Southwest Consulting Associates Blog

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?

Southwest Consulting Associates has been endorsed by the Texas Hospital Association to help Texas hospitals thoroughly and completely calculate and document uncompensated care costs to qualify for Medicaid supplemental payments. Read the full press release HERE.

The 2019 IPPS Proposed Rule will be published in the Federal Register on May 7, 2018. If finalized, these changes will go into effect October 1, 2018. The pre-published version can be viewed HERE. Public comments will be accepted until 5 p.m. EDT on June 25, 2018.  Below is SCA’s "as brief as we could make it", yet comprehensive summary on the Medicare DSH/Uncompensated Care payment portion (pages 818-877) of the proposed rule as it will affect qualifying DSH hospitals.

On January 23, 2015, Michael Newell, SCA’s President, authored a blog article entitled 340B meets S-10, which can be found HERE.  The impetus for this article was a report published by the Alliance for Integrity and Reform of 340B (AIR340B).  In this article, the authors concluded that 340B hospitals appear to provide only a minimal amount of charity care thus calling into question whether or not Congress’ intentions for the 340B program are being met. The data used to reach this conclusion was derived from the Medicare Cost Report, CMS-2552-10, S-10 – the very data that CMS currently uses as the basis to allocate the uncompensated care pool for the Medicare DSH/uncompensated care program.