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Completing an Abbreviated Cost Analysis Toolkit

Toolkit/Guide
Cost Analysis Financial Management

Welcome to the Toolkit

Cost analysis is a process that allows Title X grantees and subrecipients to determine their true cost of services provided to family planning clients. As expenses and utilization will vary from year to year, it is recommended to perform a cost analysis annually to analyze the cost of services. A cost analysis helps Title X grantees and subrecipients to:

  • Inform full fee establishment/updating process for each service provided by a Title X-funded project;
  • Determine if the cost of services is on par with Medicare and third-party payer reimbursement rates;
  • Measure clinician productivity;
  • Demonstrate compliance with Title X Program regulations, which state, “For persons from families whose income exceeds 250% of the FPL, charges must be made in accordance with a schedule of fees designed to recover the reasonable cost of providing services. (42 CFR 59.5(a)(8)).”

Title X agencies commonly use the Focused Cost Analysis (FCA). This toolkit outlines the Abbreviated Cost Analysis, a streamlined approach based on a simple expense worksheet which does not include labs due to their low costs and relative value units (RVU).

 

Illustration of a woman with her back to us holding a calculator.

The toolkit is organized sequentially into three sections:

  • Planning for a Cost Analysis
  • Conducting a Cost Analysis
  • Using Cost Analysis Data

The resources can be used in any order according to an agency’s needs and priorities.

Title X grantees and subrecipients conduct cost analyses differently. Grantees may require a certain cost analysis format and the frequency of when/how often it is completed. Further, they may:

  • Conduct a cost analysis for all service sites over which they have financial control;
  • Provide subrecipients with an Abbreviated Cost Analysis template, pre-loaded with network specific data (e.g. Medicaid and Medicare rates, relative value units (RVU)s per current procedural terminology [CPT]); or
  • Allow subrecipients to complete their own version of a cost analysis and report data to the grantee.

Grantees should support subrecipients by interpreting cost analysis data and/or providing guidance regarding how the data can be used/interpreted. If a grantee plans to provide analysis based on the network’s results to allow for accurate comparisons and network averages, all sites in a network should utilize the same cost analysis method.

 

Grantee and subrecipient staff who will be involved in the cost analysis should have a shared understanding of the terms, timeline, data elements, and methodology being used. Collecting all cost and utilization data prior to completing the Abbreviated Cost Analysis workbook may save time.

Action Steps Supportive Resources

Orient all grantee and subrecipient staff who will conduct a cost analysis.

Key Terms for Completing a Cost Analysis

How to Conduct an Abbreviated Cost Analysis

Abbreviated Cost Analysis Workbook

Gather family planning cost (staff and program) data from accounting software.

Time Study Workbook

Weekly Time Sheet Workbook

Gather utilization data (CPT codes and volume) from electronic health record.

Gather the following information:

  • RVUs data
  • Geographic Practice Cost Indices (GPCI)
  • Medicare Conversion Factor (MCF)

Note: information can be gathered as time permits and information is available. It does not need to be gathered all at the same time.

 

There are four tabs in the Abbreviated Cost Analysis workbook:

  1. COST CALCULATION: expense, or “cost” data required
  2. UTILIZATION: utilization data required
  3. RVUs: pre-populated with CMS RVU values for commonly used CPT codes
  4. GPCIs: pre-populated with GPCI values that allow for location-specific analysis.

Data in the RVUs and GPCIs tabs are from 2019 and must be updated in subsequent years.

Action Steps Supportive Resources

Input cost data into the Cost Calculation tab of Abbreviated Cost Analysis Workbook.

Abbreviated Cost Analysis Workbook

How to Conduct an Abbreviated Cost Analysis

As needed, input updated in the Abbreviated Cost Analysis Workbook:

  • RVU data
  • GPCI data
  • MCF data

Note: information can be inputted as time permits. It does not need to be inputted all at the same time.

 

A Title X grantee and/or subrecipient may take any of the actions listed below once a cost analysis is completed.

Action Steps Supportive Resources

Document pertinent CPT reimbursement rates and charges, and interpret cost analysis results.

Abbreviated Cost Analysis Workbook

How to Conduct an Abbreviated Cost Analysis

Recommended Analyses Utilizing Cost Analysis Results

Inform full fee establishment/updating process for each service provided.

Setting a Full Fee Schedule

Develop or revise sliding fee discount schedule based on new full fee schedule.

Adjusting an Agency’s Sliding Fee Discount Schedule

Measure clinician productivity.

Using RVUs to Calculate Clinician Productivity

Provide analysis and/or technical assistance to subrecipients.

Recommended Analyses Utilizing Cost Analysis Results

Using Cost Analysis to Support Quality Improvement Job Aid and Workbook

Conduct project management.

 

Using Cost Analysis to Support Title X Project Management

  1. The Focused Cost Analysis (FCA) is a method for conducting a cost analysis developed by George “Gerry” Christie and the FPNTC.