Alert

Proposed Changes to the Medicare Cost Report and Instructions

On Tuesday, November 10, 2020, The Centers for Medicare & Medicaid (CMS) issued a Federal Register notice required under the Paperwork Reduction Act (PRA) of 1995 announcing an opportunity for the public comment to CMS’s “intention to collect information from the public.”

The information to be collected from this particular notice is associated with the CMS-2552-10 Hospital and Health Care Complex Cost Report and covers a wide range of Medicare cost report topics.

On the CMS website, there’s a link for a zip file with proposed supporting documents. Once you click on that, you’ll find the following:

  1. Supporting Statement for Form CMS-2552-10
  2. Chapter 40 Hospital and Hospital Health Care Complex Cost Report Form CMS-2552-10 in the Medicare Provider Reimbursement Manual (PRM)
  3. Draft of Form CMS-2552-10
  4. Crosswalk detailing the updates and information to be collected

This alert will briefly touch on several of the changes, but not all. Please refer to the CMS website to see all PRM changes covered by this action.

Next Steps: Public Comments

There are significant additional reporting requirements for this proposal and providers are encouraged to review all supporting documents carefully and if appropriate make comments.

Comments regarding these proposed changes and collection activities, including the effort needed to comply, should be submitted no later than January 11, 2021. Instructions for submitting comments are included in the Federal Register notice.

Proposed Changes to Medicare Cost Report

The proposed revisions and additions include changes to the PRM cost reporting instructions and changes to the cost reporting form, including new worksheets and supporting data templates. Changes touch the following cost report worksheets:

Worksheet S-2, Part I: New Exhibit 3A—Listing of Medicaid Eligible Days for DSH Eligible Hospital

Effective with cost reporting periods beginning on or after October 1, 2018, hospitals were required to submit a listing supporting Medicare Disproportionate Share Hospital (DSH) eligible days claimed in the cost report at the time of submission. Failure to do so would result in the rejection of the cost report. However, CMS offered no standardized format for submitting the required data. That is being changed here.

In addition to revisions in reporting Medicare DSH eligible days data on Worksheet S-2, Part I lines 24 and 25, columns 1-6, CMS has now presented a standardized format to submit the patient level detailed information. This can be found in the new Exhibit 3A and is required for cost reporting periods beginning on or after October 1, 2020. Note, patient-level detail is required for each category of days reported on lines 24 and 25, columns 1 through 6.

The new exhibit, which is found on page 54 of the CMS PRM Chapter 40, has 18 columns and includes the following data points:

  • Patient name, last and first
  • Date of birth
  • Gender
  • Medicaid ID number (particularly for paid claims)
  • Dates of service, admit and discharge
  • Medical record number
  • Account number
  • State eligibility code
  • Medicaid days, eligible days and labor and delivery room days
  • Insurance or other payer, primary and secondary
  • Medicare eligibility, type, start and end dates
  • Comments

Worksheet S-2, Part II: Exhibit 2A—Listing of Medicare Bad Debts

A listing for Medicare bad debts has been required for years and for cost reporting periods beginning on or after October 1, 2018, providers were to use Exhibit 2. Failure to do so would result in the rejection of the cost report.

For cost reporting periods beginning on or after October 1, 2020, hospitals are now expected to submit Exhibit 2A. If applicable, a separate Exhibit 2A should be submitted for each provider number in the health care complex and separated by inpatient and outpatient as well. Also, the exhibits should distinguish between dually eligible crossover accounts and non-dually eligible accounts.

The new exhibit, which is found on page 67 of the CMS PRM Chapter 40, has 25 columns and includes the following data points:

  • Patient name, last and first
  • Medicare beneficiary identifier (MBI) or HICN
  • Patient account number
  • Dates of service, from and to
  • Medicaid number
  • Deemed indigent indicator
  • Remittance advice date, Medicare and Medicaid
  • Secondary payer remittance advice date
  • Beneficiary responsibility amount
  • Date first bill sent to beneficiary
  • A/R write-off date
  • Collection agency information, sent and returned dates
  • Collection effort cease date
  • Medicare write-off date
  • Recoveries, amount and Medicare FYE date
  • Medicare deductible and coinsurance amounts (expectation of payment criteria required)
  • Current year payments received, amount and source
  • Allowed bad debts
  • Comments

Worksheet S-10: New Proposed Instructions

CMS has revised the Worksheet S-10 instructions and some of the proposed changes include:

  • CMS is clarifying the definition of courtesy discounts and what should be excluded from Worksheet S-10.
  • “Hospitals that received HRSA-administered Uninsured Provider Relief Fund (PRF) payments….for services provided to uninsured COVID-19 patients, must not include the patient charges for those services.”
  • The reported cost-to-charge ratio will now be for the general short-term hospital portion only—not the entire hospital complex—effective with cost reporting periods beginning on or after October 1, 2020.
  • For cost reporting periods beginning on or after October 1, 2020, hospitals can no longer claim charges for services other than the general short-term acute hospital and now must exclude psychiatric unit, skilled nursing facility (SNF), home health agency (HHA), and end-stage renal disease (ESRD), for example.

For a thorough understanding of what’s being proposed regarding Worksheet S-10 instructions, a review of the full PRM is advised. Additionally, as the reporting and auditing of data for Worksheet S-10 has become more complex over time, these new instructions should be read in conjunction with MLN Matters SE17031 as well as CMS Questions and Answers for Worksheet S-10.

Worksheet S-10: New Exhibit 3B—Charity Care Listing

Effective with cost reporting periods beginning on or after October 1, 2018, hospitals were required to submit a listing supporting charity care claimed in the cost report. Failure to do so would result in the rejection of the cost report. However, CMS offered no standardized format for submitting the required data. That’s being changed here.

Effective for cost reporting periods beginning on or after October 1, 2020, new Exhibit 3B represents the standard format for reporting charity care amounts claimed in the cost report. The new exhibit, which is found on page 127 of the CMS PRM Chapter 40, has 27 columns and include the following data points with revised definitions included in the proposed PRM:

  • Patient name, last and first
  • Dates of service, admit and discharge
  • Patient account number
  • Uninsured (UI) or insured (INC) but any of the following are true:
    • There’s no contractual relationship with the hospital
    • Medically necessary, non-covered services were provided
    • The patient had exhausted benefits
  • Name of Insurer
  • MBI
  • Medicaid number
  • Charity care determination, approved and policy under which approved
  • Gross charges
  • Deductible, coinsurance, and co-payment
  • Non-covered charges by Medicaid
  • Minus reductions for the following:
    • Physician professional charges
    • Non-covered charges
    • Uninsured discount
    • Contractual allowance
    • Courtesy discount
  • Gross charges net of reductions
  • Allowable charity charges
  • Charity care approved ratio
  • Uninsured discount
  • Total allowable charity care amount
  • Write-off date
  • Patient responsibility charges
  • Payments received

Worksheet S-10: New Exhibit 3C—Listing of Total Bad Debts

In addition to providing charity care information at the detailed patient level in as-filed cost reports, effective for cost reporting periods beginning on or after October 1, 2020, information regarding non-Medicare bad debts must also be reported at the patient level on Exhibit 3C.

The new exhibit, which is found on page 129 of the CMS PRM Chapter 40, has 17 columns and include the following data points with definitions included in the proposed PRM:

  • Insurance status
  • Patient name, last and first
  • Patient ID number
  • Dates of service, from and to
  • Primary payor
  • Secondary payor
  • Service indicator, inpatient (IP) or outpatient (OP)
  • Total hospital charges, hospital CMS certification number (CCN) only
  • Total physician or professional charges
  • Total patient payments
  • Total third-party payments
  • Patient charity care amount
  • Contractual allowance or other amount
  • A/R write-off date
  • Patient bad debt write-off amount

Worksheet S-12: Median Payer Specific Negotiated Charge Data

In accordance with the FY 2021 Inpatient Prospective Payment System (IPPS) final rule, CMS is adding a new worksheet to the cost report to collect data associated with payer specific negotiated charge information. This information must be reported for cost reporting periods ending on or after January 1, 2021. All Medicare Advantage Organizations (MAOs) must report the median payor specific negotiated charge in the cost report for each MS-DRG. See the FY 2021 IPPS final rule, published on September 18, 2020, for more information.

Worksheet A; B Parts I and II; B-1; C Parts I and II; D Parts II, IV and V; D-6; L-1 Part I

Instructions were updated to clarify reporting for:

  • Allogeneic hematopoietic stem cell
  • Chimeric antigen receptor T-cell therapy
  • Opioid Treatment Program acquisition costs

Worksheet D-1—Computation of Inpatient Operating Costs

Changes include the addition of new lines to reflect temporary and permanent adjustments to TEFRA rates to properly calculate the TEFRA limit for inpatient costs.

Worksheet D-4—Computation of Organ Acquisition Costs

Instructions have been revised to regarding the counting of organs including total usable organs, Medicare usable organs, organs for Medicare Advantage patients, and organs where there is a primary and secondary payer.

Worksheet E Part A—Calculation of Reimbursement Settlement

Instructions have been added for excluded MS-DRG’s effective for cost reporting periods beginning on or after October 1, 2020. For further information, see page 58,844 of the FY 2021 final IPPS rule issued September 18, 2020.

Worksheet G-3–Statement of Revenue and Expenses

Instructions added regarding the reporting of revenue received for COVID-19 PHE funding.

We’re Here to Help

More in depth discussion regarding some of these items will be communicated by Moss Adams in the coming weeks and months. However, please don’t hesitate to reach out to your Moss Adams professional to discuss how these proposed changes will affect your organization and Medicare cost reporting efforts.

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