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Medicare Cost Report Supporting Documentation Requirements

Posted by Jamie Pennington on Aug 29, 2019 3:32:00 PM

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files_Medicare cost report supporting documentation_Image by Ag Ku from Pixabay As you will recall from the FY 2019 IPPS final rule-making cycle, CMS issued new requirements for supporting documentation that must be submitted along with the Medicare cost report.  While that final rule was posted a little over a year ago, hospitals will soon be in the midst of filing the first affected cost reports. The new Medicare cost report supporting documentation is required for cost reporting periods beginning on or after October 1, 2018.


CMS just released a MLN Matters article, number SE19015, that addresses the new documentation requirements. Failure to provide the required support will result in hospitals having their cost reports rejected for lack of supporting documentation


The article summarizes cost report types/items that have been affected by these new requirements:

    • Teaching Hospitals

    • Bad Debt
    • Disproportionate Share Hospitals (DSH)
    • Charity Care and Uninsured Discounts
    • Home Office Cost Allocations

The FY 2019 IPPS Final Rule stated that for cost reporting periods beginning on or after October 1, 2018, each DSH-qualifying hospital must now include, as part of the cost report filing, a detailed listing of its Medicaid eligible days that corresponds to the Medicaid eligible days claimed in the cost report as supporting documentation. This requirement affects the acceptability of the cost report. Again, without a detailed listing, a cost report will be deemed unacceptable and thus, your report will be rejected. Going forward, if a hospital submits an amended cost report, whether that be the “12-month” cost report, or another amended cost report, an amended listing or an addendum to the original listing would need to be submitted as supporting documentation with any amended cost report.


Additionally, for charity care detail, CMS provided examples of the information needed to support Worksheet S-10 data such as patient name, dates of service, insurer, and the amount of charity care and/or uninsured discounts given that corresponds to the amount claimed in the hospital’s cost report.  If your hospital has historically used summary reports to report S-10 values, those will no longer suffice under this new requirement.  Additionally, summary reports have the potential to vary greatly from the actual detail of charity and bad debt write-offs that occurred during the fiscal year and they will not meet MAC S-10 audit requirements.


While it has not been highly publicized, CMS also mentions that supporting detail will also be required for providers claiming Medicare bad debt.


In the MLN Matters article CMS also notes that currently there is no standard format for submitting this data, however, they plan to include a template in the Paperwork Reduction Act notice in the future.  Please note, in the FY 2020 IPPS Final rule, CMS also noted that the Paperwork Reduction Act would include proposed changes to the Worksheet S-10 instructions. A public comment period will be provided for questions about and suggestions for modifications to Worksheet S-10. We will be monitoring this closely, if released.


And closely related, we'd like to remind you of the cost reporting updates CMS has also made. You can read the blog post, Medicare Cost Reporting Updates - 7 Things to Know, which addresses updates to the cost reporting software, the rules for filing a hospital Medicare cost report and noted future potential changes.


You can download the MLN Matters article by following this link - MLN Matters SE 19015.



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Topics: DSH Reimbursement, Medicare DSH Reimbursement, Industry Updates, S-10, regulations, final rule, worksheet s-10, Medicare Cost Report

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The climate of provider reimbursement is ever-changing and this blog is intended to keep you up-to-date on the latest information regarding:

  • DSH Reimbursement
  • 340B Pharmacy Drug Discount Program
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