1. Robert Howey MBA, MHA, CPA Director, Toyon Associates
Advanced Topics in Medicare Cost Reporting: Reimbursement for Organ Acquisition
Robert Howey
MBA, MHA, CPA
Director, Toyon Associates
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2. Objective After the session, you will be able to:
Better understand three advanced areas related to organ acquisition reimbursement for Medicare
Use this information to evaluate the reporting at your transplant center
Also as it relates to the TFC role

3. Agenda Kidney Paired Donations Medicare Secondary Payer Organs
Counting Medicare Organs

4. Kidney Paired Donations

5. Kidney Paired Donations
Hospital A DA
Only applicable to external swaps RA

6. Kidney Paired Donations
Hospital A
Hospital B DA DB
Only applicable to external swaps RA RB

7. Kidney Paired Donations
Incremental kidney acquisition costs to receiving transplant center:
Packaging
Transportation (Note: travel costs of the donor are not allowable for kidney acquisition)
Additional tests requested post match
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3106

8. Kidney Paired Donations
Responsibilities of donating transplant center:
Include donor I/P nephrectomy charges on W/S D-4 Part I
Reduce hospital I/P donor nephrectomy charges to cost (use latest published CCR in Impact File on CMS website)
Bill recipient CTC the calculated cost from step 2
Increase Medicare and Total usable organs by one on W/S D Part III, Lines 62 & 63
Include payment from recipient CTC as Revenue for Organs Sold on W/S D-4, Part III, Line 66
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3106

9. Kidney Paired Donations
Responsibilities of receiving transplant center:
Include payment to donating transplant center for donor I/P nephrectomy in kidney acquisition cost center
Transplant count based upon recipient’s insurance (similar to any other transplant)
Routine follow-up care for donor
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3106

10. Tips with KPD
Establish processes and responsibilities for each department involved
Communication plan
Billing/collecting to/from receiving CTC
Reducing charges to cost
Recording revenue received
Counting organs appropriately

11. Kidney Paired Donations
Other Challenges with KPD (Not Kidney Acquisition)
Donor Complications
Out-of-Network Services

12. Medicare Secondary Payer Organs

13. Medicare Secondary Payer Benefits
To collect the shortage in organ acquisition payment between the primary payer to what Medicare would have paid if Medicare were primary.

14. Medicare Guidelines Medicare secondary benefits may be payable if:
Payment < charges for Medicare covered services
Payment < gross amount payable by Medicare
Not accept or not obligated to accept primary payment as payment in full
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3104

15. Payment Comparison Primary Payer Medicare Transplant $40,000
Organ Acquisition
$65,000
Total Payment
$85,000
$105,000

16. Necessary Steps
Need to bill Medicare (if Secondary) even if no payment is expected
Contractual language for commercial payer does not indicate that primary payment is considered “payment in full”

17. Medicare Secondary Payer Example
Primary = Commercial
Secondary = Medicare
Provider does not accept payment as payment in full

18. Medicare Secondary Payer (Step One)
Compare Primary payment to Medicare
Commercial vs. Medicare Payment
Total Charges
Primary Payment
Medicare DRG
OAC
Total Medicare
Qualify? 1
$180,000
$125,000
$40,000
$65,000
$105,000 No 2
$150,000
$85,000
Yes
Cost per Organ = Worksheet D-4 Part III (Line 69 divided by Line 63)

19. Medicare Secondary Payer (Step 2)
Calculate percentage of payment for organ acquisition and determine offset
Determine Offset
Total Charges
Primary Payment
Payment as a % of Charges
SAC Charge
Offset 1
$180,000
$125,000
69%
$75,000
N/A 2
$150,000
$85,000
57%
$42,500

20. Medicare Secondary Payer Summary
Increase Medicare usable organs by one
Include $42,500 on D-4, Part III Line 66 as Revenue for Organs Sold

21. Helpful Hints Must bill as MSP
Properly identify Medicare Secondary Payer
Perform calculation on accounts with MSP
For those that qualify, review contracts for ”payment in full” language and exclude if exists
Claim eligible MSP organs on MCR
Offset portion of OAC payment from primary

22. Counting Medicare Organs

23. Medicare Usable Organs
Medicare Ratio
Medicare Usable Organs
Total Usable Organs
Medicare Primary Transplants
Total Transplants
Medicare Secondary Transplants (if Medicare had some liability)
Deceased Donor Organs
Organs Sold to Other Hospitals (e.g., Paired Exchange)

24. Medicare Organs Defined
Medicare usable organs include organs transplanted into Medicare beneficiaries (excluding Medicare Advantage beneficiaries), organs that had partial payments by a primary insurance payer in addition to Medicare, organs sent to other CTCs, organs sent to OPOs and kidneys sent to MRTCs (that have a reciprocal sharing agreement with the OPO in effect prior to March 3, 1988 and approved by the contractor). 
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3115A

25. Medicare Organs Defined
Medicare usable organs do not include organs used for research, organs sent to veterans’ hospitals, organs sent outside the United States, organs transplanted into non-Medicare beneficiaries, organs that were totally paid by primary insurance other than Medicare, organs that were paid by a Medicare Advantage plan, organs procured from a non-certified OPO and kidneys sent to MRTCs (without a reciprocal sharing agreement with the OPO in effect prior to March 3, 1988 and approved by the contractor). 
Source: Provider Reimbursement Manual (CMS Pub. 15-1), Chapter 31, Section 3115A

26. Medicare 45 20 5 75 100 130 Medicare Ratio 45% 100% 57.7%
Primary/ MSP Tx
DD (OPO)*
External KPD*
Children’s Hospital*
Total
Medicare 45 20 5 75
100
130
Medicare Ratio
45%
100%
57.7%

27. Medicare 45 20 5 75 100 130 Medicare Ratio 45% 100% 57.7%
Primary/ MSP Tx
DD (OPO)*
External KPD*
Children’s Hospital*
Total
Medicare 45 20 5 75
100
130
Medicare Ratio
45%
100%
57.7%
* Include hospital charges on W/S D-4 Part I and payments received on W/S D-4 Part III, Line 66.

28. Medicare 45 20 5 75 100 130 Medicare Ratio 45% 100% 57.7%
Primary/ MSP Tx
DD (OPO)*
External KPD*
Children’s Hospital*
Total
Medicare 45 20 5 75
100
130
Medicare Ratio
45%
100%
57.7%
* Include hospital charges on W/S D-4 Part I and payments received on W/S D-4 Part III, Line 66.

29. Medicare 45 20 5 75 100 130 Medicare Ratio 45% 100% 57.7%
Primary/ MSP Tx
DD (OPO)*
External KPD*
Children’s Hospital*
Total
Medicare 45 20 5 75
100
130
Medicare Ratio
45%
100%
57.7%
* Include hospital charges on W/S D-4 Part I and payments received on W/S D-4 Part III, Line 66.

30. Medicare 45 20 5 75 100 130 Medicare Ratio 45% 100% 57.7%
Primary/ MSP Tx
DD (OPO)*
External KPD*
Children’s Hospital*
Total
Medicare 45 20 5 75
100
130
Medicare Ratio
45%
100%
57.7%
* Include hospital charges on W/S D-4 Part I and payments received on W/S D-4 Part III, Line 66.

31. Takeaways Proper reporting of KPD costs Determining MSP organs
Counting appropriate Medicare organs

32. Thank you! Let’s Stay in Touch!
Robert Howey
(888) , ext. 3147

33. Internet-Only Manuals (IOM)
Operational Management of Medicare Organ Acquisition Cost Centers (Presented by John Rogers and Robert Howey)Section I: Ideas and Strategies for Managing Medicare Organ Acquisition Cost Centers
CMS References
Paper Based Manuals
Provider Reimbursement Manual, Part I, Chapter 31
Internet-Only Manuals (IOM)
Medicare Benefit Policy Manual (Pub , Chapter 11, Section 140)
Medicare Claims Processing Manual (Pub , Chapter 3, Section 90)