Case Study: Health System Pursues VDA and Recoups Additional Payments
Client Background
A three-hospital health care system in the Northeast.
The Situation
The health care system engaged Moss Adams to pursue a volume decrease adjustment (VDA) to recoup additional payments for a specific cost reporting period. The health care system was unaware of this reimbursement opportunity until Moss Adams identified it during an advisory review.
To pursue a VDA, hospitals must be able to:
- Show a 5% reduction in total discharges in a given cost report period
- Prove that the reduction was beyond the hospital’s control
- Confirm that they met the criteria to be defined as either a Sole Community Hospital (SCH) or Medicare Dependent Hospital (MDH) during some portion of that cost reporting period
- Complete the required financial analysis in accordance with the rules and applicable administrative and judicial decisions that govern these calculations
- Submit by the required deadline
- Successfully navigate the audit of the submission
The health care system needed help to assess the potential opportunity, identify and document the allowable and unforeseen circumstances that influenced the hospital’s discharge reduction, prove the reduction was beyond management’s control, and meet the timeframe to submit an application.
The Solution & Results
Moss Adams prepared an initial assessment and determined that an application was warranted. A deep dive analysis was then prepared after obtaining additional data to analyze comparative utilization and cost data. Data analyzed included costs by department, along with core staff analysis at the department level.
Moss Adams also conducted interviews with system personnel, evaluated other internal documentation, and assessed other internal and external circumstances that would support the request for additional payments through a VDA.
Moss Adams prepared, and presented to management, a VDA suitable for submission including a calculation to determine the adjustment amount the hospital was eligible to receive, evidence, and reasoning. The Moss Adams team remained available to support the application through the Medicare Administrative Contractor (MAC) review and approval process.
As a result, the client was able to recoup $5.4 million in payments.
We’re Here to Help
To learn more about the volume decrease adjustment, how it can benefit your organization, and how to leverage this opportunity, please contact your Moss Adams professional.
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