On April 8, 2019, SCA was provided multiple copies of a MAC letter informing hospitals of potentially aberrant data reported on Worksheet S-10 for federal FY 2017. While we have only seen a few letters to date, it is our understanding that this is a CMS initiative affecting many hospitals. Here is what we have been told at this point:
Southwest Consulting Associates recently participated in a segment of the THA SOLUTIONS Podcast where SCA President Michael Newell discussed the Medicare cost report Worksheet S-10 with Texas Hospital Association's Lance Lunsford. The sixteen minute conversation was part of the podcast segment titled, "Maintain Compliance to Maximize Hospital Funding" and can be heard in its entirety by selecting the play button located at the end of this post.
Hospitals nationwide have been undergoing Worksheet S-10 “reviews” for FY 2015 that in large part culminated at the end of January 2019. Since then, there has been word that additional technical direction was provided to MACs by CMS (not yet shared with hospitals) that addresses how to apply some “findings” from those reviews. Even though the current audit process has not been fully completed, there is much to learn about what has transpired so far and how that may impact future reviews or even future changes to cost reporting instructions.
Last Fall, CMS made updates to the cost reporting software and the rules for filing a hospital Medicare cost report. Additionally, there were new and noteworthy changes included in the FY 2019 IPPS Final Rule. Specifically, the FY 2019 Final IPPS rule included new requirements for cost reports submissions with periods beginning on or after 10/1/2018. Providers must now submit both Worksheet S-10 and Medicare DSH patient level detail along with their cost report submissions.
Southwest Consulting Associates was featured in the latest issue of the Dallas-Fort Worth Hospital Council's Interlocutor magazine. Beginning on page 24, Kyle Pennington reviews the FY 2019 IPPS rule, the inaugural audits of Medicare cost report Worksheet S-10 data and what's coming up next for hospital providers and their reimbursement teams.
The Uncompensated Care pool reimbursement payment is viewed as a zero-sum game, with one hospital’s reimbursement gain through the program becoming another hospital’s loss. While Worksheet S-10 has been used for UC reimbursement purposes for only a short time, audits of the S-10 data to ensure its accuracy and consistency have been a high priority for hospital providers. In its 2019 final IPPS rule, CMS stated that, due to the overwhelming feedback from commenters emphasizing the importance of audits, they would begin the inaugural audits in fall 2018.
With CMS using cost report Worksheet S-10 to determine a provider’s UC Factor 3 and ultimately their portion of federal uncompensated care payments, ensuring the accuracy of Worksheet S-10 reporting is essential for all Medicare DSH-eligible hospitals. Now, while we know that line 30 ultimately drives Factor 3, it is recommended hospitals review ALL data on S-10, not just the data that feeds to line 30. This includes looking closer at the cost to charge ratio (CCR) to ensure hospitals are capturing all costs that are considered allowable. As you may know, the cost to charge ratio has a direct effect on the data that is reported on Medicare cost report Worksheet S-10, which then in turn impacts UC payments.
As stated in an earlier blog titled, “Costs for Medicare Cost Report Worksheet S-10 Cost To Charge Ratio,” hospitals need to begin looking closer at their cost to charge ratios (CCR) to ensure they are capturing all costs that are considered allowable. As you may know, the cost to charge ratio has a direct effect on the data that is reported on Medicare cost report Worksheet S-10, which then in turn impacts UC payments. In this blog, we will review the cost to charge ratio in a hospital setting.
The Fall 2018 issue of HFMA New Jersey's Garden State FOCUS magazine included an article titled, "FY 2019 IPPS Final Rule Update: Worksheet S-10 Is Here To Stay" which takes a look at:
As CMS promised, Worksheet S-10 is now starting to be used for computing uncompensated care allocations and potentially other payment allocations in the future. It is becoming apparent that hospitals need to return to focusing more on their cost reports that are being filed to ensure costs are properly stated.
Over the past decade, many hospitals may not have focused as much on cost and charges due mostly to having PPS payment systems (excluding a discussion on Medicaid payments). While filing complete and accurate cost reports has always been the norm, now more than ever, facilities need to begin looking closer at their cost to charge ratios to ensure they are capturing all costs that can be considered allowable. Are you capturing all your allowable costs to properly compute your cost to charge ratio for S-10?