Section 446.6 - Definitions and sources of statistics for Medicaid cost allocation

446.6 Definitions and sources of statistics for Medicaid cost allocation.

Statistic Definition or Method of Computation Source

(a) OTHER OPERATING EXPENSES

(1) Assigned Time- Number of hours worked by Education curriculum Nursing enrolled nursing students and work records Education (RN or LPN) by assigned program service area.

(2) Assigned Time- Number of hours worked on Education curriculum Post Grad. Med. premises by interns and residents and work records Ed. (Approved in the approved postgraduate Program) medical education programs by assigned cost center. Outside time is excluded.

(3) Assigned Time- Number of hours worked on Education curriculum Post Grad. Med. premises by interns and residents and work records Ed. (Non- in the non-approved postgraduate Approved Prog.) medical education programs by assigned cost center. Outside time is excluded.

(4) Time spent- Number of hours utilized by social Departmental Social Work workers handling specific patient's records or Time Services needs, by program service area to Study which the patients are assigned. Time spent not related to a specific patient is not to be counted.

(5) Number of The average number of rooms rent- Personnel and rooms Occu- ed to hospital employees, non-paid General pied by Dept. workers and students participating Accounting records Assigned- in education programs carried on by Housing the hospital by department to which the personnel are assigned. Exclude common areas (i.e., recreation room) in the room count. A monthly census as of the last day of every month must be taken and averaged for the year.

(6) Net Square For each cost center for which Blueprints of Feet Maintained- maintenance is provided, allocate the Hospital Plant based upon the total net square plant or actual Maintenance feet of the cost center maintained. measurement if Net square feet is defined as: blueprints are The interior square feet in each not available functional cost center of the hospital measurement of the hospital or a determined by either a physical measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators, and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc., serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 800 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.

(7) Net Square Net square feet by department is Blueprints of Feet-Plant defined as follows: The interior the Hospital Operation, square feet in each functional cost plant or actual Energy, center of the hospital determined measurement if Security, and by either a physical measurement blueprints are not Parking, Plant of the hospital or a measurement available Operation & from blueprints. Floor area Maintenance measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc., serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional al part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 800 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions. (8) Assigned Time- Scheduled housekeeping hours of Housekeeping Housekeeping service to be spent in maintaining Cost Center cleanliness and sanitation of each records functional cost center. Hours to be spent cleaning general and unused areas must be excluded.

(9) Assigned Time- Number of hours worked on prem- Education Other Health ises by health profession student, curriculum and Professional Ed. excluding RN, LV(P)N, intern and work records resident students, by assigned cost centers.

(10) Patient meals Number of patient meals Actual count Served- served shall include only regular maintained by Dietary scheduled meals and exclude Dietary Services Services snacks and fruit juices served cost center between regular scheduled meals.

(11) Adjusted Divide the total annual paid Payroll or F.T.E. Employees- hours (including vacation, sick Personnel Non-Patient leave and overtime) for all those Records Food Service employees for whom the cafeteria is available for use by cost center by 40 hours; divide the result by 52. If employees are paid for unused sick leave, exclude the hours so paid from the calculation. Please round to nearest tenth of an F.T.E. only.

(12) Dry and Clean The weight of linen processed plus Actual count Pounds the equivalent weight of disposable maintained by Distributed- linen substitutes used. Include the Laundry and Laundry and uniforms and linen from Personnel Linen Dept. Linen quarters and employee housing. If linen is not weighed, a conversion from pieces to pounds is allowed. If soiled linen is weighed, divide by 1.1.

(13) Costed requis- Central Services Costed requisi- Copies of cost itions and Cost tions means: Total dollar amount center of Sales- (based on invoice cost) of non- requisitions Central chargeable supplies transferred or other Services and from the central services and documentation Supply supplies cost center to each using cost center. Central Services Cost of Sales means: The invoice cost of all supplies sold to patients and others regardless of the issuing cost center.

(14) Costed Pharmacy costed requisitions Copies of cost Requisitions means: Total dollar amount (based center requi ad Cost of on invoice cost) of nonchargeable sitions or other Sales- pharmaceutical items transferred documentation Pharmacy from the Pharmacy Cost Center to each using cost center Pharmacy Cost of Sales means: The invoice cost of all pharmaceutical items sold to patients and others regardless of issuing cost center.

(15) Accumulated To be generated through computer Not Applicable Cost-General software. Nothing is to be reported. Accounting; Patient Accounting; Admitting and Registration; Hospital Administration; Insurance Malpractice; Insurance Other; Licenses and Taxes; Interest Short-Term

(16) Direct Total direct cost of medical General Accounting cost of and surgical supplies (natural records Supplies classification .40) and non-medical Expensed- and non-surgical supplies Purchasing and (natural classification .50) by cost Stores center, as reclassified, excluding pharmacy (accounts 8470 and 7150), patient dietary service (account 8310), and non-patient food services (account 8320).

(17) Hours of Accumulated hours of service Departmental records Service- to program service centers. or Time Study Medical If this is unavailable, a Records questionnaire time survey may be used.

(18) Percent of Percent of time spent by the Time Study Effort- Chief of Medical Staff in the Medical Staff ancillary or program service areas Administration for which he has responsibility.

(19) Professional Using the calculations made to General Accounting Component by generate the reclassification records Cost Center necessary to create this cost Assigned- center, distribute costs back to the Medical Staff appropriate ancillary or program Services service area from which the physician cost arose (i.e., Radiology, Laboratory, Emergency Room, etc.).

(20) Number of The number of patients discharged Medical Records or Discharges- from the Hospital accumulated by statistical reports Medical Care program service centers, excluding Review routine newborn.

(21) Hours of Actual hours worked of nurses Personnel, Payroll Total Direct for which administration is or Departmental Nursing Service- provided by assigned area. records Nursing Administration (22) Dollars of The depreciation expense related to General Accounting Depreciation/ each building (or wing) distributed records and blue Amortization by through square feet to departments prints of the Cost Center- in that building (or wing) (result- Hospital plant Depreciation & ing statistic reported as a weighted or actual Amortization statistic, dollars of depreciation). measurement of (Fixed Assets). The square feet used to distribute blueprints are Refer to sub- the expense is Net Square Feet by not available division (c) of building (or wing) defined as this section follows: The interior square feet for an example. in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc. serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted' areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.

(23) Dollars of The lease and rental expense General Accounting Lease/Rent by related to each building (or records and blue Cost Center- wing) distributed through square prints of the Leases and feet to departments in that building Hospital plant Rentals (or wing) (resulting statistic or actual (Fixed Assets). reported is a weighted statistic, measurement if Refer to sub- dollars of rentals and leases). blueprints are division (c) of The square feet used to allocate not available this section the expense is Net Square Feet by for an example. building (or wing) defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc., serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 800 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.

(24) Dollars of The cost of depreciation on Plant LedgerDepreci ation by movable equipment must be records Cost Center- allocated to the functional cost Depreciation & center utilizing that equipment. Amortization- Where the cost center of Movable depreciation on movable equipment Equipment. is utilized by two or more Refer to sub- functional cost centers, the division (c) of depreciation mustbe allocated this section between the costcenters based upon for an example. cost center usage. (25) Dollars of The cost of leases/rentals on General Accounting Lease/Rent by movable equipment must be records and Lease/ Cost Center- allocated to the functional cost Rent Agreements Leases and center utilizing the equipment. Rentals- Where the cost of leases/rentals Movable on movable equipment is utilized Equipment. by two or more functional cost Refer to sub- centers, the lease/rent must be division (c) of allocated between the cost centers this section based upon cost center usage. for an example.

(26) F.T.E. Divide the total annual paid hours Payroll or Employees- (including vacation, sick leave Personnel Employee and overtime) for all employees by records Benefits- cost center by 40 hours; divide Non-Payroll- the result by 52. If employees are Related paid for unused sick leave, exclude the hours so paid from the calculation. Please round to nearest tenth of an F.T.E. only.

(27) Dollars of The interest expense related to General Accounting Interest by capital debt will be allocated records and Cost Center- through square feet to departments blue-prints of Interest- in the building (or wing) for which the Hospital Long-term. the debt was incurred (weighted plant or actual Refer to sub- statistic, dollars of interest). measurement if division (c) of The square feet used to allocate blueprints arethis section the expense is Net Square Feet by not available for an example. building (or wing) defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc. serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.

(28) Time Spent-- The number of hours utilized by Departmental Medical Photog- another functional cost center records or raphy and of personnel in the Medical Photog- Time Study Illustration raphy and Illustration cost center.

(b) ANCILLARY SERVICES

(1) Number of Refer to the definition of the Departmental Procedures-- Standard Unit of Measure in records or Labor and section 444.20(a) of this Article. Statistical Delivery Report this statistic by the reports Services required program service areas.

(2) Surgery Refer to the definition of the Departmental Minutes-- Standard Unit of Measure in records or Surgery section 444.20(b)(1) of this Article. Statistical Services Report this statistic by the reports required program service areas.

(3) Recovery Refer to the definition of the Departmental Minutes-- Standard Unit of Measure in records or Recovery section 444.20(b)(2) of this Article. Statistical Services Report this statistic by the reports required program service areas.

(4) Anesthesia Refer to the definition of the Departmental Minutes-- Standard Unit of Measure in records or Anesthesiology section 444.20(b)(3) of this Article. Statistical Report this statistic by the reports required program service areas.

(5) Departmental Report gross charges for the speci- General Gross Charges-- fic department by the required pro- accounting Medical Supplies gram service areas. All-inclusive records Sold; Durable rate hospitals have the option of Medical Equip- using the Standard Units of measure ment--Sold; for the applicable functional Durable Medical cost center reported by the required Equipment-- program service areas in lieu of Leased/Rented; Departmental Gross Charges, if Drugs Sold; charges are not available. Cardiac Catheterization Laboratory; Respiratory Therapy; Speech/Language Pathology Audiology; Psychiatric/ Psychological Services (6) C.A.P Work- Most recent College of American Departmental load--Laboratory Pathologists Workload Measure- records or Services--Clinical; ment Unit Manual. Refer to sub- Statistical Laboratory Ser- divisions (e), (f) and (j) of reports vices--Patholo- section 444.20 of this Article gical; Whole Blood for a further definition of the and Packed Red Standard Unit of Measure. Report Cells; Electro- this statistic by the required cardiology; Pul- program service areas. monary Function Testing

(7) California California Medical Association, 1974 Departmental R.V.U.--Radiology-- California Relative Value Studies. records or Diagnostic; Radio- Refer to the definitions of the Statistical logy--Therapeutic; Standard Units of Measure in section reports Nuclear Medicine; 444.20(h)(1), (h)(3), (h)(4) and (k) Neurology--Diag- of this Article. Report this statistic nostic by the required program service areas.

(8) Number of Pro- Refer to the definition of the Stand- Departmental cedures--C.T. ard Unit of Measure in section 444.20 records or Scanner (h)(2) of this Article. Report this Statistical statistic by the required program reports service areas.

(9) American Physi- Refer to the definition of the Stand- Departmental cal Therapy As- ard Unit of Measure in Section 444.20 records or sociation R.V.U.-- (l)(1) of this Article for Physical Statistical Physical Therapy Therapy (account 7530). Report this reports statistic by the required program service areas.

(10) American Occu- Refer to the definition of the Stand- Departmental pational Therapy ard Unit of Measure in section 444.20 records or Association R.V.U. (l)(2) of this Article for Occupa- Statistical --Occupational tional Therapy (account 7530). Re- reports Therapy port this statistic by the required program service areas.

(11) Assigned Time Number of Hours worked by Recrea- Departmental --Recreational tional Therapists with patients, by records Therapy program service to which patients are assigned.

(12) Number of Refer to the definition of the Stand- Departmental Treatments-- ard Unit of Measure in section 444.20 records or Other Physical (l)(6) of this Article. Report this Statistical Medicine Statistic by the required program reports service area.

(13) Number of Refer to the definition of the Stand- Departmental Treatments-- ard Unit of Measure in section 444.20 records or Renal Dialysis (m) of this Article. Report this Statistical statistic by the required program reports service area.

(14) Provider Spe- If a provider has a specific ancillary Departmental cify--Other service that they feel is not provided records or Ancillary for above, a complete description of Statistical Services that service along with a proposed reports Cost Allocation Statistic should be submitted to OHSM for prior approval (prior means six months before a fiscal year ends).

(c) EXAMPLE

(1) Wherever dollars are required as the Cost Allocation Base, the intent is to accomplish the allocation of the applicable mandatory zero-level account's cost through the direct expensing of that cost. For example, if the direct expense of Interest--Long-Term (account 8880) contains interest related to two long-term financing agreements, one related to the purchase of a C.T. Scanner and one related to a new addition, the method to be used in structuring the statistics--Dollars of Interest--is illustrated in the following paragraphs.

(2) Procedure outline. (i) Allocate interest on the new addition on the basis of Net Square Feet, within the new addition.

(ii) Allocate interest on the C.T. Scanner directly to the C.T. Scanner cost center (account 7340).

(iii) Combine the results of the above producing the statistic Dollars of Interest, as illustrated below.

(3) Calculations.

(1) (2) (1 + 2)

Interest Interest on Statistic

(i) Cost Center on addition C.T. Scanner Reported

Laboratory--

Clinical 15,000 -- 15,000

Pathological 20,000 -- 20,000

Dietary 10,000 -- 10,000

Nuclear Medicine 50,000 -- 50,000

C.T. Scanner 5,000 20,000 25,000

TOTAL 100,000 20,000 120,000

(ii) The interest on the addition is distributed on Net Square Feet in the addition, as follows:

Square Expense

Center Feet Percent Distribution

Laboratory-- Clinical 1,500 15 15,000

Pathological 2,000 20 20,000

1,000 10 10,000

Medicine 5,000 50 50,000

Scanner 500 5 5,000

10,000 100 100,000
 

Doc Status: 
Complete