More on Weighted Averages

Katie Lapins, Senior Compliance Specialist
katielapins@cis-partners.com

I hope this is the last time we talk about this subject for a while… Here’s another oxymoron as a result of the DRA – I stand corrected, but I was right! (I’m still trying to figure out how this can happen…)

Mathematical geniuses, far greater than I, have labored over the calculations and determined that CMS’s response in their Q&A document regarding weighted averages does actually use the number of units as the weight.

AMP Calculations for Q1 Monthly’s

January: 300 Net AMP units / $1,500 Net AMP dollars = $5.00 AMP
February: 400 Net AMP units / $2,800 Net AMP dollars = $7.00 AMP
March: 600 Net AMP units / $3,300 Net AMP dollars = $5.50 AMP

Quarterly Calculation:

As defined by CMS

$1500 + $2,800 + $3,300 = 7,600 = $5.846 AMP
300 + 400 + 600 1,300

Weighting (traditional thinking)

Month 1: $5.00 * (300 Jan units / 1300 Total units) = 1.1538
Month 2: $7.00 * (400 Feb units / 1300 Total units) = 2.1538
Month 3: $5.50 * (600 Mar units / 1300 Total units) = 2.5385

1.1538 + 2.1538 + 2.5385 = $5.846 AMP