It looks like CMS has been getting stricter about reporting related party expenses on the Medicare cost reports.

CMS has recently issued new edits for the new Home Office form 287-22, which require that information reported on A-8-1 Part II be complete. Based on the type of relationship between the provider and the service provider (column 1), different information must be entered including, often, percentages of ownership. In the past, there were few edits enforcing which information needed to be entered, leading some preparers to be lackadaisical about gathering and reporting this information.

In addition, CMS has started incorporating line numbers into A-8-1 Part I, where the preparer must indicate which line number on A-8-1 Part II is associated with the costs reported on that A-8-1 Part I line. These changes were already implemented in the HHA form 1728-20 and the new Home Office form 287-22. They are also included in the draft for the SNF form 2540-24, which still needs to be published for 30 day comment.

The initially-published SNF 2540-24 draft also has a separate column for the cost centers on Worksheet A for HO/CO & Related Party Labor Costs. This would require preparers to report related party labor independently from total labor.

It looks like facilities will need to be prepared to track their related party information very carefully in order to satisfy emerging CMS requirements.

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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 reporting process and offer suggestions for their preparation. Progressive Provider Services assumes no legal responsibility for the content of this blog, nor for cost reports or other reports prepared based on the content herein.