In this episode, we’re pleased to welcome back Cody Bales, Senior Reimbursement Consultant at BESLER to give a glimpse into the next webinar in BESLER’s Reimbursement Best Practices Series on Occupational Mix, live on Wednesday, March 29th at 1 PM ET.
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Highlights of this episode include:
- The purpose of the occupational mix survey
- When must the survey be completed?
- What data should hospitals be obtaining to complete the survey
- The potential impact of the occupational mix factor
- Pitfalls to watch out for
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Cody Bales, senior reimbursement consultant here at BESLER. In this episode, we’re going to give you a glimpse into the next webinar in BESLER’s Reimbursement Best Practices Series on occupational mix that Cody is hosting live on Wednesday, March 29th at 1:00 PM Eastern Time. Thank you for joining us today, Cody.
Cody Bales: Good to be here with you, Kelly. Thanks.
Kelly: Awesome. Well, let’s jump in today. So, what is the purpose of the occupational mix survey?
Cody: Well, the central purpose or the implicit purpose is to use hospital data to implement and adjustment to the hospital’s wage index data with the intention of controlling for the effect of a hospital’s employment choices, aka, the mix of staffing deployed by the hospital or more specifically the mix of different nursing levels employed. So, if you think back to how Medicare wage index works, there is already an adjustment to the payments hospitals receive from Medicare that is predicated on the cost of labor where the hospital is located. So, the occupational mix or occ mix as it’s often shortened to in the industry, comes in as an additional adjustment to say, “Yes, your cost of labor is X, but we’re going to take a look at your blend of staffing and make this additional adjustment.” And I believe at one point part of the intention was to level out the playing field between rural and urban hospitals, but in practice, the results have been mixed or even to the detriment of rural hospitals.
Kelly: Okay. And when must the survey be completed?
Cody: So, the survey is only required to be completed once every three years. That’s the cycle. The last survey was for calendar year 2019. So we actually have an important year ahead of us as the calendar year 2022 survey is next in line. So just last week, we finally received official word from CMS on the deadline, the survey is going to be due July 1st of this year, 2023. So providers will want to circle that data on the calendar and definitely get going with the preparation if they haven’t already. The survey again is for calendar year 2022 data, regardless of what the hospital’s specific fiscal year end is. And I don’t think I mentioned this yet, but this survey is only required for IPPS hospitals. So, no critical access, low utilization, etc.
Kelly: That’s good information. Sounds like it’s going to be a busy year. And what data should hospitals be obtaining to complete the survey?
Cody: The main data that facilities should be preparing is payroll records for the entire hospital for calendar year 2022. The rules specify that this should include pay periods ending between January 1 and December 31 of last year. So, the data should include hospital departments, earn codes, job codes, and descriptions, and of course, dollars and hours. And the other large dataset that facilities will need to obtain is a listing of contracted labor utilized throughout the year. But to go back to the payroll records for a second. This will give you the necessary raw data. That’s kind of the easy part. But then the next step is to map departments from the report with their Medicare cost report counterparts, and of course, to review the job codes or job titles that are included with the goal being to categorize each employee into the proper bucket that the occ mix survey calls for. So, most of the work at this juncture will involve matching your nursing staff with the nursing categories specified on the survey, which are RNs, LPNs and Surg Techs, Nursing Assistants and Orderlies, and lastly, Medical Assistants. So, the determination for which nurse goes where is based on the occupational definitions maintained by the U.S. Bureau of Labor Statistics or the BLS?
Kelly: That’s very helpful. Thank you. And what if the job titles maintained by the hospital don’t match up with the BLS classifications?
Cody: Right. Typically, hospitals will utilize a wide range of job codes and job titles, and in some cases that probably will not be clear which nursing bucket they should fall into or if they should at all. So the hospital reimbursement people will really need to work directly with the nursing administration personnel, the Chief of Nursing and all the personnel that would roll up under that person, to really look at the definitions, look at the staff, and make the proper determinations. So the input and knowledge that comes from the nursing admin team is going to be critical for that task.
Kelly: Great. And what is the potential impact of the occupational mix factor?
Cody: The potential impact is really enormous. I think some people don’t grasp just how much of an impact the occ mix factor can have on Medicare reimbursement, maybe because the survey itself is relatively basic. And if you look at the PDF version, it’s just one page. It’s really just a handful of numbers. And also just because it’s literally called a survey, which implies that it’s optional or just not all that important and that couldn’t be further from the truth. Depending on how much the hospital differs from the national average, the adjustment to the hospital’s wage index can be significantly positive or negative. You have to think back to how seemingly minimal in up or down change to the wage index value can result in millions or tens of millions in Medicare reimbursement. And remember that since the survey is only– the occ mix survey is only completed every three years, the effect on wage index is going to remain in place for three years before there’s another refresh. And again, due to how the formula works and individual hospitals occ mix data is going to impact not only their own facility, but also the CBSA broadly.
Kelly: Wow, that sounds very significant. Are there any pitfalls to watch out for in completing the survey?
Cody: Yes, there are a few items to keep an eye on. I touched on it earlier, but one would definitely be to make sure that the contract labor portion is being accounted for. This is required for both the nursing and the non-nursing staff. And for the non-nursing staff, it can really be a big lift to get the necessary data and to properly report it on the occ mix survey, so. I think the pitfall there is not only to make sure that that’s accounted for but to kind of get going with it early so that you give yourself time to do the work. And another big one is to make sure that the RN group is being properly reviewed. Just because a nurse is an RN doesn’t mean that they necessarily go straight into that column on the survey. If they function entirely in an administrative role, then they’ll need to be reported as All Other, rather than Nursing through the survey. And in another scenario, if they have RN as their job title, but they are specialized as an APRN or a Nurse Anesthetist, and they do Part B billing, then their wages and hours need to be excluded. And the last one I’ll mention is that if the facility has any excluded type units, which would include its psych or rehab units, any non reimbursables, etc., then it’s important to properly calculate the overhead portion applicable to those areas, and then make sure that piece gets excluded from the survey. It’s not entirely obvious just from the survey itself that this step needs performed and so sometimes it just gets missed, I think.
Kelly: That’s good advice. Thank you. And thank you so much for joining us today, Cody, and for sharing some of this information that people can expect to get in our upcoming webinar as part of our Reimbursement Best Practices Series on Occupational Mix that we’re hosting on March 29th at 1:00 PM Eastern. Thanks again, Cody.
Cody: Thanks, Kelly. Have a great day.
Kelly: Thank you. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
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