Cost Analysis Examples Presented January 8 th, 2014

ND STATEWIDE IMMUNIZATION BILLING GRANT

Cost Analysis Examples

Presented January 8th, 2014

1) Admin Fee - Flu2) Admin Fee – Non-Flu3) Vaccine - Zostavax

Examples to be reviewed:

The worksheets being used today are a revised version of

worksheets used by the state of Arizona.

The data being used in today’s examples are for informational

purposes only.

Please use this presentation as a guide to help you through the analysis for your facility by using

your own time studies, costs,

and personnel information.

Information to gather before starting

Employee Salaries & Fringe Percentages

Time Studies:1) Time to process one flu vaccination 2) Time spent scheduling, preparing

charts, form prep etc.3) Time to Administer Vaccine-RN Time

Estimated Cost of Supplies for 1 Shot

Facility Costs:Rent

UtilitiesTelephone

Janitorial CostsComputer Maintenance Costs

EMR Annual FeesComputer Software Annual Fees

# of Vaccines Given – Broken down by vaccination

Administration Fees

The example to follow is for:Administration Fee for the Flu Vaccine

For the Period of Oct 1 – March 31, 2012

Flu Administration Cost Calculator

Analysis Period: Oct 1, 2012 - Mar 31, 2013

Percent of NET revenues used by the billing/collections staff, department, or service 16.7%

Percentage of all claims denied/never paid 4.4%

COSTS RELATED TO ALL COLLECTIONS



This spreadsheet can be used to calculate the cost of each vaccine administration.

Enter your responses into Column C.You can choose any time period you want but 12 months is recommended.

Rows in gray will automatically calculate. You do not need to fill these in.

Section A

% Of Net Revenues:

Our Example: 3.6 hrs. spent on flu per day (Time Study estimated hours) / 21.60 hrs.. available per day ( 3 staff = 2 @ 8hrs per day and 1 @ 5.6hrs per day) equals the 16.7%

% of claims denied/never paid:

Our example: Based on % of Insurance Collections And assuming Private Pay is 100% Collectible – we looked at what all insurancecompanies were billed versus the dollars we received.

NUMBER OF VACCINES GIVENSection B

Total number of all vaccines administered during the period (e.g. CPT 90471, 90473, G0008) 3,375

Our Example: Admin Code: 90471 & 90473 = 2629(Injectable Admin and Mist Admin)

Admin Code: G0008 = 746 ( Medicare B Admin )



Flu Only

COST OF ADMINISTRATIONSection C

Time Study: the amount of time in minutes it takes to process one administration of vaccine from the time a client walks in the door to the time the client leaves.

7

For appointments for administration of vaccines only (i.e. no doctor visit): number of hours spent by staff scheduling appointments, preparing charts, and checking in and out during the period 394

Average hourly wage of staff making appointments, etc. $ 13.94 Average fringe benefit percentage 45.00%

PERSONNEL COSTS FOR SCHEDULING, ETC. $ 7,958.87



Our Example: Time is based on the vaccinations given at a flu clinic = 7/min per client

For Appts = Total # Flu = 3375 * 7 minutes / divide that by 60 minutes = 394 hrs..

Average Wage/Fringe = the average wage is for 3 front desk staff and The fringe is the overall average % for the facility


Hours spent over the period entering vaccines into the registry (THOR).

56.3Average hourly salary of all staff entering vaccines into the registry (THOR).

$ 13.94 Average percentage of fringe benefits for the staff described above.

45.00%

PERSONNEL COSTS FOR ENTERING DATA INTO REGISTRY $ 1,136.98


Our Example: Hours Spent = 1 min per claim * 3375 claims / 60 min = 56.3 hrs..

Personnel Costs = # hrs.. 56.3 * (Average salary + fringe) = $1136.98



Estimated Flu @ 1 min per claim

Average Front Desk Staff

Salary/Fringe from Prior Section

Calculated Field


Number of hours staff spend on triage calls related to vaccines during the period 3.94

Average hourly wage of staff answering vaccine related triage calls $ 26.58 Average percentage of fringe benefits for the staff described above.

45.00%

PERSONNEL COSTS FOR VACCINE TRIAGE CALLS $ 151.76




Estimated @ 1% of Time for Appts =394

hrs. From the first part of

Section C

Average of RN Wages & Overall

Facility Fringe

Our Example: Hours Spent = 1%* 394 hrs. = 3.94 hrs.

Personnel Costs = 3.94hrs * Salary + Fringe = $151.76

Calculated Field





Staff time (in minutes) administering vaccine (include distribution of VIS, answering questions, drawing up vaccine, administering the injection, and documenting it). Assume this is a single antigen vaccine. 16875.0

Additional staff time (in minutes), per antigen, for multiple-antigen vaccines. 0.0

Average hourly salary of staff administering vaccine $ 26.58 Average percentage of fringe benefits for the staff described above.

45.00%

PERSONNEL COSTS FOR ADMINISTERING VACCINE - INITIAL ANTIGEN $ 10,839.66

Estimated 5 min/Client * Total Flu Vaccines of

3375

N/A for Flu

Average of RN Wages & Overall

Facility Fringe

Our Example: Staff Time = 5 minutes * 3375 Flu Vaccinations = 16,875 minutes

Personnel Costs = 16,875 min/60 = 281.25 hrs. * Salary + Fringe = $10,839.66

Calculated Field


Section D

Estimated cost of supplies per shot 0.29Total cost of medical supplies $978.75

Cost of sharps containers used in the period $ 48.00

Percentage of sharps used in office that are vaccine-related 100%

Cost of disposal total service annually $ 157.00 Percentage of disposal service for the period 92.00%

TOTAL SUPPLIES AND SHARPS DISPOSAL $ 1,171.19



Our Example: Cost of Supplies = Gloves 1 box of 100 @ $4.52 = $4.52/100 X 2 = $0.09Syringes 1 box of 100 @ $15.71/100 = $0.16 Cotton Ball = $.01Band-Aids 1 box of 100 @ 2.45/100 = $0.02 Alcohol Swab = $.01

Cost of Sharps Container = Estimated 250 needles per container3375/250 = 13.5 containers just for flu shots * $3.56 per container * 100% usage = $48

Cost of Disposal = $157 * 92 % = $144.44

Calculated Field = Total # Shots 3375 * 29 cents

Annual Facility Disposal Cost

Flu = 92% of all vaccinations given

during this reporting time

period

$3.56 * 13.5 containers* 100% usage

Calculated Field - Total Supply Cost = $978.75 +

$48.00 + $144.44 ($157*92%) = $1171.19

COST OF ADMINISTRATION


Total rent/utilities/janitorial and telephone during the reporting period $17,786.62

Estimated percentage of rent and utilities attributable to vaccine-related appointments 45.00%

TOTAL RENT AND UTILITIES $8,003.98




Section D

6 Months of the annual Exp’s allocated to Public Health Services only – not FP, BT, Tobacco,etc.

Flu (admin + vaccine) is 45% of all revenue generated by Public Health Services only – do not include FP.

Our Example: 6 Months of the following expenses:Rent = 9494.36 Janitorial = 3092.71 Telephone = 1715.81 Utilities = 3483.74

Total = $17,786.62 * 45% = $8,003.98


Total computer/EMR costs during the period i.e.: Ahlers Annual Fee +Comp Maintenances + Other Software Maintenance Fees

$ 8,791.13

Percent of computer/EMR costs attributable to vaccines + admin 45.00%

TOTAL COMPUTER/EMR COSTS $

3,956.01




Section D


Flu (admin + vaccine) is 45% of all revenue generated by Public Health Services only – do not include FP.

Our Example: Annual costs of the following expenses:Ahlers = $1,120.00 Centricity = $4,200.00 Computer Maintenance = $12,262.25 = Total $17,582.25

Total = $17,582.25 * 50%(6 months) = $8,791.13 * 45% = $3,956.01





Section D

Section E

TOTAL PROFESSIONAL LIABILITY INSURANCE Suggested at $0.37/Vaccination ***see note below $ 1,248.75

BILLING/COLLECTIONS COST - INITIAL ANTIGEN $ 14,056.81

TOTAL ADMINISTRATION EXPENSES - INITIAL ANTIGEN $ 50,752.01

Administration Cost Per Flu Shot $ 15.04

Current BCBS reimbursement rate for first administration $ 24.94

Liability Insurance calculation is taken directly from the original worksheet – we felt it was a fair calculation **NOTE: Professional liability insurance is calculated using the Medicare non-geographically adjusted standard of 0.01 professional liability insurance (PLI) relative value units (RVUs). The PLI RVUs were then multiplied by the 2010 Medicare conversion factor ($36.8729) to obtain the estimated professional liability insurance cost of $0.37 per vaccine administered.

$0.37 * 3375 total Vaccinations

Our Example: Billing Collection Costs = 16.7% Percentage of Net Revenue used by Billing Collection Staff * Current BCBC reimbursement Rate of $24.94( the assumption being the revenue is equal to the current reimbursement rate) * Total Vaccinations 3375 = Totals $14,056.81

Total Admin Costs = Personnel Costs for Scheduling + Personnel Costs for Data Entry + Personnel Costs for Triage + Personnel Costs for Administering Vaccine + Supply Costs + Rent/Utilities + Computer/EMR Costs + Liability Insurance Costs + Billing/Collection Costs

Admin Cost per Flu Shot = $50,752.01(Total Admin Exp’s) / 3375 ( Total # of Flu shots given)

$15.04 = Total Admin Expenses / # flu shots


The example to follow is for:Administration Fee

for Non-Flu Vaccinations

For the Period of Oct 1 – March 31, 2012

Non-Flu Administration Cost Calculator


% Of Net Revenues:

Our Example: 1.04 hrs. spent on non-flu per day (Time Study estimated hours) / 21.60 hrs.. available per day ( 3 staff = 2 @ 8hrs per day and 1 @ 5.6hrs per day) equals the 4.8%

% of claims denied/never paid:

Our example: Based on % of Insurance Collections And assuming Private Pay is 100% Collectible – we looked at what all insurancecompanies were billed versus the dollars we received.

COSTS RELATED TO ALL COLLECTIONSSection A

Percent of NET revenues used by the billing/collections staff, department, or service 4.8%

Percentage of all claims denied/never paid - 4.4%



Our Example: Admin Code 1st: 90471 & 90473(Nasal) = 229Admin Code: G0009 Med B Pneumonia = 3Admin Code Addt’l: 90472 & 90474(Nasal) = 68



Non-Flu Only

NUMBER OF VACCINES GIVENSection B

Total number of all vaccines administered during the period (e.g. CPT 90471, 90473, G0009) 232

Number of additional antigens administered during the period (e.g. CPT 90472, 90474 ) 68




Time Study: the amount of time in minutes it takes to process one administration of vaccine from the time a client walks in the door to the time the payment is posted whether it is self pay or insurance.

15For appointments for vaccines only (i.e. no doctor visit): number of hours spent by staff scheduling appointments, preparing charts, and checking in and out during the period

75

Average hourly wage of staff making appointments, etc. $ 13.94

Average fringe benefit percentage 45.00%

PERSONNEL COSTS FOR SCHEDULING, ETC. $ 1,515.98


Estimated 15 minPer client

Our Example:

Number of Hours = 300 (# of vaccines given) * (15 min per client / 60min)

Average Wage/Fringe = the average wage is for 3 front desk staff and the fringe is the overall average % for the facility

Personnel Costs = 75 hrs * (Salary + Fringe) = $1515.98

# hours * Salary + Fringe




Section C

Hours spent over the period entering vaccines into the registry (THOR). 6.1Average hourly salary of all staff entering vaccines into the registry (THOR).

$ 13.94 Average percentage of fringe benefits for the staff described above. 45.00%

PERSONNEL COSTS FOR ENTERING DATA INTO REGISTRY $ 123.97

Estimated 1 min -1st antigen and 2 min – 2nd antigen

Our Example: Number of Hours : 1min * 232 (1st antigen) + 2min * 68 (2nd antigens) = 368 min/60min = 6.1 hours

Average Wage/Fringe = the average wage is for 3 front desk staff and the fringe is the overall average % for the facility

Personnel Costs = 6.1 hrs * (Salary + Fringe) = $123.97





Section C

Number of hours staff spend on triage calls related to vaccines during the period 0.7500

Average hourly wage of staff answering vaccine related triage calls $ 26.58 Average percentage of fringe benefits for the staff described above.

45.00%

PERSONNEL COSTS FOR VACCINE TRIAGE CALLS $ 28.91

Estimated at 1% of Time for Appts = 1% x 75 hrs

Average Wage/Fringe = the average wage is for nurse time and the fringe is the overall average % for the facility

Our Example:

Personnel Costs = .75 hrs * (Salary + Fringe) = $28.91





Section C

Staff time (in minutes) administering vaccine (include distribution of VIS, answering questions, drawing up vaccine, administering the injection, and documenting it). Assume this is a single antigen vaccine. 3480.0

Additional staff time, per antigen, for multiple-antigen vaccines. 5.0

Average hourly salary of staff administering vaccine $ 26.58 Average percentage of fringe benefits for the staff described above.

45.00%PERSONNEL COSTS FOR ADMINISTERING VACCINE - INITIAL ANTIGEN $ 2,235.38 PERSONNEL COSTS FOR ADMINISTERING VACCINE - ADDITIONAL ANTIGEN $ 218.40

Estimated 15 min -1st antigenX 232

Estimated 5 min to administer addt’l antigens

Our Example

Average Wage/Fringe = the average wage is for nurse time and the fringe is the overall average % for the facility

Personnel Costs 1st Antigen = 3480 min/60 = 58 hrs * (Salary + Fringe) = $2235.38Personnel Costs 2nd Antigen = (5 min* 68) = 340 min / 60 = 5.67hrs * (Salary + Fringe) = $2235.38




Section D

Estimated cost of supplies per shot 0.29

Total cost of medical supplies $87.00

Cost of sharps containers annually $ 48.00

Percentage of sharps used in office that are vaccine-related 100%

Cost of disposal service annually $ 157.00

Percentage of disposal service for the period **** 8.00%

TOTAL SUPPLIES AND SHARPS DISPOSAL $ 103.40

Our Example: Cost of Supplies: Gloves 1 box of 100 @ $4.52 = $4.52/100 X 2 = $0.09Syringes 1 box of 100 @ $15.71/100 = $0.16 Cotton Ball = $.01Band-Aids 1 box of 100 @ 2.45/100 = $0.02 Alcohol Swab = $.01

Cost of Sharps Container: 8% * $48 = $3.84

Cost of Disposal = 8% of $157 = $12.56

Total Supplies = $87 + $3.84 + $12.56

8% = the percentage of Non-Flu admins / total admins given

during the time period

$87 = .29 * 300 vaccinations ( 232 - 1st + 68 - 2nd)




Section D

Total rent and utilities/janitorial during the period $17,786.62

Estimated percentage of rent and utilities attributable to vaccine-related appointments 10.53%

TOTAL RENT AND UTILITIES $1,872.93


Our Example: 6 Months of the following expenses:Rent = 9494.36 Janitorial = 3092.71 Telephone = 1715.81 Utilities = 3483.74Total = $17,786.62

Total Rent & Utilities = $17,786.62 * 10.53% = $1,872.93

10.53% = the percentage of Non-Flu revenue




Total computer/EMR costs during the period ie: Ahlers Annual Fee +Comp Maintenances + Other Software Maintenance Fees $ 8,791.13

Percent of computer/EMR costs attributable to vaccines 10.53%

TOTAL COMPUTER/EMR COSTS $ 925.71

Our Example: Annual costs of the following expenses:Ahlers = $1,120.00 Centricity = $4,200.00 Computer Maintenance = $12,262.25 = Total $17,582.25

Total = $17,582.25 * 50%(6 months) = $8,791.13 * 10.53% = $925.71


Section D

10.53% = Non-Flu Revenue / Total Public Services Revenue




Section ETOTAL PROFESSIONAL LIABILITY INSURANCE Suggested at $0.37/Vaccination $ 111.00

BILLING/COLLECTIONS COST - INITIAL ANTIGEN $ 277.73

BILLING/COLLECTIONS COST - ADDITIONAL ANTIGEN $ 40.11

TOTAL ADMINISTRATION EXPENSES - INITIAL ANTIGEN $ 7,526.15

TOTAL ADMINISTRATION EXPENSES - ADDITIONAL ANTIGEN $ 258.51

Administration Cost Per Non-Flu Shot $ 25.95 Current BCBS reimbursement rate for first administration $ 24.94

Current BCBS reimbursement rate for each additional administration $ 12.29

Liability Insurance calculation is taken directly from the original worksheet – we felt it was a fair calculation **NOTE: Professional liability insurance is calculated using the Medicare non-geographically adjusted standard of 0.01 professional liability insurance (PLI) relative value units (RVUs). The PLI RVUs were then multiplied by the 2010 Medicare conversion factor ($36.8729) to obtain the estimated professional liability insurance cost of $0.37 per vaccine administered.

Our Example: Billing Collection Costs = 1st Antigen - 4.8% Percentage of Net Revenue used by Billing Collection Staff * Current BCBS reimbursement Rate of $24.94 ( the assumption being the revenue is equal to the current reimbursement rate) * Total Vaccinations 232 = Totals $277.732nd Antigen - 4.8% Percentage of Net Revenue used by Billing Collection Staff * Current BCBS reimbursement Rate of $12.29 ( the assumption being the revenue is equal to the current reimbursement rate) * Total Vaccinations 68 = Totals $40.11

Total Admin Costs 1st Antigen = Personnel Costs for Scheduling + Personnel Costs for Data Entry + Personnel Costs for Triage + Personnel Costs for Administering Vaccine 1st Antigen + Supply Costs + Rent/Utilities + Computer/EMR Costs + Liability Insurance Costs + Billing/Collection Costs 1st Antigen Total Admin Costs 2nd Antigen = Personnel Costs for Administering Vaccine 1st Antigen + Billing/Collection Costs 2nd Antigen

Admin Cost per Flu Shot = ($7526.15 + $258.51) / 300 (232 - 1st Antigen + 68 2nd Antigens)

For our example we have chosen ZOSTAVAX

For the Period of Jan 1 – Dec 31, 2012

Vaccine Product-Related Cost Calculator

This spreadsheet can be used to calculate the cost associated with 1 dose of a specific vaccine.

Analysis Period: January 1, 2012 - December 31, 2012

Purchase price of vaccine per dose including shipping & taxes/fees 155.98$ Sales tax, if any (enter as a percentage) 0.00%Excise tax per dose 0.75$ TOTAL DIRECT COST 156.73$

DIRECT COST

Our Example: The purchase price is the actual cost per dose + any taxesfor the reporting period– this information will come directly from the invoice provided by your supplier. If the prices changes throughoutthe reporting period you could use an average of the total costs.





Percent of revenues used by the billing/collections staff, department, or service 4.80%Percentage of all claims denied/never paid (does not included provider discounts) 1.00%

PRODUCT-RELATED COSTS

Our Example: Estimated 1.0 hr. spent on Zostavax clients per day (Time Study estimated hours) / 21.60 hrs. available per day ( 3 staff = 2 @ 8hrs per day and 1 @ 5.6hrs per day) equals the 4.80%

Our example: Based on collections from Medicare D client co-pays and any coinsurances and deductibles from BCBS – this does not include provider discounts.

Med D was 57% of our total claims billed and BCBS was 35%.




Number of months to analyze (will be referred to below as "the period") 12Total number of all vaccines administered during the period 4,386

Number of doses of vaccine in question administered during the period 86

Hours spent ordering vaccines and monitoring vaccine storage and inventory during the period 130.50Hourly wage of staff ordering and monitoring storage and inventory 15.36Average percentage of fringe benefits for the staff described above. 55%PERSONNEL COSTS TO ORDER AND INVENTORY VACCINES 0.25$

PRODUCT-RELATED COSTS




Total # of ALL ( Flu and Non-Flu) Vaccinations given during this period.

Total # Zostavax given

Our Example: Hours Spent - we used a time study from one front desk staff that is very involved with the vaccine inventory and monitoring. You could use any staff ( including RN’s) that are involved with this process.


Purchase price of refrigerator/freezer, alarm/temperature monitoring device, generators in case of power outages $ 17,794.16

Cost of electricity attributable to vaccine storage refrigerator during the period 686.44

STORAGE COSTS** $ 0.97




Purchase costs of Vaccine

Fridges/Freezers& Generator

With in the last 5 years

Our Example: Included the purchase costs of 1 Vaccine Fridge, 1 Vaccine Freezer and the cost of a facility generator plus installation – these are depreciated over 5 yrs., then they can be removed from the cost of the vaccine calculator

Cost of Electricity – this is an estimate based on the total Zostavax gross revenue divided by the public health total revenue * the annual electric costs i.e.: 8% * Estimated annual electric costs of $8580.00


Annual cost of insurance on vaccine inventory $ 200.00

Total value of current vaccine inventory - All + cost of Universal $ 17,265.00 Number of Doses on hand for the vaccine in question 12.00

Total value of inventory of vaccine in question $ 1,880.76

INSURANCE COSTS AGAINST VACCINES ORDERED $ 0.2533




This should be found on your facilities policy

The total value of ALL vaccines in your inventory at period end. Include even if they are part of the Universal Coverage

Program

# of does on hand at the period end.

Our Example: 12 Doses of Zostavax on hand * the cost of $156.73 = $1,880.76Total Value of Inventory: THOR report – or any method you use to track your vaccine inventoryInsurance Cost Calculated Field: Annual Insurance Cost- 200.00 * ( Vaccine Value – 1880.76 / Total inventory value – 17265.00) * (# Months in example used for the example-12months / 12) / # doses administered-86) = 25 cents per dose


Percentage of doses wasted or for which a bill is never created (i.e. forgotten, etc.) 0.0%

WASTE/UNBILLED/DENIED $ 1.58




Our Example: % Wasted – it was decided with Zostavax there is not waste unless there would be a fridge outage or something similar.

Waste/Unbilled/Denied Cost: Total Direct-156.73 / (1 – (Wasted %-0% + % Not Collected-1%) - Total Direct-156.73 = 1.58

Calculated Field


Reasonable annual return on investment (enter as a percentage) 1.0%Average number of days from vaccine purchase to vaccine administration 20Days of A/R for practice (average days between appointment and payment) 26

OPPORTUNITY COST $ 0.20

Our Example: Return on Investment – look at the current market percentageson your investments accounts – savings, checking, CD’s, etc.

Average days – estimate the number of days from when the vaccine arrives toWhen it is administered.

Days of A/R – estimated days from the time the vaccine is administered to when It is paid. Use an average since each payor is different




Calculated Field


BILLING/COLLECTIONS COST $ 9.03

TOTAL OVERHEAD COSTS (in dollars) $ 12.28 TOTAL OVERHEAD COSTS (as a percentage of direct cost) 7.8%

Total Vaccine Cost + Overhead Costs $ 169.01

BCBS Reimbursement Rate $ 171.27

Med D - using TransActRX - Average Reimbursement $ 171.64

Medical Assistance Reimbursement $ 180.00

Calculated Fields




Reimbursement Rates at the time

of the analysis

Our Example: It costs $169.01 for one dose of Zostavax to be housedIn the facility – based on the current reimbursements – estimated profits per dose would be BCBS - $2.26, Medicare Part D - $2.63 and Medical Assistance - $10.99

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Cost Analysis Examples Presented January 8 th, 2014