J5 MAC Part A Providers serving beneficiaries in Iowa, Kansas, Missouri and Nebraska

Organ Acquisition Costs

Hospitals that claim Medicare reimbursement for organ acquisition costs must follow Medicare policy when allocating direct salary and wage costs between organ acquisition functions and organ transplant and post transplant functions. Some employees (administrative or clinical) may work with more than one type of organ. Some employees may split their time between organ acquisition functions and organ transplant and post transplant functions. In each case, ongoing time reports are the most accurate means for allocating salaries and wages between the functions. However, in lieu of ongoing time reports, periodic time studies may be used. CMS Pub. 15-1 §2313.2E (see below) reflects CMS' requirements with respect to time studies.

E. Periodic Time Studies. --Periodic time studies, in lieu of ongoing time reports, may be used to allocate direct salary and wage costs. However, the time studies used must meet the following criteria:

1. The time records to be maintained must be specified in a written plan submitted to the intermediary no later than 90 days prior to the end of the cost reporting period to which the plan is to apply. The intermediary must respond in writing to the plan within 60 days from the date of receipt of the request, whether approving, modifying, or denying the plan.

2. A minimally acceptable time study must encompass at least one full week per month of the cost reporting period.

3. Each week selected must be a full work week (Monday to Friday, Monday to Saturday, or Sunday to Saturday).

4. The weeks selected must be equally distributed among the months in the cost reporting period, e.g., for a 12 month period, 3 of the 12 weeks in the study must be the first week beginning in the month, 3 weeks the 2nd week beginning in the month, 3 weeks the 3rd, and 3 weeks the fourth.

5. No two consecutive months may use the same week for the study, e.g., if the second week beginning in April is the study week for April, the weeks selected for March and May may not be the second week beginning in those months.

6. The time study must be contemporaneous with the costs to be allocated. Thus, a time study conducted in the current cost reporting year may not be used to allocate the costs of prior or subsequent cost reporting years.

7. The time study must be provider specific. Thus, chain organizations may not use a time study from one provider to allocate the costs of another provider or a time study of a sample group of providers to allocate the costs of all providers within the chain.

The intermediary may require the use of different, or additional, weeks in the study in its response to the provider's request for approval and may prospectively require changes in the provider's request as applied to subsequent cost reporting periods.
When auditing organ acquisition costs, our auditors will evaluate whether these criteria have been met where a hospital has used time studies to allocate salary and wage costs. If the criteria have not been met, the auditor may disallow Medicare reimbursement for any salary and wages claimed as an organ acquisition cost.

 

 

Page Last Updated: Monday, 11-Jan-2010 10:53:20 CST