report Cost Report WS A-8-2:
Emergency Room Staffing
WSA Ln #
Column Description
1
Wkst A Line #
91
Cost Center where costs reported and
adjustment will be made to on WS A
2
Cost Center/Physician Id.
ER
Single Physician or multiple physicians
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Total Remuneration
1,507,718
Total salary, contract payments to physicians
staffing ER
4
Professional Component
1,507,718
Amount of compensation applicable to Direct
Patient Care Services
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Provider Component
0
Availability time / costs: Ouch!!!!
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Adjustment
1,507,718
ER Physician Payments, costs, removed from
allowable costs on WS A
Hospital not claiming “Provider Component” causing 100% disallowance of ER Physician Staffing Costs
Assuming 30% is ER Availability and 30% Medicare & Medicaid utilization, approximately $150,000 reimbursement loss
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Emergency Room Physician Costs: An Exception to General Rule
• Some costs applicable to physicians staffing Rural Hospital ERs
can be claimed as allowable cost on the Medicare Cost Report
Medicare Conditions of Participation and State Hospital Licensing
requires hospitals to maintain and staff an Emergency Room(ER)
 ER MUST be open 24 hours a day, 7 days a week
 Hospitals in rural areas have very low volumes
 ER physician fee schedule reimbursements not adequate to fund/pay
ER physicians
 For above reasons, Congress enacted legislation to allow
reimbursement of ER Physician “availability” time and associated
costs

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Emergency Room Physician Availability Time Defined
• The physical presence of a physician in a hospital under a formal
arrangement with the hospital to render emergency treatment to
individual patients as and when needed
• In typical Rural Hospital ER, physician is not treating patients 100% of the
time they are in the ER
Time and associated costs when ER Physician is NOT seeing patients is availability
time
 Costs associated with availability time is allowable costs on the Medicare costs
report

• Regulatory guidance:
Provider Reimbursement Manual Part I Section 2109
 Chapter 42, Code of Federal Regulations Section 4xx.xxxx

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Emergency Room Physician Availability Costs
PRM Section 2109 Requirements
• Qualifications of physicians
• Alternative ways of staffing ER explored
 Ads placed in professional publications
 Requests for proposals from ER Staffing Companies
• Immediate response
 Physician must be on-site and not “on-call”
• Written contract between hospital and physician
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Emergency Room Physician Availability Costs
PRM Section 2109 Requirements
• Documentation required
 Written contract between hospital and ER doctors
o Allocation agreement within contract
–
Professional vs. provider component estimate
–
See PRM Section __ for other standard “contract requirements”
 A record of payments made under the contract
 A permanent record of all patients treated by the physician
 Copies of all physician bills
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Emergency Room Physician Availability Costs
PRM Section 2109 Requirements
• Documentation Requirements
 Time records/time studies, supporting:
o Time on premises and not treating patients
o Time treating patients, diagnosis, ordering tests, completing patient chart
etc.
o Other time: Administration
 PRM Section 2109 cross references
PRM 2313.3, Periodic Time
Studies for Cost Reporting
o Detailed time studies are a tricky issue
o MAC dependent!
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Emergency Room Physician Availability Costs
PRM Section 2313.2: Periodic Time Studies
• MAC approval
Request submitted 90 days prior to cost report YE
 MAC has 60 days to respond

• One week per month
• Full Week

Correspond week with staffing
• All weeks in month over course of year
• No 2 consecutive months can use same week
• Time Study contemporaneous with costs be allocated

Cannot you current time study for prior years cost report
• Provider-specific
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Emergency Room Physician Availability Costs Example

This is one method that is accepted by some MACs
It may not be accepted by your MAC
Step 1: Calculate hours of ER contract coverage
Hours of coverage, per day
Annual days of coverage, per contract
Number of physicians provided
Total hours of coverage, per year
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365
1
8,760 (A)
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Emergency Room Physician Availability Costs Example

Step 2: Calculate Part B Physician Time
Type of Service
Year-to-Date ER
Visits
Brief Exam
Estimated
Physician Time
per ER Visit Minutes
Total Physician
Time - Minutes
Total Physician
Time - Hours
269
5
1,345
22.42
Limited Exam
6,445
15
96,675
1,611.25
Intermediate Exam
1,062
30
31,860
531
Extended Exam
157
60
9,420
157
Other Visits
165
60
9,900
165
149,200
2,487 (B)
7,933
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Emergency Room Physician Availability Costs Example

Step 3: Calculate ER Physician Availability Time & Cost
Hours
Percentage
Contract Cost
Total ER Physician
Coverage
8,760 (A)
100%
$606,002
Part B Physician Time
2,487 (B)
28.39%
172,046
ER Physician Availability
6,273 (C)
71.61%
$433,956 (D)
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Emergency Room Physician Availability Costs Example

Step 4: Compare Availability Costs to RCE Limits
Availability Hours
6,273 (C)
Work Year Hours
2,080
FTEs Availability Service
3.02
RCE Total, Non-Metropolitan
88,600
RCE Base
267,572 (E)
Allowable ER Physician Availability Costs
$267,572
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Emergency Room Physician On-Call Arrangements
Critical Access Hospitals ONLY
ER "On-call" physician costs
allowable IF:
Alternative ER staffing option
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• Physician not on-call at another
facility
• Physician must NOT be present at
facility
• Not providing services otherwise
• Effective with Cost Reports
beginning on/after 10/01/01
Applies to mid-levels also!!
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Emergency Room Physician:
Minimizing Costs of ER Physician Staffing
Summary:
ER staffing with physicians or Minimize costs
Improve cost
mid-levels
• Staff with local physicians whenever reimbursements with
possible
accurate availability time
• Required under CAH Conditions of
• Cross-utilize physicians in hospitalParticipation
studies
• Money loser: Professional fees rarely
exceed payments to the physicians
• ER have high uninsured patient load
owned physician practices and RHCs
• Seeing patients in ER is not a bad
thing in rural America when ER is
under utilized
• Adjust hours of clinics??
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Physician Availability
Tracking
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Traditional Time Records
• Until now, facilities spent countless hours doing manual
calculations by hand and kept data from paper logs. This
was:
 Labor intensive
 Error prone
 Problematic and inefficient for record retention
• Report only available once calculation completed, then:
 Obsolete one day later
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Time Records Simplified
Time records can now be
handled quickly and
easily with the veEDIS
Physician Availability
Tracker (PAT)
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veEDIS PAT automates
the reporting of
required time records,
removing one of the
most challenging
aspects to physician
availability
reimbursement
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veEDIS PAT
• CFO or controller can run the report at any time
 Reports include time study data required for cost report
 Data in tabular and graphic formats
 Web based tool – reports run from any web browser
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veEDIS PAT
Maximizes deserved
reimbursement
• Standardizes process and
calculation
• Reduces potential for error
Eliminate large
amounts of manual
labor
Puts your ED staff back
to doing what you
hired them to do:
deliver patient care!
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Summary
• Reimbursement for physician availability can provide
significant financial benefit to your facility
• The veEDIS Physician Availability Tracker (PAT) removes
the greatest challenge to receiving these funds
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Contact Us
For regulatory or financial question about
physician availability or interest in other
hospital consultative services
Quorum Health Resources
615-371-7979
For interest in letting veEDIS PAT automate
the reporting of physician availability for
you or questions about time studies
veEDIS Clinical Services
954-344-0498
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For More
Information
Contact:
[email protected]
(800) 233-1470, ext. 4513
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Creating a Sustainable Future for Healthcare Organizations
Intended for internal guidance only, and
not as recommendations for specific
situations. Readers should consult a
qualified attorney for specific legal
guidance.
Creating a Sustainable Future for Healthcare Organizations
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