Applied Sciences Healthcare Homework

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DRGCALCULATIONS.docx

1. MS-DRG Calculations (Level 4—Analyzing)

For this exercise, use the file titled  AB202019_Ch05_Exercises.xlsx  Download AB202019_Ch05_Exercises.xlsx, tabs MS-DRG Calculation Example and MS-DRG Calculations. This assignment consists of 10 inpatient acute care admissions: 5 for Community Hospital and 5 for Memorial Hospital. Calculate the MS-DRG reimbursement rate for each admission. Notice the fully adjusted base rate, charges, and cost-to-charge ratio are different for each facility. Remember that the fully adjusted base rate already includes adjustments for IME, DSH, and wage index. Once you have completed the calculations, answer the following questions.

 

Question

Answer

Which figure has the biggest impact in determining profit/loss for an admission; base rate or cost-to-charge ratio (CCR)? Why?

 

What is the definition of a CC/MCC? How does the presence of a CC/MCC code impact the reimbursement for an admission

 

Why do surgical cases tend to have a higher relative weight (RW), and in turn payment, than medical cases?

 

What can Memorial Hospital do to improve their profit?

CopyofAB202019_Ch05_Exercises.xlsx

MS-DRG Calculation Example

Basic MS-DRG Calculations
Hospital Happy Hopsital Base Rate $6,200
MS-DRG 387 Inflammatory bowel disease w/o CC/MCC
RW 0.7007
Charges $ 9,456.82
CCR 0.429
LOS 3
MS-DRG Reimbursment $ 4,344.34 Multiply the fully adjusted hospital specific base rate × the MS-DRG Relative Weight (RW)
Cost of the encounter $ 4,056.98 Multiply the charges × the cost to charge ration (CCR)
Profit/Loss $ 287.36 Subtract the cost of the encounter from the MS-DRG Reimbursement

Example: This example shows how to calculate the MS-DRG reimbursment rate for an acute care inpatient admission. The hospital specific base rate we are using for this example includes adjustments for IME, DSH and wage index.

MS-DRG Calculations

Basic MS-DRG Calculations
Hospital Community Hopsital Base Rate $6,200 Hospital Memorial Hospital Base Rate $7,300
MS-DRG 192 Chronic obstructive pulmonary disease w/o CC/MCC MS-DRG 192 Chronic obstructive pulmonary disease w/o CC/MCC
RW 0.7092 RW 0.7092
Charges $ 15,000.00 Charges $17,500.00
CCR 0.429 CCR 0.531
LOS 3 LOS 4
MS-DRG Reimbursment MS-DRG Reimbursment
Cost of the encounter Cost of the encounter
Profit/Loss Profit/Loss
Hospital Community Hopsital Base Rate $6,200 Hospital Memorial Hospital Base Rate $7,300
MS-DRG 190 Chronic obstructive pulmonary disease w MCC MS-DRG 190 Chronic obstructive pulmonary disease w MCC
RW 1.144 RW 1.144
Charges $ 14,975.24 Charges $16,578.24
CCR 0.429 CCR 0.531
LOS 4 LOS 5
MS-DRG Reimbursment MS-DRG Reimbursment
Cost of the encounter Cost of the encounter
Profit/Loss Profit/Loss
Hospital Community Hopsital Base Rate $6,200 Hospital Memorial Hospital Base Rate $7,300
MS-DRG 473 Cervical spinal fusion w/o CC/MCC MS-DRG 473 Cervical spinal fusion w/o CC/MCC
RW 2.5124 RW 2.5124
Charges $ 30,245.87 Charges $31,674.10
CCR 0.429 CCR 0.531
LOS 2 LOS 2
MS-DRG Reimbursment MS-DRG Reimbursment
Cost of the encounter Cost of the encounter
Profit/Loss Profit/Loss
Hospital Community Hopsital Base Rate $6,200 Hospital Memorial Hospital Base Rate $7,300
MS-DRG 472 Cervical spinal fusion w CC MS-DRG 472 Cervical spinal fusion w CC
RW 3.0415 RW 3.0415
Charges $ 30,384.64 Charges $35,384.57
CCR 0.429 CCR 0.531
LOS 3 LOS 3
MS-DRG Reimbursment MS-DRG Reimbursment
Cost of the encounter Cost of the encounter
Profit/Loss Profit/Loss
Hospital Community Hopsital Base Rate $6,200 Hospital Memorial Hospital Base Rate $7,300
MS-DRG 001 Heart transplant or implant of heart assist system w/MCC MS-DRG 001 Heart transplant or implant of heart assist system w/MCC
RW 27.6339 RW 27.6339
Charges $ 315,258.74 Charges $330,879.54
CCR 0.429 CCR 0.531
LOS 35 LOS 38
MS-DRG Reimbursment MS-DRG Reimbursment
Cost of the encounter Cost of the encounter
Profit/Loss Profit/Loss

Instructions: Calculate the MS-DRG reimbursment rate for each case. Notice the changes in base rate for each facility. Remember the hospital specific base rate includes adjustments for IME, DSH and wage index. Once you have completed the calculations, answer the questions in the Student Workbook.