Southwest Consulting Associates Blog

Hospital providers from all over the country converged at this year’s Health Financial Systems User Meeting in hopes to hear updates on the latest issues affecting Medicare reimbursement. This year’s two-day meeting curated twenty-three different presentations ranging from Medicare cost report form changes to software reviews and Medicare information updates. We could write for days on all of the information we absorbed at this year’s assembly, but after reviewing our catalog of notes and identifying the recurring themes across presentations, we’ve compiled our top four takeaways we think hospital providers should be aware of to improve their reimbursement areas, their cost reports and maintain compliance with Medicare regulations. 

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.  

Due to overwhelming response for more information on CMS’ electronic signature feature noted in “Medicare Cost Reporting – 7 Things to Know”, we’ve put together a follow up post to review the cost report electronic signature application steps.

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.

The Centers for Medicare and Medicaid Services (CMS) has made updates to the cost reporting software, the rules for filing a hospital Medicare cost report and noted future potential changes.  Here are 7 things to know:

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. 

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?