The Centers for Medicare & Medicaid Services has updated the online Medicare Provider Reimbursement Manual, modifying instructions related to the 2% reimbursement reductions resulting from sequestration.
CMS updated Chapter 41, Skilled Nursing Facility and Skilled Nursing Facility Complex Cost Reports, Form CMS-2540-10. Parts of four worksheets — E, H, I and J — have been changed due to the sequestration cuts that took effect April 1, 2013. (Most SNFs only use Worksheet E.)
The CMS instructions state that for cost reporting periods that overlap or begin on or after April 1, 2013, the sequestration adjustment for SNFs should be calculated as follows:
Two percent times the sum of the period’s PPS reimbursement and Medicare bad debt reimbursement, prorated for the days that sequestration is in effect (total days in the cost reporting period that occur during the sequestration period beginning on or after April 1, 2013, divided by total days in the entire cost reporting period.)
Thus, there will typically be a difference between the calculated amount and the amount of sequestration on the PS&R, since the PS&R will be based on actual claims for dates of service on or after April 1, 2013.
CMS understands that the sequestration ‘days proration’ will yield a different result than the amount actually sequestered per the PS&R, but this is currently the method that sequestration will be calculated on the cost report, which can thus impact the settlement.
This is in contrast to the Home Health Agency Medicare Cost Report – Form 1728, where the sequestration amount is an input field, and is taken from the PS&R or HHA’s internal records of amount actually sequestered on the paid episodes.