Cost Report 101 FINAL - South

1 cost Report Preparation and Documentation 101 A How-To Guide to Workpaper and Supporting Documentation Preparation Documentation PreparationEssential Consulting Medicare Reimbursement Methodologies Medicare Reimbursement Methodologies What is a cost Report and Why is it Important Filing Guidelines Basic Flow of a cost Reportp Most Common Data Used in a cost Report Basic Data Rules and Reconciliations Basic Data Rules and ReconciliationsEssential Consulting Review of cost Report Pages Their Data and the Review of cost Report Pages, Their Data and the Workpapers Needed to Support Them: WS A (Summary Trial Balance of Expenses)(y) WS A-6 (Reclassifications) WS A-8 (Adjustments) WS B-1 (Statistical Allocation of Overhead Expenses) WS B-1 (Statistical Allocation of Overhead Expenses) WS C (Patient Treatment Revenues Total Charges) Settlement (Charges and Data)SS(Q) WS S-2 (Provider Questionnaire) WS S-3 Part 1(Census Data), WS S-3 Part 2 (Wage Index) WS S-10 (Uncompensated Care)Essential Consulting Documentation is the Key!

2 Documentation is the Key! Electronic vs. Manual Data Manipulation and Analysis Special Issues Special Issues Critical Access Home Office cost Statement Skilled Nursing cost Report Home Health cost Report Community Mental Health Center cost ReportCommunity Mental Health Center cost ReportEssential Consulting Specialty Pages on the cost Report Specialty Pages on the cost Report WS A-8-1 (Related Parties)WS A82 (Phii Cti) WS A-8-2 (Physician Compensation) WS H Series (Home Health Agencies) WS I Series (Renal Dialysis) WS M Series (RHC, FQHC) WS J Series (CMHC) Wrap UpEssential Consulting Reimbursement MethodologiesMedicare Reimbursement MethodologiesMedicareProgramPartAMedicar eProgramPartBPhysician ServicesMedicare Program Part AIP ServicesHospital Based Outpatient ServicesMedicare Program Part BClinic ServicesIP Ancillary ServicesOnsite/Offsite Clinics Clinics and MD OfficesOutpatient ServicesMedicare Part B CarrierMedicare Part A intermediaryCostReportPartA(IP)CostRepor tPartB(OP)

3 Medicare cost Reports (UB 92 Bills)CMS 1500 BillsEssential Consulting Report Part A (IP) cost Report Part B (OP)Medicare Reimbursement MethodologiesMedicare Reimbursement Methodologies Reimbursement Mechanisms for Hospital Units/Entities Reimbursement Mechanisms for Hospital Units/Entities IP Acute Care DRG (Diagnostic Related Groups) Hospital Based Outpatient Services APC (Ambulatory Payment Categories) Hospital Based Clinics APC or cost Reimbursement (Based on Designation) Skilled Nursing Facility/Unit RUGS (Resource Utilization Groups) IP Rehab Services IRFPPS (IP Rehab Facility Prospective Payment System)IP Rehab Services IRFPPS (IP Rehab Facility Prospective Payment System) IP Psychiatric Services PsychPPS (Psychiatric Prospective Payment System) Home Health Agency HHAPPS (Home Health Prospective Payment System) Home Health Agency HHAPPS (Home Health Prospective Payment System)Essential Consulting Reimbursement MethodologiesMedicare Reimbursement Methodologies Reimbursement Mechanisms for Special Services Reimbursement Mechanisms for Special Services IME/GME (Medical Education) FTEs Disproportionate Share Hospitals (DSH) IndigencyPercentageDisproportionate Share Hospitals (DSH) IndigencyPercentage Medicare Bad Debs Portion of the Un-paid Coinsurance and Deductibles Organ Acquisition cost ReimbursementEssential Consulting is a cost Report and why is it pyimportant?

4 The cost Report is a financial Report that identifies The cost Report is a financial Report that identifies the cost and charges related to healthcare treatment activitiestreatment activities cost Reports Impact Reimbursement! Today Future Reimbursement Congress/CMS rate setting and policy decisions are based on data in the cost reports and Consulting GuidelinesFiling Guidelines Medicare cost reports are due within 150 Days from Medicare cost reports are due within 150 Days from the FYE of the facility (Post Marked)El ti t t AND ti Electronic cost Report AND supporting documentation are submitted State reports (Medicaid) vary from state to state, but generally due at same time as Medicare Report Variations can be significantEssential Consulting vs 2552102552-96 vs. 2552-10 The new hospital cost Report form 255210 must be The new hospital cost Report form 2552-10 must be used for all cost reports with FYE of 4-30-2011 and laterlater.

5 The class will focus on the use of the 2552-10 Changes between 2552-96 and 2552-10 Grouping of Departments on WS A is the main change Settlement Pages (E series) were de cluttered Minor Changes on various pages (S-2, S-3, etc.)Essential Consulting ()Basic Flow of a cost ReportBasic Flow of a cost Report WS A Series general ledger or trial balance information by functional departmentggyp WS B Series allocation of overhead costs to patient treatment and other operating departments WS C Series revenue by patient treatment department to determine the cost /charge ratio (for every dollar billed how much did it cost to provide the service to the patient) WS D Series determine the cost of treating the Medicare/MediCaid patients by reimbursement mechanism WS E Series determine the due to/from Medicare Program based on the reimbursement mechanism/ cost /interim payments WS G Series Financial StatementsWS S S i ttiti l ifti d id WS S Series statistical information and wage index WS H Series Home Health Services WS J, K, M Series Clinics and Freestanding componentsWS I E d St Rl Di l i (ESRD)Essential Consulting WS I End Stage Renal Dialysis (ESRD)

6 Most Commonly Used Data in a cost ReportMost Commonly Used Data in a cost Report General Ledger (Summary Trial Balance) General Ledger (Summary Trial Balance) Payroll Register Chargemasterwith Volumes (Volume Report ) Chargemasterwith Volumes (Volume Report ) Medicare Charges by Department and Revenue Code (Revenue and Usage)(Revenue and Usage) Provider Statistical Report (PSR) Patient Census (Days and Discharges) Patient Census (Days and Discharges) Allocation StatisticsSifi P D tEssential Consulting Specific Purpose DataBasic Data RulesBasic Data RulesEvery data file has its unique issues and reasons for Every data file has its unique issues and reasons for being used in the cost Report . As a universal rule, the general ledger is the Parent data source and all general ledger is the Parent data source and all others should agree to or relate to the general ledger. Accounts/Departments/Accounting Units/ cost Centers/etc Accounts/Departments/Accounting Units/ cost Centers/etc.

7 cost Report Line Number Groupings Sub-Accounts/Object Codes/etc. Raw data vs. Processed data Know Your Data!Essential Consulting General LedgerThe General LedgerThe General Ledger is the most important data that is The General Ledger is the most important data that is included in the cost of a General Ledger Structure of a General Ledger Account vs. Sub-Account Ranges of datag Mix and Match data How does the GL break down?At d Li biliti Assets and Liabilities Revenues ExpensesEssential Consulting Other Operating and Non-Operating Revenue/ExpensesGeneral LedgerGeneral LedgerShow a General Ledger in Excel and reviewShow a General Ledger in Excel and review Account StructureSbAt Stt Sub-Account Structure Cut up GL to showAt d Li biliti Assets and Liabilities Revenues Expenses Expenses Other Operating and Non-Operating Revenue/ExpensesEssential Consulting serve two that all of the revenues/expenses (data) have been that all of the revenues/expenses (data) have been accounted for to an outside source.

8 General Ledger to Income StatementCt R t t I Sttt cost Report to Income Statement Other Operating/Non-Operating that two different data sources generate the same data in different formats and can be used as Ld R Vl Rt General Ledger Revenues vs. Volume Report General Ledger Salaries vs. Payroll Report General Ledger 3rdParty Revenues to Revenue & UsageEssential Consulting Ledger to Income StatementGeneral Ledger to Income StatementEssential Consulting Report to Income Statement pReconciliationEssential Consulting Operating/Non-Operating Rev/Exp pgpg pReconciliationEssential Consulting Ledger vs. Volume Report gpComparisonEssential Consulting A (Expenses by Department)WS A (Expenses by Department)The purpose of WS A is to identify all Direct Expenses (Salary vs. Other) id t th f ilit b dtt i t t t li ( C t incurred at the facility by department into cost Report lines ( cost Centers ).Criteria for Independent cost Centers Standard ( , preprinted) CMS line numbers and cost center descriptions Standard ( , preprinted) CMS line numbers and cost center descriptions cannot be changed.)

9 If you need to use additional or different cost center descriptions, add additional lines to the cost Report . Where an added cost center description bears a logical relationship to a standard line description, the added label must be inserted immediately after the related standard line. If additional lines are added for general service cost centers, add corresponding columns for cost Consulting 4090 (Co n t.) FORM CMS-2552-1012-10 RECLASSIFICATION AND ADJUSTMENT OF TRIAL BALANCE OF EXPENSES P ROVIDER NO.: P ERIOD: WORKSHEET A FROM _____ TO _____RECLASSIFIEDNETEXPENSESRECLASSIFIED NET EXPENSESCOST CENTER DESCRIPTIONSTOTALRECLASSIFI TRIAL BALANCEFOR ALLOCATION(omit cents)SALARIESOTHER(col. 1 + col. 2)CATIONS(col. 3 col. 4) ADJUSTMENTS (col. 5 col. 6)1234567 GENERAL SERVICE cost CENTERS 1 00100 Capital Related Costs-Buildings and Fixtures 12 00200 Capital Related Costs-Movable Equipment 23 00300 Other Capital Related Costs 0 3400400 Employee Benefits4400400 Employee Benefits45 00500 Administrative and General56 00600 Maintenance and Repairs67 00700 Operation of Plant78 00800 Laundry and Linen Service89 00900 Housekeeping910 01000 Dietary1011 01100 Cafeteria111201200 Maintenance of Personnel121201200 Maintenance of Personnel1213 01300 Nursing Administration1314 01400 Central Services and Supply1415 01500 Pharmacy1516 01600 Medical Records & Medical Records Library1617 01700 Social Service1718 Other General Service (specify)1819 01900 Nonphysician Anesthetists1920 02000 Nursing School20g21 02100 Intern & Res.

10 Service-Salary & Fringes (Approved)2122 02200 Intern & Res. Other Program Costs (Approved)2223 02300 Paramedical Ed. Program (specify) 23 INPATIENT ROUTINE SERVICE cost CENTERS 30 03000 Adults and Pediatrics (General Routine Care)3031 03100 Intensive Care Unit3132 03200 Coronary Care Unit3233 03300 Burn Intensive Care Unit3334 03400 Surgical Intensive Care Unit3435 O the r Spe c ia l C a r e ( s pe c if y)3540 04000 Subprovider - IP F4041 04100 Subprovider - IRF4142 04200 Subprovider (specify)4243 04300 Nursery4344 04400 Skille d N ur s ing Fa c ility4445 04500 Nursing Facility45 Essential Consulting 04600 Other Long Term Care46 FORM CMS-2552-10 (12/2010) (INSTRUCTIONS FOR THIS WORKSHEET ARE P UBLISHED IN CMS P UB. 15-II, SECTION 4013)40-524 Rev . 112-10 FORM CMS-2552-10 4090 (Co n t.)RECLASSIFICATION AND ADJUSTMENT OF TRIAL BALANCE OF EXPENSES PROVIDER NO.: PERIOD: WORKSHEET A FROM _____ TO _____RECLASSIFIEDNET EXPENSESCOST CENTER DESCRIPTIONSTOTALRECLASSIFI TRIAL BALANCEFOR ALLOCATION(omit cents)SALARIESOTHER(col.)