Using the direct to encounter method
With the direct to encounter (D2E) method, you can create and track cost items for non-chargeable items or services. You can directly cost departments that do not generate patient revenue but incur expenses in response to patient activity using D2E. Examples might include robotic surgical time or central scheduling.
D2E allows you to spread costs that were historically allocated as indirect overhead to specific encounters that utilize the services of that particular department. Examples of indirect costs include patient access, business office, medical records, case management, and insurance pre-certification departments. D2E spreads these costs as a direct cost rather than an indirect cost to those selected encounters.
There are two steps to implementing the D2E method in Axiom:
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In the RVU maintenance page, add the pseudo cost item (which is automatically created when you add the D2E definition) to the department, and enter the RVU values.
After you create a D2E definition, Axiom then creates a pseudo cost item to the cost item table in the database. It is referred to as "pseudo" because it technically does not exist in the cost item table and is only used to charge for items that are non-chargeable. For more information, see the next section.
About pseudo cost items and D2E
Axiom assigns a pseudo cost item to the departments and encounters that have been identified as D2E departments, along with encounters receiving services from these departments. This pseudo cost item allows you to charge for items that are non-chargeable. The encounters that ultimately receive this allocated cost are identified by a statistic that dictates the allocation. For example, the Patient Access department may be an inpatient-only service that touches every inpatient equally. The statistic in this example is a 1 for every inpatient; the resulting allocation simply takes any inpatient and gives them an equal cost of the Patient Access department.
TIP: It may not make sense to spread costs equally to encounters for some departments, so it is important to review each department separately to determine the best method to gather the set of encounters that will receive the costs. For example, Medical Records requires more effort for inpatients, emergency room visits, and observation cases than it does for labs and outpatients. The total charges may be an appropriate measure to allocate Medical Records net expenses to all cases since any registered patient has contact with this department. More effort may be placed, however, in transcribing for inpatients, emergency room cases, and observation cases, which results in more cost to cases with higher total charges.
