Question

Case Mix Exercise

The CFO just called. She was supposed to have asked you to get her the Case Mix Index (CMI) for 2013, 2014, and 2015 a month ago. She has just realized that she never asked you for the data. She must have it for the administrative directors meeting that takes place the next day, but she actually needs the information by 3 pm so that it can be copied and placed in the packet for the directors. The CFO is requesting a report to include a graph and an analysis of trended data to report to the directors.

As you review the data from the Table, calculate the annual CMI for each year and design a bar graph of the CMI for calendar years 2013, 2014, and 2015. In your own words, explain any trends you notice from the graph and why these trends might be of some concern to the CFO and the directors. Based on the information from the graph, list and define the steps needed to be taken to provide as much information to the CFO as soon as possible to explain the trends. Explain your answers in detail. Please write clearly

CMI by Month Years 2013, 2014, and 2015
Month                                                                               Year
2013                       2014                                                                       2015
January	1.4321	1.3276	1.3756
February	1.3215	1.2535	1.4544
March	1.2487	1.2478	1.2489
April	1.5789	2.2435	1.2570
May	1.5789	1.5248	1.5278
June	1.5321	1.4245	1.5741
July	1.2635	1.2857	1.2576
August	1.5227	1.4456	1.5700
September	1.4568	1.2357	1.2768
October	1.2748	1.2575	1.2578
November	1.3578	1.3574	1.4456
December	1.2357	1.6574	1.5788
Annual

Source: Fictitious data, for illustration purposes only

Answer 1

From the above graph we can see the trend that there is a dip after high cmi month. It suggest that low cmi reduces the profitability of the hospitals and that is why low cmi is the concern for CFO and Directors.

For this we need to understand CMI and why its important

• CMI is an important performance indicator for your hospital not because it tells a big story in and of itself, but because of how it impacts your hospital's finances. CMI is a measure of the average severity level of a hospital's procedures.
• CMI is an important performance indicator for your hospital not because it tells a big story in and of itself, but because of how it impacts your hospital’s finances.
• CMI is a measure of the average severity level of a hospital’s procedures.  The Centers for Medicare and Medicaid Services (CMS) use CMI to determine a hospital’s reimbursement rate across all of its cases.  The logic dictates that a hospital performing more complex cases should receive a higher reimbursement rate for its cases than a hospital doing less complex cases, due to the higher-CMI hospital’s higher costs to manage its cases.  While the logic may be debatable, the revenue impact on hospitals is not.

• a hospital’s CMI is only as good as its clinical documentation.  So two hospitals having the exact same caseloads can have very different CMIs – and reimbursement rates – if one hospital documents its cases more poorly than the other.  That’s why CFOs and other financial employees at hospitals work hard to drive up their hospital’s CMI.  Any missed opportunity to increase a case’s severity level is a missed opportunity for revenue not only in that procedure, but across the entire hospital, because each individual case affects the hospital’s CMI.

  This is why it’s so important to document exactly what happens in each case accurately and to go to all lengths (within reason) to boost each procedure’s severity level.  One critical component of documentation in a hospital’s surgical areas is the detail surrounding medical devices used in each case.  If a simple medical device goes undocumented, it can jeopardize that procedure’s severity, and can also jeopardize the entire hospital’s CMI and reimbursement rate down the line.  Clinical documentation systems like iRISupply from Mobile Aspects allow hospitals to maximize their billings for each procedure and ensure their CMI is as high as possible.