How Does the Cost Report Impact Us?

How does Medicare cost reporting impact us?

1   The federal government looks at cost reports to estimate profits and losses of hospitals , SNFs, Home Health Agencies, etc.

2.   Providers can claim reimbursement for Medicare bad debt on their Medicare cost report for uncollectible copays and deductibles.

3.   Outlier payments for expensive cases are based upon your facility-specific cost report.  This would be true for both a Medicaid hospital and home health agency.

4.   States base their Medicaid reimbursement upon the Medicaid cost report, but often the Medicaid auditors look to the Medicare cost report to determine how to treat certain costs or allocations found on the Medicaid report.  Sometimes this Medicaid information is recorded on the Medicare cost report itself instead of a separate cost report just for Medicaid.

5.   There are still elements of cost reimbursement for different health care providers. In the case of a SNF, there is still cost reimbursement of the fees of a physician who attends a Utilization Review committee, to the extent that his review relates to Medicare patients. In the case of a hospital, there is still cost reimbursement for costs related to a Nursing School or a Paramedic Education program.

6.   Hospitals that receive special State subsidies for treating charity care and indigent patients are subject to a cap (known as DSH cap). The cap limits subsidies reimbursement for uncompensated costs of care of the Medicaid and other indigent patients based upon the Medicare cost report.  This cap is calculated using perdiem costs and cost-to-charge ratios taken from the Medicare cost report.

7.   Payment rates for hospitals and SNFs are adjusted for different locations per that location’s wage index. The wage index is based currently on hospital cost reports.

8.   There are still some entities that receive cost reimbursement for all the care, such as Critical Access Hospitals.