How Audit-Ready Are the Time Studies in Your CMS Cost Report?
For many healthcare systems, the start of a new year is a busy time after having just completed their fiscal year. It’s about pulling together mountains of data and synthesizing it into the annual CMS Cost Report. Unfortunately, many teams do the bare minimum even though time studies are a critical component of calculating labor costs for Medicare reimbursement.
A few months ago, we hosted a seminar called Reimagining Time Studies that focused in part on how your time studies would hold up if audited. This article helps you self-assess how well your team’s efforts measure up. Robert Howey of Toyon Associates summarized it this way:
The big key with time studies is that you want to have credibility to make sure that it’s not being completed by one person for everybody, or it’s being completed a year after the fact. If you have something else to fall back on from an audit, it’s probably rare that it ever gets to that point. We can tell when they just put it all together at the last minute. (Reimagining Time Studies Webinar Transcript, p.29)
CMS takes them seriously with adverse outcomes being expensive reviews, loss of reimbursement, countless hours of staff time focused on responding, reputational damage, and even litigation. Following are six questions to ask yourself and see how confident you are in your team’s time study processes:
1. Do You Properly Train Your Staff?
At the center of successful time studies are the staff who report their time. If they are not properly trained and fully “bought in,” then the process is flawed from the start.
“I made every effort to attend staff meetings…and tell them about the Medicare Cost Report and how time studies are truly the driver behind that. I explained to them how our institution is reimbursed. Anytime a new employee starts… there’s a section about time tracking,” said Crystal Brown of University of Michigan Health. (p.24)
Ensure that your team is aware of the critical importance of their participation and how it contributes to the organization’s success. Use staff meetings, training, and orientation as a starting point and reinforce these concepts when they are beginning a reporting period.
2. Do You Have 100% Participation Rates?
Your Cost Report is only as good as the data that feeds it. Having full staff participation in reporting is essential. “We want to have 100 percent participation, or at least in the 90s, 95 and above,” said Robert Howey of Toyon Associates. (p.21)
There are two main paths to increasing response rates: minimizing the time and effort to respond and enforcing compliance. In the former, use a method that takes only a moment to respond such as an electronic form that can be completed on a mobile device so that staff can do it in real time.
Setting expectations early through training and even including it in their job description. Another technique is posting participation rates in a public forum, suggesting that “physicians by nature are competitive, so they don’t like to see their name at the bottom of the list.” (p.39)
Other suggestions from the panel were to make time study compliance part of performance reviews in which frequent offenders get marked down (p.38) or make time study submissions mandatory by including it as a condition of receiving payment or salary.
3. Are Your Time Study Reports Sufficiently Detailed?
Tip-offs to auditors are large blocks of unspecific time, a lack of information about the activities conducted, and no indication of when the time study was completed. These problems can be solved with a combination of process and technology.
Create an accountability layer of a person who regularly monitors and reviews time study submissions. If a staff member is tardy in filling them out or in a repetitive way then this team member reaches out, preferably within a day or two.
Using technology such as time-tracking platforms can enrich data by connecting it to existing EHR and calendar systems. Also, automated systems track who did what and when. “It has to be time-stamped and have their name,” said Brown. (p.30)
4. Do You Have Every Staff Member’s Reports Readily Available?
Casey Rowe of Barnes-Jewish Hospital suggests that “the basic rule is if I’m going to report labor costs on the Cost Report for reimbursement for Medicare, I want a matching time study for every single person that’s on it.” (p.32) While this may never be reviewed or checked, should an audit occur then being able to show your work is indispensable.
All too often, time surveys are not kept or referenced. Having a way to store them and recall them, whether in paper form or preferably in a searchable database, is essential. Also, your institution should have a policy for document retention that is in place and performed consistently.
5. How Confident Are You In the Accuracy of Your Data and Calculations?
Preparing the worksheet for the Cost Report is a big task and accuracy is paramount. If you have to gather data from hundreds of time studies into a spreadsheet, errors will inevitably creep in. Using a system that can aggregate the data automatically will take a frustrating, time-consuming process and not only increases accuracy but reduces the time to build that component of the Cost Report.
“One of the things that I see is that we talk about a lot of manual processes and a lot of manual input. When I look at some of these, there are some calculation errors. These surveys do affect a lot of things within the Medicare Cost Report. I've seen it where it could be significant dollars. It could be $100, 000 or $200, 000 – and maybe even more than that – just for one year,” said Howey. (p.12)
As Crystal Brown noted, “I’ve used the manual, the homegrown, and even the purpose-built automated software. It has been a game-changer. Our Cost Report was due last week and the spreadsheet that used to take me a week to put together was literally two or three hours.” (p.37)
Conclusion
If some of your answers to the questions left you wanting to learn more, now would be the time to do it. With CMS now resuming “normal operations” after a pause for the pandemic, it is an opportune time to scrutinize your process and shore it up.
To learn more about improving your time study program, we encourage you to check the following resources:
