Why do I Need to Enter Stats on My Cost Report?

Why must I enter so many stats on my cost report?

Most Medicare cost report forms have worksheets for entering various statistics, generally the B-series worksheets.  These stats often require gathering significant amounts of data.  Did you ever wonder what purpose they serve?

On a PPS (prospective payment system) cost report, the objective is to determine how much cost there is to the facility.  Cost is determined either per visit per discipline (HHAs), per level of care patient day (hospices), per patient day (SNFs), or per visit (RHCs and FQHCs) for the cost reporting period.  This is most easily seen on the hospice form 1984-14, which actually uses Worksheet C to calculate these costs.

Direct costs, such as nursing, are easy to figure out – if I had, for example $6,500 of continuous home care (CHC) direct care costs for my hospice for the year, and 100 CHC days, then each CHC day cost my facility $650 in direct care expenses.

The issue lies in figuring out how much of my general overhead costs, such as rent, equipment, maintenance, and admin & general, belong to each category.  This is where the stats come into play.

Say my SNF had $25,000 of capital related costs, and my SNF is 25,000 square feet.  That means that each square foot of my SNF gets allocated $1 of capital costs.  On worksheet B-1, I will enter the square footage of all my departments – A&G: 1,000, Dietary: 800, Laundry: 300, Housekeeping: 400, Plant: 300, Nursing Facility: 15,000, Long Term Care:  6,500, PT: 200, OT: 200, Speech: 100, Barber & Beauty: 200.  When the capital costs get allocated out, each one of these departments will receive $1 for each square foot.  Therefore, the actual nursing facility will receive $15,000 of the costs.  When the cost per patient day is calculated, this $15,000 will be included in the total cost to arrive at the correct costs to the facility.

Stats must be provided if there were costs and should not be provided if there were no costs.  For example, if a SNF does not have a pharmacy, but the cost report preparer puts down 500 in the square footage for pharmacy, costs will be allocated to the pharmacy erroneously.  On the other hand, if the SNF does have a pharmacy, and no stats at all were entered in the pharmacy line, this would result in a Level I error.

The allocation works in a similar manner for all stats for all facilities.  The only stats which the preparer should not enter are those calculated based on accumulated cost, which is the statistic for all Admin & General cost centers.

It should be noted that one does not need to know how the stats work in order to enter them properly.  The most important thing to know is that, if the stats are requesting square footage, square footage should be entered correctly, if they are requesting nursing hours, they should be entered correctly, and so on.

Disclaimer:  This blog does not contain legal advice. What it does contain are our best explanations, advice, and suggestions to help facilities and cost report preparers to understand the cost report forms and offer suggestions for their preparation. Progressive Provider Services assumes no legal responsibility for the content of this blog, nor for cost reports prepared based on the content herein.

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