American Hospital Directory - Methodology for Allocating Costs

Costs are allocated on a patient-by-patient basis. Each patient's bill contains charges by revenue center. We convert these charges to costs using a cost-to-charge ratio (RCC) for each revenue center. The corresponding RCCs are derived from the hospital's cost report per the chart below.

For example, if a patient had $300 in pharmacy charges and the hospital's RCC for pharmacy was 0.5000, then the cost would be allocated as $150 (300 x 0.5000 = 150).

Revenue center costs are then totaled to determine the total costs for each patient. Patients are subsequently summarized for reporting by DRG, by Medical Service, etc.

The following information details how revenue (from patient bills) and cost to charge ratios (from hospital cost reports) are cross-referenced for cost allocations:

ROUTINE SERVICES

Routine Accommodations (Private, Semi-Private, and Wards)

Revenue Codes: 10X - 19X
Cost Center: Worksheet C, Part I, line 30

ICU Accommodations

Revenue Centers: 20X
Cost Center: Worksheet C, Part I, lines 31, 33 - 35

CCU Accommodations

Revenue Centers: 21X
Cost Center: Worksheet C, Part I, lines 32

ANCILLARY SERVICES

Ambulance

Revenue Centers: 54X
Cost Centers: Worksheet C, Part I, line 95

Anesthesia

Revenue Center: 37X
Cost Centers: Worksheet C, Part I, line 53

Blood

Revenue Centers: 38X
Cost Centers: Worksheet C, Part I, lines 62

Blood Administration

Revenue Centers: 39X
Cost Centers: Worksheet C, Part I, lines 61, 63

Cardiology Catheterization

Revenue Centers: 481
Cost Centers: Worksheet C, Part I, lines 59

Cardiology Non-Catheterization

Revenue Centers: 48X (Excluding 481 Cardiology Catheterization) and 73X
Cost Centers: Worksheet C, Part I, lines 69

Clinic

Revenue Center: 51X
Cost Centers: Worksheet C, Part I, lines 88 - 90

CT Scan

Revenue Center: 35X
Cost Centers: Worksheet C, Part I, lines 57

Dialysis

Revenue Centers: 80X, 82X - 88X
Cost Center: Worksheet C, Part I, line 74

Durable Medical Equipment

Revenue Centers: 29X
Cost Centers: Worksheet C, Part I, lines 96, 97

Emergency Room

Revenue Center: 45X
Cost Center: Worksheet C, Part I, line 91

Implantable Devices

Revenue Center: 275, 276, 278, 624
Cost Center: Worksheet C, Part I, line 72

Lab, EEG

Revenue Centers: 30X, 31X, 74X, 75X
Cost Centers: Worksheet C, Part I, lines 60, 70

Labor and Delivery Room

Revenue Centers: 72X
Cost Centers: Worksheet C, Part I, lines 52

MRI

Revenue Centers: 61X
Cost Centers: Worksheet C, Part I, lines 58

Occupational Therapy

Revenue Centers: 43X
Cost Centers: Worksheet C, Part I, lines 67

Operating and Recovery Room

Revenue Centers: 36X, 71X (Excluding 716), 79X
Cost Centers: Worksheet C, Part I, lines 50, 51

Organ Acquisition

Revenue Centers: 81X, 89X
Cost Centers: Worksheet C, Part 1, lines 105 - 112

Outpatient Services

Revenue Centers: 49X, 50X
Cost Centers: Worksheet C, Part 1, lines 75

Pharmacy

Revenue Centers: 25X, 26X, 63X
Cost Centers: Worksheet C, Part I, lines 64, 73

Physical Therapy

Revenue Centers: 42X
Cost Centers: Worksheet C, Part I, lines 66

Radiology

Revenue Centers 28X, 32X, 33X, 34X, 40X
Cost Centers: Worksheet C, Part I, lines 54 - 56

Repiratory Therapy

Revenue Centers: 41X, 46X
Cost Centers: Worksheet C, Part I, lines 65

Speech Therapy

Revenue Centers: 44X, 47X
Cost Centers: Worksheet C, Part I, lines 68

Supplies

Revenue Centers: 270 - 274, 277, 279, 62X (Excluding 624)
Cost Centers: Worksheet C, Part I, line 71

Other

Revenue Centers: 002-099, 22X, 23X, 24X, 52X, 53X, 55X - 60X, 64X - 70X, 76X - 78X, 90X - 95X, 99X
Cost Centers: Worksheet C, Part I, line 76, 92 - 94, 98, 99

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TECHNICAL NOTES:
Cost allocations are based on a hospital's cost reporting period most closely coinciding with the federal fiscal year of its Medicare claims data. Costs are not allocated for hospitals that do not have a recent cost report (i.e. a cost reporting period ending no more than 30 months prior to the federal fiscal year end of claims data) or that do not have sufficient data (i.e. a recent reporting period of at least six months with both costs and charges reported). If a departmental cost-to-charge ratio is zero, indefinable, or unreasonable then a national median ratio is used.


	Methodology for Allocating Costs Close Window Costs are allocated on a patient-by-patient basis. Each patient's bill contains charges by revenue center. We convert these charges to costs using a cost-to-charge ratio (RCC) for each revenue center. The corresponding RCCs are derived from the hospital's cost report per the chart below. For example, if a patient had $300 in pharmacy charges and the hospital's RCC for pharmacy was 0.5000, then the cost would be allocated as $150 (300 x 0.5000 = 150). Revenue center costs are then totaled to determine the total costs for each patient. Patients are subsequently summarized for reporting by DRG, by Medical Service, etc. The following information details how revenue (from patient bills) and cost to charge ratios (from hospital cost reports) are cross-referenced for cost allocations: ROUTINE SERVICES Routine Accommodations (Private, Semi-Private, and Wards) Revenue Codes: 10X - 19X Cost Center: Worksheet C, Part I, line 30 ICU Accommodations Revenue Centers: 20X Cost Center: Worksheet C, Part I, lines 31, 33 - 35 CCU Accommodations Revenue Centers: 21X Cost Center: Worksheet C, Part I, lines 32 ANCILLARY SERVICES Ambulance Revenue Centers: 54X Cost Centers: Worksheet C, Part I, line 95 Anesthesia Revenue Center: 37X Cost Centers: Worksheet C, Part I, line 53 Blood Revenue Centers: 38X Cost Centers: Worksheet C, Part I, lines 62 Blood Administration Revenue Centers: 39X Cost Centers: Worksheet C, Part I, lines 61, 63 Cardiology Catheterization Revenue Centers: 481 Cost Centers: Worksheet C, Part I, lines 59 Cardiology Non-Catheterization Revenue Centers: 48X (Excluding 481 Cardiology Catheterization) and 73X Cost Centers: Worksheet C, Part I, lines 69 Clinic Revenue Center: 51X Cost Centers: Worksheet C, Part I, lines 88 - 90 CT Scan Revenue Center: 35X Cost Centers: Worksheet C, Part I, lines 57 Dialysis Revenue Centers: 80X, 82X - 88X Cost Center: Worksheet C, Part I, line 74 Durable Medical Equipment Revenue Centers: 29X Cost Centers: Worksheet C, Part I, lines 96, 97 Emergency Room Revenue Center: 45X Cost Center: Worksheet C, Part I, line 91 Implantable Devices Revenue Center: 275, 276, 278, 624 Cost Center: Worksheet C, Part I, line 72 Lab, EEG Revenue Centers: 30X, 31X, 74X, 75X Cost Centers: Worksheet C, Part I, lines 60, 70 Labor and Delivery Room Revenue Centers: 72X Cost Centers: Worksheet C, Part I, lines 52 MRI Revenue Centers: 61X Cost Centers: Worksheet C, Part I, lines 58 Occupational Therapy Revenue Centers: 43X Cost Centers: Worksheet C, Part I, lines 67 Operating and Recovery Room Revenue Centers: 36X, 71X (Excluding 716), 79X Cost Centers: Worksheet C, Part I, lines 50, 51 Organ Acquisition Revenue Centers: 81X, 89X Cost Centers: Worksheet C, Part 1, lines 105 - 112 Outpatient Services Revenue Centers: 49X, 50X Cost Centers: Worksheet C, Part 1, lines 75 Pharmacy Revenue Centers: 25X, 26X, 63X Cost Centers: Worksheet C, Part I, lines 64, 73 Physical Therapy Revenue Centers: 42X Cost Centers: Worksheet C, Part I, lines 66 Radiology Revenue Centers 28X, 32X, 33X, 34X, 40X Cost Centers: Worksheet C, Part I, lines 54 - 56 Repiratory Therapy Revenue Centers: 41X, 46X Cost Centers: Worksheet C, Part I, lines 65 Speech Therapy Revenue Centers: 44X, 47X Cost Centers: Worksheet C, Part I, lines 68 Supplies Revenue Centers: 270 - 274, 277, 279, 62X (Excluding 624) Cost Centers: Worksheet C, Part I, line 71 Other Revenue Centers: 002-099, 22X, 23X, 24X, 52X, 53X, 55X - 60X, 64X - 70X, 76X - 78X, 90X - 95X, 99X Cost Centers: Worksheet C, Part I, line 76, 92 - 94, 98, 99 ________________ TECHNICAL NOTES: Cost allocations are based on a hospital's cost reporting period most closely coinciding with the federal fiscal year of its Medicare claims data. Costs are not allocated for hospitals that do not have a recent cost report (i.e. a cost reporting period ending no more than 30 months prior to the federal fiscal year end of claims data) or that do not have sufficient data (i.e. a recent reporting period of at least six months with both costs and charges reported). If a departmental cost-to-charge ratio is zero, indefinable, or unreasonable then a national median ratio is used.