Objectives: Things Needed for Cost Analysis. What is a Cost Analysis? Family Planning Revenue Streams. Family Planning Costs

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1 Objectives: Cost Analysis Lessons from the Field Stephanie Ceponis, Lead Site Financial Analyst Patricia Kytlica, Executive Director, Women s Clinic Understand what cost analysis means Understand the relationship between the cost analysis and sliding fee scale Understand how to further use the cost analysis information 2 What is a Cost Analysis? A method of calculating what it costs to provide a service A requirement of the Title X Program Guidelines, Section 6.3 (see Appendix A) Charges must be based on a cost analysis of all services provided by the project A preparation for ACA 3 Things Needed for Cost Analysis Costs of operating a family planning program Time measurement of staff Utilization numbers for services, labs and contraceptives ti for a year Actual costs of contraceptives, labs, medications, and overhead for a year Square footage of clinic, lab, pharmacy and administration space for allocation of facility costs 4 Family Planning Costs Family Planning Revenue Streams Salaries & fringe benefits Disposable medical supplies Contraceptives Medications Lab supplies (pregnancy tests, slides, etc.) Insurance Facilities (rent, utilities, phone) Administrative costs (Management, Finance, IT, etc.) Other shared costs (EHR, maintenance) Community Outreach Family PACT fee for service Medi-Cal fee for service Medi-Cal Managed Care Private Insurance Title X reimbursement grant Other 5 6 1

2 Let s Take a Look Look at Gerry Christie s methodology Cover key parts of the workbook Review of illustrative example Analyze purpose of cost analysis Take action for operational efficiencies Gerry Christie s Methodology Collect direct costs for: Medical services Laboratory Pharmacy Collect other costs for allocation: Administration Facilities (rent, utilities, phone, depreciation, etc.) Collect utilization (frequency) data for each service by CPT code 7 8 Christie s Methodology, continued Service Cost Per CPT Annual total utilization of all CPT codes RVU (Relative Value Unit) for region (given in workbook) Total service units per CPT = utilization X RVU Average cost per service unit = total medical costs total service units Service cost per CPT = utilization X average cost per service unit 9 Christie s Methodology Service Cost Per CPT, continued CPT New patient, brief visit Service units = 233 (utilization) X (RVU) = 10,839 Average cost per service unit = $799,107 (total medical cost) 601,635 (total service units) = $1.33 Service cost = (RVU) x $1.33 (average cost per service unit) = $ Christie s Methodology, continued Example of a Cost Analysis Workbook includes calculations for Laboratory and Pharmacy costs Lab and Pharmacy worksheets are setup similarly to the medical cost analysis sheet Lab and Pharmacy RVU is your actual cost Service / Procedure CPT Utilization RVU IUD insertion New Pt brief New Pt limited Estab Pt intermed Total Service Units Avg cost / service unit Service cost ,345 $1.33 $ ,839 $1.33 $ ,007 $1.33 $ ,742 $1.33 $ Total various 601,635 Total allocated cost = $799,107 Total service units = 601,635 = $1.33 Fee $ $70.00 $91.00 $

3 0% - 100% 101% - 125% 126% - 150% 151% - 175% 176% - 200% 201% - 225% 226% - 250% 251% and greater Family Federal Poverty Level Federal Poverty Level Federal Poverty Level Federal Poverty Level Federal Poverty Level Size No Charge FPACT No Charge FPACT No Charge Partial Patient Fee/ Title X Patient Full Pay Patient Pays 0% Patient Pays 10% Patient Pays 25% Patient Pays 40% Patient Pays 55% Patient Pays 70% Patient Pays 85% Patient Pays 100% 1 $0 - $958 $959 - $1,197 $1,198 - $1,436 $1,437 - $1,676 $1,677 - $1,915 $1,916 - $2,154 $2,155 - $2,394 $2,395 & up 2 $0 - $1,293 $1,294 - $1,616 $1,617 - $1,939 $1,940 - $2,262 $2,263 - $2,585 $2,586 - $2,908 $2,909 - $3,231 $3,232 & up 3 $0 - $1,628 $1,629- $2,034 $2,035 - $2,441 $2,442 - $2,848 $2,849 - $3,255 $3,256 - $3,662 $3,663 - $4,069 $4,070 & up 4 $0 - $1,963 $1,964 - $2,453 $2,454 - $2,944 $2,945 - $3,434 $3,435 - $3,925 $3,926 - $4,416 $4,417 - $4,906 $4,907 & up 5 $0 - $2,298 $2,299 - $2,872 $2,873 - $3,446 $3,447- $4,021 $4,022 - $4,595 $4,596 - $5,169 $5,170 - $5,744 $5,745 & up 6 $0 - $2,633 $2,634 - $3,291 $3,292 - $3,949 $3,945 - $4,607 $4,608 - $5,265 $5,266 - $5,923 $5,924 - $6,581 $6,582 & up 7 $0 - $2,968 $2,969 - $3,709 $3,710 - $4,451 $4,452 - $5,193 $5,194 - $5,935 $5,936 - $6,677 $6,678 - $7,419 $7,420 & up 8 $0 - $3,303 $3,304 - $4,128 $4,129 - $4,954 $4,955 - $5,779 $5,780 - $6,605 $6,606 - $7,431 $7,432 - $8,256 $8,257 & up 9 $0 - $3,638 $3,639 - $4,547 $4,548 - $5,456 $5,457 - $6,366 $6,367 - $7,275 $7,276 - $8,184 $8,185 - $9,094 $9,095 & up 10 $0 - $3,973 $3,974- $4,966 $4,967 - $5,959 $5,960 - $6,952 $6,953 - $7,945 $7,946 - $8,938 $8,939 - $9,931 $9,932 & up 11 $0 - $4,308 $4,309 - $5,384 $5,385 - $6,461 $6,462 - $7,538 $7,539 - $8,615 $8,616 - $9,692 $9,693 - $10,769 $10,770 & up 12 $0 - $4,643 $4,644 - $5,803 $5,804 - $6,964 $6,965 - $8,124 $8,125 - $9,285 $9,286 - $10,446 $10,447 -$11,606 $11,607 & up 4/22/2013 Sliding Fee List CPT Costs from Cost Analysis Non FPACT or Medi-Cal patients Cost Analysis and Sliding Fee Scale Relationship How they work together CPT 0-100% 101%- 125% 126%- 150% 151%- 175% 176%- 200% 201%- 225% 226%- 250% No Pay Pay Pay Pay Pay Pay fee 10% 25% 40% 55% 70% 85% Over 250% Full fee $11.70 $29.25 $46.80 $64.35 $81.90 $99.45 $ $7.00 $17.50 $28.00 $38.50 $49.00 $59.50 $ $9.10 $22.75 $36.40 $50.05 $63.70 $77.35 $ $6.40 $16.00 $25.60 $35.20 $44.80 $54.40 $64.00 Example of CPT 58300: $117 x 85% = $99.45; $117 x 70% = $81.90 Full fee multiplied by percentage patient is expected to pay Sliding Fee Scale What s in it for Me? Further use of the cost analysis as a business tool See Appendix B Initial Cost Analysis Adjusted for Allocation of Costs Medical Labs Pharmacy Total Revenue 580, , ,371 1,085,666 Cost 799,106 72, , ,567 Net (218,846) 166, , ,099 Revenues use the assumption that all visits are charged at full fee Costs are from the cost analysis workbook Medical Labs Pharmacy Total Revenue 580, , ,371 1,085,666 Cost 549, , , ,567 Net 31,154 41,222 40, ,099 Revisited cost allocation to review for accuracy Revised costs shifting more costs from Medical to Labs and Pharmacy Total costs for all three service types changed to reflect more accurate allocation Results now show profits for all three service types

4 What Happens if Utilization is Off? Total medical costs Total service units $799, ,635 $799, ,000 = Total cost per service unit = $1.33 initial i i cost per service unit = $1.14 lower adjusted cost for higher utilization What Happens if Utilization is Off? Breaking it Down CPT New patient, brief visit (RVU) x $1.33 (average cost per service unit) = $ (RVU) x $1.14 (average cost per service unit) = $ ACA and Cost Analysis Better understand your costs Analyze your costs Benchmark against your peers Negotiate contracts with Covered California Exchange and insurance carriers Compare contract rate to your costs What s in it for Me? Questions to analyze your costs Are my cash paying clients charged enough to cover my costs? Are my personnel costs too high or just right? Are my staffing levels enough? Are we getting enough visits for my personnel level? Objectives Have we met them? Understand what cost analysis means Understand the relationship between the cost analysis and sliding fee scale QUESTIONS?? Understand how to further use the cost analysis information

5 Contact information Call us! Stephanie Ceponis, Lead Site Financial Analyst x4534 Christine Fu, Finance Director x4407 Jon Duque, Budget Analyst x