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R E V I E W I N G Y O U R C O S T R E P O R T
ELLEN DONAHUESENIOR MANAGER
BERRYDUNN
REVIEWING YOUR COST REPORT
Work is done!!!!! EXCEPT…
Someone has to review the cost report before it is filed
How to minimize questions by the reviewer
WS S SERIESINFO ABOUT THE HOSPITALSERIES PURPOSE
• S: Medicare and Medicaid settlements
• S-2s: Hospital information– PPS Medicaid days
– HIT reporting
– Hospital Reimbursement Questionnaire
REVIEW QUESTIONS
• Are the results what were expected?• Have you answered all the
questions?– Did you properly account for all
Medicaid days – paid, unpaid, in-State, out-of-State?
– Have you answered questions 167 to 170 correctly?
– Have you completed S-2 Part II – Form 339?
WS S SERIESINFO ABOUT THE HOSPITALSERIES PURPOSE
• S-3: Statistics
REVIEW QUESTIONS
• Are stats gathered using the same method as in prior years?
• Did you account for Leap Year in days available?
• Did you include observation bed days?
• As a CAH does your ALOS exceed 96 hours?
• Do your Medicare Swing-bed SNF days equal Total Swing-bed SNF days?
• If you are self-insured did you properly account for employee discount days?
• Did you include FTEs?
WS S SERIES CONTINUED
SERIES PURPOSE
S-3 Part II & III: Wage Index information
• S-10: Uncompensated Care Data
REVIEW QUESTIONS
• Have you incorporated any prior year audit adjustments?
• Is the Average Hourly Wage greater than last year?
• Did you complete S-3 Part IV and V?• Have you read and re-read the
instructions on what to include and what to exclude?
WS ATRIAL BALANCE OF EXPENSESWORKSHEET PURPOSE
Worksheet A is identified as the Trial Balance of Expenses and identifies costs by Medicare cost center as general service, patient related, special purpose and non-reimbursable. WS A also summarizes the results of reclasses and adjustments to arrive at Net Expenses for Allocation.
REVIEW QUESTIONS
• Does WS A reconcile to Audited Financial Statements?
• Are mappings consistent?• How did you map new
departments?• Are all your NRCCs necessary?• Do your reclasses net to zero?• Do you have any negative cost
centers in WS A Column 7?
WS A-6 RECLASSESWORKSHEET PURPOSE
WS A-6 is used to reclass expenses to the appropriate cost center for items such as:
– Provider benefits– Depreciation and interest expense– Implantable devices– Nursery and Labor & Delivery– Ancillary services provided in
clinics– Marketing and development
REVIEW QUESTIONS
• Are you MATCHing revenues, expenses, statistics and Medicare charges?
• Are the prior year reclasses still necessary?
• Did you include all new accounts in reclasses if necessary?
• Did you review marketing and development for allowable expenses?
• Did you reclass costs out of the provider-based clinics that will be costed through hospital ancillary cost centers?
WS A-8 ADJUSTMENTS TO EXPENSESWORKSHEET PURPOSE
WS A-8 is to adjust costs for amounts:– Not related to patient care– Used in the provision of luxury
items– To reflect actual expenses
incurred– Recovery of expenses (sales, fees)– Related to Medicare principles of
reimbursement– Items provided for separately
REVIEW QUESTIONS
• Are the adjustments consistent with prior year?
• Did you look at all your Other Operating Revenue and determine a disposition for each account?
• Was the offset for more than the expense?
• Did you offset mid-level costs on A-8 not on A-8-2?
• Did you enter amounts as negatives?
• As a CAH did you offset HIT
WS A-8-2 PHYSICIAN ADJUSTMENTSWORKSHEET PURPOSE
A-8-2 Physician adjustments are made to adjust (offset) costs related to the provision of professional services. It calculates the allowable costs that benefit the general patient population and calculates the allowable cost for availability services in a hospital emergency room.
REVIEW QUESTIONS
• Does your Total Remuneration include salaries, non-mandatory benefits, contracts, CME and malpractice?
• Do you have time studies to support Part A (provider time)?
• Do you have auditable Emergency Room logs to support availability time?
• How do offsets compare to PY offsets?• As a PPS hospital did you apply the
appropriate RCE limit – based on category and date of service?
WS B SERIES COST ALLOCATION AND STATISTICSWORKSHEET PURPOSE
The B series allocates general service costs to all other cost centers. The statistics used to allocate costs are identified and assigned to the appropriate cost center. The Unit Cost Multiplier is used to calculate the applicable cost for each cost center to arrive at fully allocated cost.
REVIEW QUESTIONS
• Before we get to the actual statistics:– Are the stats current, accurate and
auditable?– Should you ask for a new statistic to
allocate the Provider Tax?– Should you ask for additional A&G
cost centers to more accurately allocate costs?
• Requests must be made to the MAC in writing 90 days prior to the end of the cost reporting period
• Both sets of stats must be maintained until approval is received
WS B-1 – STATS SQUARE FEETSTATISTIC – SQUARE FEET
• Square Feet can be used to allocate:
– Capital costs – Maintenance and repairs– Operation of plant– Housekeeping
REVIEW QUESTIONS
• Have there been any changes in room utilization this year?
– Have you adjusted square feet based on the time used by each department?
– Do you have the appropriate documentation for the changes in room assignments – date of move, departments involved in the move?
• Have you excluded from the capital cost allocation square feet for any non-owned areas?
WS B-1 – STATS SQUARE FEET MORE
STATISTIC – SQUARE FEET
• Square Feet can be used to allocate:
– Capital costs – Maintenance and repairs– Operation of plant– Housekeeping
REVIEW QUESTIONS
• Do you need multiple square feet stats – one stat for each building?
• Have you determined if you:– Maintain the same cost centers that
have capital costs?– Have plant operations for all cost
centers?– Housekeep for all same cost centers?
• Do you have square feet for each cost center that has FTEs or equipment?
WS B-1 – STATS MMESTATISTIC - CHOICES
• Used to allocate Major Moveable Equipment capital costs
• Possible stats:– Square footage– Dollar value of equipment– Depreciation expense
REVIEW QUESTIONS
• If you are a CAH, use depreciation as the stat to allocate MME, and have an offset of HIT depreciation on A-8 did you offset that amount on your B-1 stat?
• Do you have sufficient data to use depreciation expense? What is the impact of changing to depreciation expense?
WS B-1 – STATS SALARY/FTE/HOURS RELATEDSTATISTIC - MULTIPLE
• Statistics used to allocate:– Employee benefits - salaries– Cafeteria expense - FTEs– Nursing Administration expense
- worked hours
REVIEW QUESTIONS
• Did you start with the entire dataset?• Did you properly reclass stats to
MATCH expense reclasses?• If you reclassed benefits through A-6
did you eliminate the salaries used to allocate remaining employee benefits?
• Did you eliminate Café stat for off-site locations?
WS B-1 – STATSCOSTED REQUISITIONS
STATISTIC – COSTED REQUISITIONS
Costed requisitions is the recommended statistic used to allocate:
– Central supply costs– Pharmacy costs
REVIEW QUESTIONS
• Do you have current, accurate and auditable support for the statistic?
• Do you have 12 months worth of costed requisition reports?
• Does the allocation being done make sense?
• Does Central Supply provide services to the cost centers you are allocating to?
WS B-1 – STATS GROSS REVENUESTATISTIC – GROSS REVENUE
Gross revenue can be used as the statistic used to allocate:
– Patient Services• Patient Financial Services• Admitting• Collections
– Provider Tax– Medical Records
REVIEW QUESTIONS
• Do you need multiple gross revenue stats?
• Do you need to ask for a change in statistics to properly allocate patient service costs?
• Do you need to ask for a new cost center to allocate the provider tax?
WS CRATIO OF COST TO CHARGESWORKSHEET PURPOSE
Worksheet C calculates the ratio of cost to charges (RCC) based on fully allocated cost and appropriately adjusted charges. The resulting RCC will be used to calculate program cost based on charges.
REVIEW QUESTIONS
• Did you start with charges that reconciled to your audited financial statements?
• Did you reclass charges to MATCHreclasses of cost?
• Did you handle self-insurance consistently?
• Did you reclass charges related to:– Implantable devices– Ancillary services performed in clinics– Properly MATCH charges with Revenue
Code assignments• Did you remove Part B/professional
WS CREASONABLENESS TESTDid you review the RCCs compared to the prior year RCCs?• If your charges went up and your costs went down did your RCC
go down?• Did you have significant changes in your stats to impact your
RCCs?• Did you have other operational changes that would have had an
impact on your RCC?– Did you start a new program mid-year last year? – Was a doctor missing for part of the year? – Did you use locums/travelers more or less this year?
WS D SERIESCALCULATION OF PROGRAM COSTSERIES PURPOSE
The D series of worksheets calculate the cost applicable to the Program – Medicare or Medicaid.
REVIEW QUESTIONS
• How does your cost per day compare to PY cost per day? Is the change reasonable?
• Did you include Swing Bed state rate?• Did you reconcile the charges and
patient days in the cost report to the PS&R?
• Did you map Revenue Codes to MATCH the costs and charges in the rest of the cost report?
• Are Rev Code mapping consistent with prior years?
• Did you appropriately apportion Rev C d h t lti l t t
WS E SERIESREIMBURSEMENT SETTLEMENTSSERIES PURPOSE
The E series of worksheets brings all the information together and calculates the Medicare and Medicaid settlements.
NOTE: MaineCare is not settled based on the Medicare cost report but uses information from the Medicare cost report as the basis for the calculation of its settlement.
REVIEW QUESTIONS
Payment questions:• Did you reconcile coinsurance,
deductibles, MSP and payments to the PS&R?
• Did you include any LSAs received from or paid to Medicare during the year?
• Did you include pass-through payments for bad debts?
• If you are on PIP did you reconcile payments to amounts identified by the MAC?
WS E SERIESREIMBURSEMENT SETTLEMENTS MORE
• PPS: Did you update your SSI percentage based on the most current information available? Did you include all eligible Medicaid days in the percentage of Medicaid days – see S-2 Line 24?
• PPS: Did you recalculate your DSH adjustment percentage?• PPS: Did you include your current UCC Factor 3, HVBP and HRR adjustment
factors on WS E Part A?• SCH/MDH: Did you calculate your Hospital Specific payment amounts
properly?• If you receive HIT reimbursement did you include payments received on WS
E-1 Part II?
WS E SERIESBAD DEBTS• Does the Bad Debt listing conform to the requirements of Exhibit 2 of “CMS
339”?• Were the operational bad debts sent to and returned from a collection agency?• Is the collection agency directed to treat and return all bad debts the same,
regardless of financial class?• Did you reduce allowable bad debts by amounts received as a recovery or from
MaineCare?• Were the Medicare crossover bad debts processed by MaineCare?• Did you exclude coinsurance and deductibles associated with professional
services?• Did you exclude coinsurance and deductibles associated with fee-reimbursed
REASONABLENESS
• Have you estimated what your settlements should be?
–How do the results compare to the estimate?–If there is a difference can you determine what is
causing it?
MAKE CHANGES TO THE COST REPORT BASED ON RESPONSES TO THE QUESTIONS
PASS THE COST REPORT TO THE REVIEWER
