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Analysis of Maryland Hospital Revenue Impact: Observation Cases & Excess Charges FY13

This report examines the potential revenue impact on Maryland hospitals due to observation cases surpassing 48 hours and excess charges for the twelve months ended March 2013, with insights on payer distribution and the shift in rate structures. Key financial implications are detailed. See attached for hospital-specific impacts.

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Analysis of Maryland Hospital Revenue Impact: Observation Cases & Excess Charges FY13

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  1. IPPS Final Rule Federal FY14 2 Midnight Rule Potential Impact on Revenue

  2. Observation Cases by Hospital • 6.4% of Observation cases have LOS > 48 Hours 12 Months ended March 2013

  3. Observation Cases by Payor

  4. Excess > 48 Hours Observation Charges 12 Months ended March 2013

  5. Excess Observation Charges

  6. Maryland Revenue Implications • Overall there is minimal revenue impact to the system • All Payers Medicare • IP ODS to OBV $35,185,521 $13,723,941 • OBV to IP $(28,834,429) $(12,201,621) • Net Impact $6,351,902 $ 1,522,321 • The Observation Hourly Rate and Rate realignment shifts are driving this impact • See Attached for Hospital Specific Impacts For the twelve months ended March 2013

  7. Maryland Revenue Implications • IP ODS cases that should convert to Observation For the twelve months ended March 2013 Stay as IP ODS If these cases stay IP, Hospital is at risk for denials and RAC review

  8. Maryland Revenue Implications • OBV Cases that become IP (assumed OBV LOS 36+ hours) For the twelve months ended March 2013 Will Other Payers adopt the same policy? These cases admitted to IP on Day 2 and bill OBV hours from day 1 and IP Day from Day 2 on Part A Bill

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