Hospital nursing costs, billing, and reimbursement

Area of Science:

• Healthcare Management
• Nursing Economics
• Hospital Administration

Background:

• Current hospital billing often uses fixed room and board charges that may not accurately reflect the cost of nursing care.
• Understanding the direct costs of nursing care is crucial for accurate financial management and reimbursement.

Purpose of the Study:

• To compare nursing intensity, direct nursing costs, and daily billing across medical and surgical units.
• To evaluate the alignment between direct nursing costs and current hospital billing practices.
• To propose an alternative nursing-centric financial model.

Main Methods:

• A comparative analysis of nursing intensity, direct nursing costs, and daily billing was conducted.
• Data were collected from 12 adult medical or surgical units at an academic medical center over a 5-month period (22,649 patient days).
• Statistical analysis was used to compare costs between private and intermediate room rates.

Main Results:

• Nursing intensity and direct nursing costs exhibited high variability within and across units (mean $429, SD $160).
• Direct nursing care costs were significantly higher for private rooms ($441) compared to intermediate rooms ($426) (p < 0.001).
• A significant misalignment was found between the direct costs of nursing care and current hospital billing practices.

Conclusions:

• Direct nursing care costs are not aligned with existing fixed room and board billing practices in U.S. hospitals.
• Current billing models may be obsolete for accurately accounting for nursing care expenses.
• An alternative nurse-centric costing, billing, and reimbursement model is proposed to address these discrepancies.