Chapter 5 - MSDRG Calculations_Class Activity AS

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East Carolina University *

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3020

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Finance

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Apr 3, 2024

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docx

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HSMA 3020 Chapter 5 – MS-DRG Calculations Class Activity For this exercise, use the file titled Chapter 5 – MSDRG Calculations.xlsx , tabs MS-DRG Calculation Example and MS-DRG Calculations. This assignment consists of 10 inpatient acute care admissions; five for Community Hospital and five 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? The cost-to-charge ratio (CCR) has the biggest impact on estimating profit/loss for an admission because it determines how much it costs the facility to treat a specific encounter. That is then deducted from the MS-DRG reimbursement to determine whether the admission was a profit or a loss. What is the definition of a CC/MCC? How does the presence of a CC/MCC code impact the reimbursement for an admission? A CC is defined as any diagnosis that would be listed as the reason for admission. An MCC would be any CC that increases the length of stay or increases the severity of the diagnosis. The CC/MCC code can impact the reimbursement for an admission in a few ways. One is that the CC/MCC can increase the severity of the admission, which would increase the reimbursement rate. The presence of an MCC could result in additional time being admitted or result in death, which could have an impact on the reimbursement rate. Why do surgical cases tend to have a higher relative weight (RW), and in turn payment, than medical cases? Surgical cases have higher costs because they tend to require more resources, including staff and supplies. What can Memorial Hospital do to improve their profit? They could reduce their base rates. The best they could do is find a way to lower their CCR. They could also try to reduce
labor-related costs and perform more procedures and surgeries.
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