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Overview of Worksheet S-10 Medicare Cost Report Instructions

Posted by Cory Aubuchon on Nov 4, 2015 9:00:00 AM

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s-10 cost report instructionsWorksheet S-10 hasn’t exactly been in the forefront of the Medicare cost reporting process as, other than EHR/HIT payments, Worksheet S-10 is not directly tied to reimbursement today. However, providers have been put on notice that CMS is eyeing a switch to S-10 as the distribution model for Uncompensated Care (UC) reimbursement in the future.  Currently, the UC pool is allocated based on a proxy of low-income days (Factor 3).  Yet verbiage from the most recent 2016 IPPS rule indicates that a change to this proxy is on the horizon:  

“At this time, we are considering a possible timeline for using worksheet S-10 data to calculate Factor 3, and we intend to discuss this further in the FY 2017 IPPS proposed rule, which is typically released in April of the preceding fiscal year.” -CMS

While we expect clarification and future changes to the S-10 cost report instructions, now is the time for providers to review their S-10 process based on the current set of instructions.  


The purpose of S-10 is to calculate uncompensated care costs. This is achieved by converting allocated buckets of charges into costs via the cost-to-charge ratio (RCC) net of any revenue received.


Worksheet S-10 is broken up into 3 general sections.  The first section (lines 2 – 16) yields unreimbursed costs or the “shortfall” of indigent care programs.  The programs in this section include Medicaid, SCHIP and any state, county or local governmental indigent care programs.  Unreimbursed costs in this section should be for service dates in the cost report fiscal year.


The second section (lines 17-18) is for reporting funding received from grants, gifts and appropriations.  Line 17 includes non-government grants, gifts and investment income used for uncompensated and indigent care.  Line 18 is reserved for government funded grants, appropriations or transfers and also includes “amounts received from charity care pools.”  


The third section (lines 20-29) calculates the cost of uncompensated care from two components:  charity care and bad debt.  Charity care cost is reported based on service date and is split between insured and uninsured patients less any patient payments received.  Bad debt cost is derived from total bad debt less reimbursable Medicare bad debts (for bad debts written off in the fiscal year).  


This summary represents the very basics of the Medicare cost report instructions for Worksheet S-10 as they exist at this point in time.  In future blog entries, we’ll explore the nuances of each section of S-10.


Southwest Consulting Associates Worksheet S-10 blog

Topics: S-10

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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:

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