On your cost report request letter, you may notice a mailing address and/ or instructions for mailing a check.  Many facilities would like to know in which circumstances it would be necessary to mail a check with the cost report.

The answer is that checks only become necessary in one of the following scenarios:

1. The facility is cost-reimbursed, i.e., not on a prospective payment system.  This situation, which, as of this writing, still applies to some types of hospitals and to RHCs, is becoming more and more rare.  If the facility received more payment than their costs per the cost report, there would be an overpayment which may necessitate a check to the fiscal intermediary/ MAC.*
2. The facility is claiming Medicare bad debt for uncollectible co-pays or deductibles.  While it is beyond the scope of this blog to explain, in certain circumstances, facilities are eligible to claim bad debt.  This would apply to SNFs, RHCs, FQHCs, and hospitals.  In this case, if the facility received more interim payments over the course of the year than the actual bad debt which they are claiming, there would be an overpayment which would need to be reimbursed.**
3. The facility administers vaccines and received an overpayment for vaccine reimbursement.  If the facility was already reimbursed its vaccine costs for the year, which may be unusual, and the total reimbursement received is more than the vaccine costs calculated by the software, the remainder would need to be reimbursed to the intermediary.

It should be noted that, although a check may be sent with the cost report, intermediaries may also work out over-payments to facilities by adjusting forthcoming payments.  If your cost report does show an over-payment, check with your intermediary as to how they would like to handle the reimbursement.

* For more information on the prospective payment system and the cost report, see our blog How Does a PPS Cost Report Work?

**You may read more about claiming Medicare bad debt on our blog Medicare Bad Debt.

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.