Blog, Reimbursement, The Hospital Finance Podcast®

Organ Acquisition Principles Webinar [PODCAST]

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In this episode, Cody Bales, BESLER Reimbursement Manager, provides us with a glimpse into the next webinar in our Fundamentals of Reimbursement Series, Organ Acquisition Principles, presented live on Wednesday, June 12th, at 1 PM ET. 

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Highlights of this episode include:

  • Why organ acquisition is important
  • Types of expenses that are considered allowable for cost-based reimbursement
  • How hospitals report organ acquisition costs on the Medicare Cost Report
  • Medicare ratio explained
  • Stem cell transplants

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Cody Bales, BESLER Reimbursement Manager. In this episode, Cody will provide us with a glimpse into the next webinar in our Fundamentals of Reimbursement Series, Organ Acquisition Principles, that we’re presenting live on Wednesday, June 12th, at 1 PM Eastern Time. Welcome back and thank you for joining us, Cody.

Cody Bales: Hey, Kelly, good to be with you today.

Kelly: Awesome. Let’s go ahead and jump in. So why is organ acquisition important in terms of Medicare reimbursement?

Cody: Reporting of organ transplants and acquisition costs is an extremely important area within reimbursement. Hospitals that are certified by CMS’s transplant centers are eligible to receive pass-through reimbursement from Medicare for the cost that the hospital incurs in acquiring organs for transplant. Specifically, hospitals will receive cost-based reimbursement for the Medicare portion of the total organ acquisition costs. This cost-based reimbursement is available for several types of organs: kidney, heart, liver, etc. It’s important to understand that the reimbursement amount that hospitals ultimately receive for these costs in a given year, it’s calculated and paid through the annual Medicare Cost Report, which is to say that the payment for organ costs does not happen through the normal PPS system or the hospital gets their normal payments though hospitals may, of course, get interim payments for acquisition costs throughout the year. So, this is, again, specifically, we’re talking acquisition, so the costs associated with an actual transplant are still going to be reimbursed separately through the PPS system.

Kelly: Thank you for that explanation there. So, what types of expenses are considered allowable for cost-based reimbursement?

Cody: Broadly speaking, any costs that are incurred, which can be attributed to preparing either the potential donor or the transplant recipient for the transplant are going to be considered allowable organ acquisition costs. And more specifically, this would include costs associated with determining whether there is a valid match between the donor and the recipient. So, you’ve got tissue typing and cross-match services performed in labs, evaluations for the donor and the recipient, fees to register the patient for waitlisting. And additionally, you also have the more expensive costs when it comes to excising and preserving organs. And then, of course, if you have any purchased organs, that would be included as well, as well as the cost of transporting organs to and from the facility. And then on top of all of these types of items, you have the actual transplant department or maybe multiple departments within the organization, which houses the dedicated transplant personnel and their related salaries, office expenses, all of that sort of thing. So, the portion of that group, which can be attributed to acquisition or the pre-transplant function, are also going to be considered allowable.

Kelly: Seems very complex. So how do hospitals report organ acquisition costs on the Medicare cost report?

Cody: Worksheet D-4 is the designated worksheet to report organ acquisition services as well as transplant counts. Hospitals should report services, namely days and charges that occur within the facility. And it’s very important to have a handle on which patients this should include. There are basically three groups that we kind of categorize to keep in mind. The first group is for the services provided for the evaluation and maintenance phase of the transplant process. Essentially, all of the services provided in the pre-transplant timeframe leading up to the admission of the patient to the hospital for transplant. These services should be reported on the appropriate lines on Worksheet D-4 and should include services for both the donor and the recipient. Again, since we’re talking pre-transplant, this is all considered acquisition cost. The second group is more specifically for the donor and includes all of the hospital services necessary to obtain the organ from the patient.

So, this would, of course, include operating room, but also charges for the hospital bed and the room, drugs, and supplies. Essentially, everything the hospital provides for that organ donor and their stay at the hospital. The third group is to capture the days and charges associated with excising an organ from a deceased donor, including the services performed to keep the organs viable and usable for an eventual transplant. And those organs are generally sent to the OPO. Now, in addition to the services for these three groups, Worksheet D-4 also provides for the reporting of the direct organ acquisition costs. That would include the transplant department that I touched on earlier, which is the final cost after all reclasses, overhead costs, all that that would be associated with the department and handled elsewhere in the cost report. And then finally, for Worksheet D-4, you have the actual reporting of organ counts used to develop the Medicare ratio.

Kelly: Wow, sounds like you’ve got to have a lot of expertise in this area to get this accomplished successfully. So, tell us more about the Medicare ratio. How is it calculated?

Cody: Yeah, the idea behind the Medicare ratio is to determine Medicare share of the total acquisition costs that will be due to or reimbursable to the hospital from Medicare. So that requires a Medicare to total calculation. Total organs include organs purchased for transplant as well as organs that are excised at the facility, excluding any organs that are deemed not usable for transplant or are just used for research. Medicare organs would include organs that are transplanted into patients where Medicare was the principal payer plus organs that were sent to other facilities for transplant or to an OPO. Now, recently, CMS proposed to modify the count to actually exclude from the formula any organs that are sent to other facilities, which are not subsequently provided to Medicare beneficiaries. So far, those significant and potentially very disruptive changes have not been implemented.

Kelly: Thank you for that. And are there any opportunities or special scenarios that hospitals should be aware of?

Cody: Yes, there are probably several, but just to mention a couple of items. As of January 1, 2021, hospitals can include in the count of organs, those organs that are transplanted for Medicare Advantage patients. At this time, that’s only for kidneys. So that was something of a boost for transplant hospitals. Additionally, there are certain circumstances where you would count the organ as a Medicare organ for the Medicare ratio when the patient has Medicare as a secondary insurance. These situations involve certain calculations that must be performed and a lot of specific criteria that need to be met involving Medicare’s ultimate payment liability in those situations. So, there could be potential there for hospitals not considering transplants where Medicare is the secondary payer.

Kelly: I know there’s a lot to keep in mind there. What about stem cell transplants?

Cody: Great question. The acquisition costs for those types of transplants, as of just recently, are also now eligible for cost-based reimbursement, specifically in the cases where the stem cells come from a donor patient. So, hospitals that are performing stem cell transplants or bone marrow transplants should definitely be going through the necessary steps to get the proper reimbursement. Much of this, again, is similar to what’s required for solid organs as far as doing a proper accounting of the acquisition costs, identifying the pre-transplant functions that are being performed in those dedicated transplant departments within the organization. There are, of course, some differences in the way hospitals are going to calculate and report these costs, which are now reported on the new Worksheet D-6 of the Medicare Cost Report. But really, the concept of the cost-based reimbursement for the acquisition piece should really be very familiar for organizations that are already doing solid organ transplants.

Kelly: So, lots to keep in mind with all of this. Well, we really appreciate you joining us today, Cody, and for sharing this sneak peek into our upcoming webinar, Organ Acquisition Principles, that you’re presenting live on Wednesday, June 12th at 1 PM Eastern Time. And as a bonus, you can earn CPE. Thanks again, Cody.

Cody: Hey, no problem.

Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.


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