Avoid Rejection: Make Sure Your Medicare Cost Report is Properly Completed

December 10, 2019 Alerts and Newsletters

As the calendar year draws to a close, hospitals with a 9/30 fiscal year end are working intensely on completing their FY 2019 Medicare cost reports. This seemed like a good time to remind everyone of some of CMS’s more recent stringent cost reporting requirements. In many cases, a MAC will reject a cost report for lack of supporting documentation, especially in the following areas, which CMS addressed in Medicare Learning Matters No. SE19015.

Bad Debt

  • A cost report will be rejected if it does not include a detailed bad debt listing that corresponds to the amount of bad debt claimed on the cost report.

DSH Hospitals

  • Initial cost report: The cost report will be rejected if it does not include a detailed listing of Medicaid-eligible days that corresponds to the Medicaid-eligible days claimed on the cost report.
  • Amended cost report: Several years ago, CMS stated that hospitals could submit one amended cost report, submitted within 12 months after the initial cost report due date, for the sole purpose of revising Medicaid-eligible days after the hospital receives updated Medicaid-eligible patient day information from the state. There are three requirements to take advantage of this opportunity to avoid the cost report being rejected. The hospital must:
  1. Identify the number of additional Medicaid-eligible days claimed in the amended cost report;
  2. Describe the process used to identify the days that were claimed in the initial cost report; and
  3. Explain why the additional Medicaid-eligible days could not be verified at the time the initial cost report was filed.

Charity Care and Uninsured Discounts

  • A DSH-eligible hospital’s cost report will be rejected if it does not include a detailed listing of charity care and/or uninsured discounts that corresponds to the amounts claimed on the hospital’s cost report. Until CMS adopts a standard format, a hospital also must submit a charity care and/or uninsured discount list that supports the amounts in its cost report, including the patient name, dates of service, other insurer (if applicable), and the amount of the charity care and/or uninsured discount.

Home Office Cost Allocations -

  • A hospital’s claim on its cost report for costs that are allocated from a home office or chain organization will be rejected if a home office cost statement is not submitted to the MAC that corresponds to the amounts allocated from the home office to the hospital.

Teaching hospitals

  • The cost report will be rejected if it does not include the Intern and Resident Information System (“IRIS”) data.

Protested items

  • As a reminder, to be eligible for reimbursement, any costs or other data must either be claimed on the cost report or included as a protested item. This would include issues such as disagreeing with the IPPS standardized amount or including Part C days in the Medicare/SSI fraction.

If you have any questions or wish to discuss Medicare cost reports in more detail, please reach out to Gary A. Rosenberg, Cecilie H. MacIntyre, William H. Stiles, or your regular Verrill attorney.

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