CG 9.1 Scope
CG 9.1.1 This Costing guideline provides outlines an approach to cost Mental Health encounter activity.
CG 9.1.2 This Costing guideline also provides practical steps and examples to guide staff on the patient costing process for these activities.
CG 9.1.3 This Costing guideline encompasses admitted mental health and community mental health encounters. Mental health services may take place in admitted, ambulatory, emergency department or residential settings.
Mental health scope
CG 9.1.4 A hospital or organisation that is costing Mental health products will identify all expenses that meet the definition of the mental health care, including services provided as assessment only activities. Costing practitioners should also consider expenses incurred for the provision of:
- residential mental health care services,
- ambulatory mental health care services, and
- inpatient services.
CG 9.2 Objective
CG 9.2.1 The objective of this Costing guideline is to guide costing practitioners of the end to end steps required to ensure that all mental health activities and expenses contributing to the day to day production of mental health services are included in the patient costing process to determine the full cost of production.
CG 9.3 Costing guideline
Step 1: Stakeholder identification and service scale and scope
CG 9.3.1 Costing practitioners should be aware of the scope, counting rules and classification of mental health services.
CG 9.3.2 Costing practitioners should meet with Mental Health stakeholders and Finance Department stakeholders to identify both the expense and activity related to the Mental Health services and to familiarise themselves with the overview of the operation of the Mental Health services in the organisation.
CG 9.3.3 Within a hospital, Mental Health services may be reported by their service settings, these include:
- Admitted patient services in public psychiatric hospital and public acute hospitals with specialised psychiatric units or wards.
- Ambulatory/Community mental health care services.
CG 9.3.4 This includes all mental health services/activities delivered by ambulatory specialist mental health service units (for example, crisis or mobile assessment and treatment services, day programs, outreach services); all mental health services delivered by inpatient or residential specialist mental health service units to non-admitted and non-residential clients; and all client related activities delivered by specialist mental health consultation liaison teams.
- Residential mental health services.
CG 9.3.5 Cost practitioners must identify all expenses associated with mental health services and create a separate cost are to record these. A key resource in doing this may be to review the organisational chart structure to obtain a list of all mental health programs available in the hospital/entity.
CG 9.3.6 This information can be used to identify and to work with relevant stakeholders to define the expense of each Mental Health final cost centre.
Step 2: Align expense to the mental health service department and define overhead and direct expenses, including overhead allocation methods
CG 9.3.7 Programs and cost centres identified by and consulted with stakeholders need to be mapped to the mental health units for costing purposes. It is important to note that some ward/clinics/Mental health programs do not normally have a one to one mapping to a cost centre code. Expenses may need to be moved to/from other cost centres.
CG 9.3.8 In consultation with stakeholders, agreement should be reached on the methods and assumptions to transfer expense from or to other products.
CG 9.3.9 An example of where this occurs is electroconvulsive therapy (ECT). ECT is a common procedure for patients in specialist mental health is regarded as high cost treatment. Generally, ECT is administered only to clients that are admitted to hospital, it may be done for community mental health that are generally a same-day patient admission.
CG 9.3.10 These expenses may be reported against the Operating Room. Costing practitioners should move these expenses to separate SPS final cost centres so that they can be mapped and costed accordingly. The full cost of administering ECT should be included in the designated final cost centre and may include:
- labour cost of medical health specialists, anaesthetists, nurses and other supporting staff
- depreciation of medical equipment and devices used in the procedure.
- consumables and drugs.
CG 9.3.11 Many hospitals/organisations do not collect patient level data in their ambulatory/Community mental health care services. Costing practitioners may consider the use of product fractions to move cost across program/product type.
CG 9.3.12 A key driver of mental health costs relates to the provision a secure environment for the treatment of forensic mental health patients. These additional costs have been attributed to need for strict protocols, and mental health legislative requirements.
CG 9.3.13 Costing practitioners should work with their mental health stakeholders to understand the resources required to treat an involuntary patient. Such patients will have specific statutory requirements that will influence treatment and administrative resources used.
CG 9.3.14 Expenses for Consultation Liaison services to or from Mental Health units should be appropriately defined.
CG 9.3.15 Consultation Liaison includes services provided by specialist mental health clinicians as:
- consultation services by providing an opinion to the patient’s/client’s primary clinician; and
- liaison services by discussing the case of a patient/client with the patient’s/client’s primary clinician.
CG 9.3.16 Expenses for these services provided to and from the hospital or organisation need to be identified and linked with the hospital’s/organisation’s products.
CG 9.3.17 Attention should be provided to Consultation Liaison services that are provided as an outreach service. Whilst the process of expense identification should follow the same processes as other mental health services, further discussion may be required to ensure that activity is captured to enable expense alignment to activity and the ability to allocate costs.
CG 9.3.18 Costing practitioners should utilise the costing system or another medium to document all information used as the basis to identify and align mental health expense, including:
- the classification of expense into the Mental Health final cost centre;
- the stakeholders met with;
- the date of the meeting; and
- a date for future review of Mental Health expense alignment.
CG 9.3.19 Hospital overheads need to be allocated appropriately to the mental health final cost centre. However, where a hospital has identifiable Mental Health service related overhead expenses, such as Mental Health Administration, these must be allocated solely to the Mental Health final cost centre.
CG 9.3.20 Mental health services often receive support services from an auspice organisation; if these support services are essential to the production process, then hospital need to ensure that these expenses are included as third party expenses and brought to account in the costing process.
Step 3: Identify patient level activity and mental health feeder data and perform quality assurance checks
CG 9.3.21 Costing practitioners should refer to IHPA’s Australian Mental Health Care Classification version 1.0 User manual for guidance and understanding on the classification and reporting of the Mental Health activities. Costing practitioners should also note that Mental health services in each Jurisdiction are regulated by Jurisdictional legislation and guidelines and must ensure that these are considered for different reporting purposes.
CG 9.3.22 Given the statutory requirements of mental health services, many systems already exist that may act as feeders for costing purposes. Common mental health feeder systems should capture and report amongst other items, the following fields:
- the patient’s unique identifier;
- the patient unique episode identifier;
- the phase of care
- Program code;
- the date of service;
- multiple health care provider indicator;
- provider type;
- the time into and out of the unit; and
- other patient demographic factors such as sex and age.
CG 9.3.23 Costing practitioners should perform quality assurance checks on the mental health extracts prior to the costing process. For example, checks should be made on the date of service (to test reliability to remove error dates, check time into and out of the unit, and ensure dates are relevant to the period being costed). If ward/appointment duration is used as a cost driver, checks should be performed to ensure that the duration of the service event is reasonable.
Step 4: Creating and mapping mental health service costing products or intermediate products
CG 9.3.24 Intermediate products are created for services listed in the feeder. Once the intermediate products are created, costing practitioners will be required to ensure these are mapped in the costing system to the appropriate cost centre. For example, services in a secluded inpatient ward intermediate product.
CG 9.3.25 ‘Ward 3North-Sec-Nursing’, where ‘Ward 3North’ describes the ward, ‘Sec’ describes the function in this case seclusion and ‘Nursing’ the treatment type. In this example the intermediate product would be used to define the nursing resources used to care for patients on this ward
CG 9.3.26 Aggregated (dummy) episode records and intermediate product codes may be created for a cost centre or mental health program with no feeder system or patient-level activities.
Step 5: Apply Relative Value Units
CG 9.3.27 Costing practitioners may wish to consider the following methods for allocating expenses to Mental Health service events:
- Actual duration;
- Average/Weighted time in ward/clinic;
- Traceable cost/charges (for example, charges on outsourced services)
- Relative Value Unit (RVU) derived within or outside hospital.
CG 9.3.28 To demonstrate the relative cost of service provision within the mental setting, costing practitioners should consider developing and/or applying RVU’s which consider the following factors to demonstrate the type of services offered (which are generally the intermediate product build) and the relative resource intensity required for each:
- Consumer related factors – such as diagnoses, complications and comorbidities, symptoms severity, function and ethnicity.
- Service/Setting types: such as face to face vs telephone, group settings, multiple health care providers, seclusion.
- Treatment types: for example, administration of ECT, psychological therapies, pharmacotherapies.
- Legal status, safety and emergency care; For example, voluntary vs involuntary patient, mechanical or physical restraint.
- Chronic disease management
- Remoteness of Clinic or location of service
Step 6: Create intermediate product costs in final cost centres
CG 9.3.29 Two allocation processes are performed:
- When overhead costs are allocated to the Production Cost Centre (using an appropriate allocation statistic)
- When the Production Cost Centre costs (overhead and direct) are allocated to the intermediate products.
Step 7: Match intermediate products and their costs to mental health patient activity
CG 9.3.30 Mental health patients will consume resources from other hospital departments, such as imaging, pathology, pharmacy, and allied health on their journey of care. The consumption of these resources represent the production function of output.
CG 9.3.31 Costing practitioners must ensure that services from other departments provided to mental health patients are matched appropriately to the encounter/service event.
Step 8: Report costs
CG 9.3.32 Costing practitioners should then perform the required steps to consolidate and report costs of the mental health activity
CG 9.3.33 This data should be reported as per the relevant mental health counting rules (such as episode or phase of care level).
CG 9.3.34 Some encounters may occur in more than one financial year. Costing practitioners should ensure that all cost are assigned and accumulated over periods for the complete encounter.
Step 9: Cost data review with relevant stakeholders
CG 9.3.35 Costing practitioners should meet with their relevant Mental Health stakeholders to report on the costs calculated.
CG 9.3.36 Cost data should be reviewed for amongst other checks cost relativity classification and resource completeness per service event to decipher if the cost data captures resources that have been provided at service event level.