UC San Diego Medical Center Center for Transplantation

1. UC San Diego Medical CenterCenter for Transplantation Transplant Charge Hold Project The UCSD Experience November 23, 2009 Alexander Aussi

2. Presentation Objectives • Regulatory Background – Definitions • Importance of the Transplant Cost Report • Project Goals • Symptoms of Flawed Process • Building the Team / Sponsors • Guiding Principles • Project Challenges • System Design – Year I and Beyond • Revenue Improvement and QA

3. Presentation Objectives • Regulatory Background – Definitions

4. Regulatory BackgroundDefinitions • In General, Organ Acquisition Costs are defined as the necessary service costs attributed to the acquisition of an organ for a potential recipient ; this includes preparing the donor (Deceased or Living) and potential recipient for organ transplantation. • Organ Acquisition Costs are normally acquired during Phases I and II of the Universal Transplant Process for potential recipients and in all phases for Living donors. • Organ Acquisition Costs are applicable to Medicare and Non-Medicare patients and their donors

5. Regulatory BackgroundDefinitions

6. Regulatory BackgroundDefinitions Organ Acquisition Costs Include 1-All Tissue typing and Crossmatch services including services furnished by independent labs (provided they are UNOS approved to provide the service) 2- Living Donor and Recipient Evaluations 3- Operating room and other inpatient ancillary services applicable to the donor 4- Other costs associated with excising organs, such as donor routine and special care services

7. Regulatory BackgroundDefinitions Organ Acquisition Costs Include 5-Charges to register the patient with the UNOS registry 6-Preservation and Perfusion costs 7- Surgeon fees to excise theCADAVER organ 8- Transportation of ORGANfrom and to the transplant hospital 9- Costs for organs acquired from other OPOs 10- Cost of services applicable to excisions rendered by residents and interns NOT in approved teaching programs 11- All DIAGNOSTIC Pre-transplant physician professional services, including lab, pathology and X- Ray interpretations

8. Regulatory BackgroundDefinitions Organ Acquisition Costs Include 12-Direct Costs of Transplant Personnel (clinical and administrative) assigned for Pre-Transplant and Outreach activities 13-Other Direct Costs related to “12”: Travel and meeting expenses, professional education, subscriptions, telecommunications, professional dues, equipment maintenance and rental, auto mileage, office rent, office supplies, parking, printing and publications.

9. Regulatory BackgroundDefinitions Organ Acquisition Costs Include 14-Indirect Costs to include: • Building Depreciation & Interest - Housekeeping • Hospital Admin and Finance - Laundry • Data Processing - Plant Operations • Accts Receivables/Collections - Purchasing • Admissions - Telephones • Med Records - Dietary • Nursing Admin - Cafeteria • Personnel Benefits - Central Supply • Equipment Depreciation and Interest - Social Services

10. Regulatory BackgroundDefinitions

11. Regulatory BackgroundDefinitions • CMS Reimburses Certified Transplant Centers at Cost for CMS’s Share of Direct and Indirect expenses thru “Organ Acquisition” • CMS uses a Medicare Ratio to calculate its share • Reconciliates $ yearly with Certified Transplant Hospitals

12. Presentation Objectives • Importance of Transplant Cost Report

13. Why is the Medicare Transplant Cost Report Important? • Medicare Regulation* for Organ Acquisition - CMS Adjusts the Transplant DRG rates to remove organ acquisition costs - Hospital payments are adjusted to compensate for the reasonable expenses of “Organ Acquisition” - Organ Acquisition Expenses include both Live Donor and Cadaveric Organ Acquisitions irrespective of whether the organ was obtained by the hospital or through an OPO. * 42 CFR, Section 412.100 Special Treatment: CTC

14. Why is the Medicare Transplant Cost Report Important? • Optimal reimbursements require optimal reporting of costs • Annual Reconciliation balances Operations Budget (Fixed)

15. Project Goals

16. Project Goals • Improve Organ Acquisition Cost reporting • Improve Pre-Transplant Commercial Collectibles • Compliance with Medicare Rules

17. Building the Team / Sponsors • Guiding Principles • Project Challenges

18. Team / Sponsors • Transplant Program Director (Co-chair) • System Reimbursement Director (Co-chair) • Patient Financial Services (PFS) Director • Medicare Billing Manager • Commercial Billing Manager • Patient Registration/Access Manager • Transplant Financial Coordinators • IT Director for PFS • IT Programmer(s) for PFS system

19. Project Sponsors • CHIEF FINANCIAL OFFICER • ASSOCIATE HOSPITAL ADMINISTRATOR • Hold Team accountable for Implementation of new process Peter Gabriel “The Sledge Hammer”

20. Symptoms of a Flawed Process

21. Symptoms of Flawed Process • Under billing of Commercial Payors for contracted Pre-transplant services • Inflexible “One Size Fits All” Process • Lack of Transplant Program Involvement • Payors shift from Medicare to Commercial • Under-reporting of allowable pre-transplant & donor services • Lack of Organizational Understanding for desired outcomes

22. Symptoms of Flawed Process • Limitations of UCSD system: • Relied on One size fits all Institutional Billing & Registration process • No clear organizational understanding of the overall pre-transplant billing objectives • No ongoing process for review of Pre-Transplant charges assigned to Institutional (Bulk) accounts • Some Pre-Transplant Medicare charges were being billed • Pre-Transplant Commercial charges could not be billed to payor (either billed or claimed)

23. Guiding Principles • Transplant Program is the driver • To create a Flexible System which works for all payors • To create an effective system that works for all points of patient access • To allow the Medical Group to bill related charges appropriately • To allow Finance to obtain clean and meaningful information for allocation on the cost report

24. Project Challenges • Lack of understanding of desired outcomes • Complicated process requiring Multidisciplinary Team oversight • Lack of commitment • Lack of organizational support • “We’ve Always Done It This Way “ attitude

25. System Design – Year I and Beyond

26. System Design – Year I & Beyond • Proposed New System Mechanics: • New Pre-transplant registration process initiated and controlled by the transplant program for all new referrals • Transplant Bill-Hold Functionality based on the assignment of a Transplant Flag and a Payor Code used only by the UCSD Transplant program

27. System Design – Year I & Beyond • TRANSPLANT FLAG • All Transplant Program patients assigned permanent Flag by the Transplant Financial Coordinators at time of referral (Pre-Registration) • Flag enables Transplant Programs and Clinical Personnel to identify our Program patients from Referral to Long-Term post-transplant follow-up • Transplant Flag resides in the patients’ Medical Record which interfaces with the Registration System for Hospital and Medical Group

28. System Design – Year I & Beyond • TRANSPLANT PAYOR CODES (E92 – E01&E02) • All Transplant Program patients assigned the Pre-Transplant Payor code E92* by the Transplant Financial Coordinator at time of Initial Referral • Pre-Transplant Payor code copies to recurring Registrations • At time of admission for Transplant, our Transplant Financial Coordinator posts Payor code E01 on the inpatient account, and closes any open Outpatient Registrations • The Transplant Financial Coordinator initiates a post-transplant Pre-Registration account with Payor code E02 • The Post-Transplant Payor code E02 copies to recurring Registrations • E92* is always assigned to 2nd, 3rd or 4th position after Medicare, Medicaid and Insurance

29. System Design – Year I & Beyond • TRANSPLANT BILL HOLD FUNCTIONALITY • All E92 Pre-Transplant accounts with Medicare FFS are held daily in the Bill Hold Charge File • Medicare Pre-Transplant FFS charges are reviewed daily. They are either assigned to pre-transplant Bulk accounts or released to Medicare for payment • Commercial Pre-transplant charges are billed to payors and subsequently evaluated for claiming on the cost report

30. System Design – Year I & Beyond • Feb 06 – Nov 07Feb 07 – Nov 07 • Transplant Program Project Team/System • Redesigned Service Delivery - Transplant Flag Created • Revised Job Descriptions - Payor Codes (Pre/Post) • Resources to manage Access - Flag and codes roll forward • Transplant Office handles all - Reports Operational • new patient Registrations - Transplant Bill Hold System • - Ongoing Senior Mngt Education • Analyzed need to have dedicated • FTE(s)

31. System Design – Year I & Beyond DEDICATED PROJECT RESOURCE • 1.0 FTE with Clinical Background • Trained on Hospital PFS system, IDX and Registration Screens • Educated on Transplant Flow and Universal Phases of Transplant • Located in the Transplant Department to facilitate communication with Transplant Teams – All organs

32. System Design – Year I & Beyond 1.0 FTE Admin Nurse II Annual Salary $69,500 Benefits @ 25% 17,400 Total Annual Direct Cost $86,900 Aggregate Medicare ratio of 70% Medicare Pre-Transplant Reimbursement* $62,500 Net Cost of New FTE $24,400 *Medicare Reimbursement includes direct cost + $15,000 of allocated indirect costs multiplied by the average Medicare transplant ratio

33. System Design – Year I & Beyond Transplant Bill Hold Coordinator (Dec 23, 2007 – 8:00pm) - Daily Medicare review of Flagged E92 Outpatient accounts for reclassification to BULK (Cost Report) or release for payment - Quarterly review of Flagged Commercial payer accounts with Pre-transplant E92 Payor codes

34. System Design – Year I & Beyond

35. System Design – Year I & Beyond

36. System Design – Year I & Beyond

37. $78,000 System Design – Year I & Beyond Monthly Pre Transplant - Medicare Bulk Account Charges (Dec- Mar 08 partial)

38. System Design – Year I & Beyond Monthly Pre-Transplant Commercial Charges (Dec- Mar 08 partial)

39. Revenue Improvement and QA

40. REVENUE IMPROVEMENT CY 2008 All Payor Pre-Transplant Charges $ 11,495,000 Medicare Pre-Transplant Charges $ 3,660,000 New Medicare Pre-Transplant Reimbursement$ 1,931,000 Less: Medicare Existing APC Reimbursement($ 786,000) Incremental Medicare Reimbursement$ 1,145,000

41. REVENUE IMPROVEMENT BUT WAIT - Our Story Does Not End Here!

42. System Re Design – Year II NOV 2008 – Challenges Associated with the Introduction of Encounter Based Billing • Decentralized Outpatient Registration Process • Flag remains but Transplant Payor codes Overwritten • Charge Hold System unable to capture non-coded accounts • Pre-Transplant charges dropped considerably • Transplant Program recognized drop immediately due to concurrent review • By Feb 2009, Looking for a Fix!

43. System Re Design – Year II MAR 2009 – Charge Hold System Redesign • Moved the Logic of charge capture from Flag and Payor code to Flag and MRN# • MRN#s supplied daily by the Transplant Program for the Program to work via File Transfer Protocol (.ftp) • MRN Charge Holds do not differentiate between Medicare and non-Medicare charges • 11 fold increase in number of charges to be reviewed for applicability to bulk accounts or to be released for payment • Seen as the Ultimate Fix for Charge Capture / Clean reports for application on the cost report

44. System Re Design – Year II Charge Hold Coordinator Workload CY08 - August

45. System Re Design – Year II Charge Hold Coordinator Workload CY09 - August

46. System Re Design – Year II Charge Hold Coordinator Workload

47. SUMMARY • - The UCSD Charge Hold System improved Organ Acquisition Cost Reporting by providing concurrent daily review of charges submitted • The UCSD Charge Hold System improved Pre-Transplant Commercial Collectibles, and most importantly • Ensured compliance with Medicare rules and a Net incremental Medicare reimbursement of $1,145,000 on the cost report for CY 2008

48. Thank You aaussi@ucsd.edu (619) 574-8612