Southwest Consulting Associates Blog

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:

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. 

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?