HERC: Managerial Cost Accounting (MCA)
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Managerial Cost Accounting (MCA)



The Managerial Cost Accounting System (MCA, formerly Decision Support System, DSS) is an activity based cost allocation system that generates estimates of the cost of individual VA hospital stays and health care encounters since federal fiscal year (FY) 2001. MCA consists of a set of programs that uses relational databases to provide cost and other information needed by managers and clinicians. There are several MCA data sources available: National Data Extracts (NDEs), department-level datasets (ALBCC, MPCR), discharge-level database with subtotals for cost and length of stay, and web reports.

You can use the MCA data to identify health care costs and cost components for each inpatient or outpatient health care encounter in the VA Health Care System. Because the MCA data do not contain detailed clinical information, such as procedures and diagnoses, researchers need to merge the MCA data to VA health care encounter files, such as the CDW, MedSAS, or OMOP utilization files.

MCA National Data Extracts (NDEs)

VA creates MCA National Data Extract (NDE) files with the cost of each VA hospital stay, outpatient visit, and dispensed outpatient prescription. Data are now available at the VA Corporate Data Warehouse (CDW) for all care provided by VA since 2001.

HERC has written a guidebook on the MCA cost NDEs: inpatient discharge (DISCH), inpatient treating specialty (TRT), observation treating specialty (OBS), and outpatient (OUT, OUT2), including how MCA estimates cost.

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A brief overview of common NDEs is below. The full list of NDEs with descriptions and variable lists is available on the NDE page of the MCAO SharePoint site.

Common NDEs
NDE Full Name Description
ALBCC Account Level Budgeter Cost Center This NDE contains department level labor hours and costs.
CLI Clinic Costs for inpatient and outpatient services provided during each clinic visit.
DDC Denver Distribution Center This NDE is a prosthetics database in which each record is a prosthetic item shipped to a patient by the Denver Acquisition and Logistics Center, formerly known as the Denver Distribution Center.
DISCH Inpatient Discharge This NDE is the inpatient cost dataset. Each record includes all of the costs associated with an inpatient discharge. Data that span multiple fiscal years are associated with the year in which the patient was discharged. This dataset does not include patient diagnostic information, but can be merged to the Medical SAS inpatient datasets (i.e., Patient Treatment Files, PTF).*
LAB Laboratory This NDE provides details on laboratory tests that have been performed on a patient. This is sometimes referred to as the "fact-of-lab". It includes information about which test was performed, the date of the test, and its cost, but not the test results.
OUT Outpatient This NDE includes outpatient costs per clinic stop per day. This dataset does not include patient diagnostic information, but can be merged to the Medical SAS, CDW or OMOP outpatient datasets (Note: Use both OUT and OUT2 NDEs to ensure you don’t miss any encounters.)*
OUT2 Outpatient, No Cost Visits This NDE is similar to the OPAT NDE, but it includes zero-cost encounters. This dataset includes almost all of the outpatient care recorded in the Medical SAS outpatient datasets (i.e., National Patient Care Database) that is not recorded in the MCA OUT NDE. (Note: Use both OUT and OUT2 NDEs to ensure you don’t miss any encounters.)
PHA Pharmacy This PHA NDE provides detailed information on the drugs used by patients. It contains a single record for each pharmacy item and includes inpatient and outpatient drugs. The cost data from the PHA NDE are included when creating the inpatient (DISCH) and outpatient (OUT) datasets.*
RAD Radiology This NDE reports detailed information on radiological procedures. It includes information on the type, cost, and number of individual procedures. This included data captured in the Diagnostic Radiology and Nuclear Medicine Departments for which there are costs reported.
RAI Resident Assessment Instrument This NDE divides nursing home stays into segments per fiscal year based on the RAI score. Clinical staff in the nursing home gauge a resident’s needs and strengths using the RAI.
SUR Surgery This NDE provides detail on surgeries. Included is all care recorded in the VistA Surgery package. It excludes cancellations and aborted cases.
TRT Treating Specialty This NDE includes costs for inpatient care with one record for each patient for each treating specialty visited per fiscal period (month). HERC has created a discharge view of these data, so that there is a subtotal of different types of inpatient care; see Discharge Dataset with Subtotals.
WARD Ward This NDE provides details on the wards during inpatient stays.

*Pharmacy costs in PHA vs OUT vs DISCH: A patient who filled an outpatient prescription would be coded as having visited the "pharmacy clinic." All visits to the pharmacy clinic on the same day would be rolled into a single record. Individual inpatient prescriptions cannot be distinguished from other aspects of stays in the inpatient NDE, although there are aggregate pharmacy cost variables for the entire stay. The PHA NDE contains a single record for each pharmacy item and features a significant amount of detail on medication and dispensing details.

MCA Department-Level Cost Datasets

MCA creates two department-level cost datasets: the Account Level Budget Cost Center (ABLCC) NDE and the Monthly Program Cost Report (MPCR). The ALBCC NDE can be used by researchers to assign indirect costs when the direct costs of an intervention have been determined by micro-costing. It can also be used to find VA labor costs for a particular type of staff within a particular type of patient care department. The MPCR is used to estimate the costs of care for the VHA VERA budget model. MPCR excludes certain costs that are not distributed via this budget model, limiting its usefulness for many economic studies.

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MCA Discharge Dataset with Subtotals

HERC began producing a new MCA Discharge dataset beginning fiscal year (FY) 2007 that is identical to the MCA Discharge file with the exception of additional fields containing cost and length of stay subtotals for 13 inpatient categories of care: Acute Medicine, Rehabilitation, Blind Rehabilitation, Spinal Cord Injury, Surgery, Psychiatry, Substance Abuse, Intermediate Medicine, Domiciliary, Nursing Home, PRRTP, ICU, and Unidentified Treating Specialty. The categories of care represent our groupings of common bed sections.

Proc Contents for MCA Discharge File with Subtotals, FY2010-FY2020
MCA Data FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Discharge with subtotals X X X X X X X X X X

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MCA Web Reports

The MCA web reports combine clinical and financial data to produce information at the patient-level. The MCA web reports are in the following categories: clinical user support, financial user support, analytics reports, and cubes and briefing books. See the VHA Data Portal for more information (VA intranet only: http://vaww.vhadataportal.med.va.gov/DataSources/MCA(formerlyDSS)WebReports.aspx).


MCA NDEs are stored at the VA Corporate Data Warehouse (CDW). Access to the MCA NDEs and HERC discharge file with subtotals is described on the VHA Data Portal (VA intranet only: http://vaww.vhadataportal.med.va.gov/DataSources/MCA(formerlyDSS)NDEs.aspx.

Access to the MCA web reports is described on the VHA Data Portal (VA intranet only: http://vaww.vhadataportal.med.va.gov/DataSources/MCA(formerlyDSS)WebReports.aspx).

Validity of MCA Data

Researchers are encouraged to use MCA data for healthcare studies because MCA data have been shown to be valid with respect to several important categories of care and cost analyses. For example, encounter-level cost estimates from MCA sum to total VA expenditures. In addition, utilization in the MCA national data extracts have been shown (for FY2004 data) to link almost perfectly with utilization in VHA discharge and outpatient data sets after adjustments in database design are made. Moreover, annual person level costs according to MCA are similar to HERC annual person-level estimates. There is similar concordance between MCA hospital and outpatient costs.

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On the other hand, although MCA data have been audited internally, the database may not be fully accurate and complete. Researchers should carefully examine the data before using it. Some care may not be recorded as care that can be assigned a cost by MCA. The cost of medical procedures provided to inpatients, including cardiac catheterization, endoscopy, and other procedures, may not be assigned to the patient who had the procedure, but distributed to all patients in proportion to their length of stay. This problem is diminishing as medical centers improve the way in which they record these procedures.

A second issue is occasional records with outlier cost amounts. If a direct service department has very little or no workload (volume) and costs are not adjusted accordingly, the unit costs for services in that department can be extremely high. For outpatient pharmacy costs, researchers should pay attention to outliers. HERC examined any clinic encounter that cost $100,000 or more as an outlier. In FY2004, there were 47 outliers (86 in FY2003) in the pharmacy records and 121 outliers (123 in FY2003) in the clinic file. Most (37%) of the non-pharmacy outliers were attributed to prosthetics service.

The above issues do not suggest that the MCA data are not good for healthcare studies. In most cases, the issues are concentrated in a small number of VA stations. In addition, the quality of MCA data has substantially improved over time, and MCA staff are working continuously to improve data quality.

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Transition Systems, Inc. (1995). Information Tool Kit Participant's Guide. Transition Systems, Inc. One Boston Place, Boston, MA 02108

Last updated: February 22, 2024