For the first time in roughly fifteen years, skilled nursing facilities face a redesigned Medicare cost report. CMS replaced Form CMS-2540-10 with Form CMS-2540-24, and the new form applies to cost reporting periods ending on or after September 30, 2025. The redesign is more than cosmetic: it adds cost centers, splits revenue and statistics by payer, and demands far more detail on contract labor than the form it replaces.
Quick answer: Every Medicare-participating skilled nursing facility must file the new Form CMS-2540-24 for cost reporting periods ending on or after September 30, 2025, replacing the CMS-2540-10. The redesigned report adds new cost centers and contract-labor columns, separates Medicare Advantage and Medicaid managed-care statistics, and continues to require electronic submission to the facility’s Medicare Administrative Contractor by the last day of the fifth month after the reporting period ends.
This article explains what the SNF Medicare cost report is, why CMS overhauled it, exactly what changed on the new form, and how facilities should prepare so their first CMS-2540-24 filing is accurate and on time.
What Is the SNF Medicare Cost Report, and Why Did CMS Redesign It?
The Medicare cost report is the annual financial filing that every Medicare-certified skilled nursing facility submits to its Medicare Administrative Contractor (MAC). It reports the facility’s costs, charges, and statistics, and it supports Medicare reimbursement settlement, rate-setting, and federal policy analysis. For many operators, the cost report is also a foundational document that lenders, owners, and other regulators rely on.
Because the Medicare cost report feeds reimbursement settlement and future rate-setting, the quality of the data inside it has financial consequences that extend well past the filing itself. The numbers a facility reports become part of the record CMS uses to evaluate the sector and to set payment policy. A report built on loosely tracked costs can understate legitimate expenses and weaken the data CMS relies on.
The instructions for the new form live in Chapter 49 of the Provider Reimbursement Manual, Part 2, introduced by Transmittal 1. That chapter supersedes the CMS-2540-10 instructions that SNFs have used for well over a decade.
CMS redesigned the form to capture how skilled nursing has actually changed since the prior version. The sector now relies heavily on contract and agency staffing, a far larger share of residents are enrolled in Medicare Advantage and Medicaid managed care rather than traditional fee-for-service, and CMS wanted cleaner data on labor costs and quality-related spending. The CMS-2540-24 reflects those shifts by asking for information the old form simply did not collect.
When Does CMS-2540-24 Take Effect?
The new form applies to cost reporting periods ending on or after September 30, 2025. A facility with a September 30 fiscal year-end will use the CMS-2540-24 for its period ending September 30, 2025, while a calendar-year facility will use it for the period ending December 31, 2025.
There is no overlap period in which a facility may choose between the old and new forms. The reporting period end date controls: periods ending before September 30, 2025 use the CMS-2540-10, and periods ending on or after that date use the CMS-2540-24. Facilities and their software vendors needed updated electronic cost report systems in place to file under the new specifications.
Because the effective date is tied to period-end, the transition is already underway for fiscal-year filers and arrives at year-end for calendar-year operators. That makes the current reporting cycle the moment to understand the changes rather than discovering them at filing time.
What Actually Changed on the Form
The redesign touches both statistical and financial worksheets. Several changes increase the level of detail facilities must track in their general ledgers and payroll systems throughout the year, not just at filing.
Contract labor is the clearest example. Worksheet A now includes separate columns for contract labor, including amounts paid to 1099 vendors, so facilities must distinguish agency and contracted staffing costs from employed wages across cost centers. Worksheet S-3, Part V adds reporting of direct care contract labor costs by position, which means staffing data has to be captured at a more granular level than before.
For facilities that lean on agency nurses and aides, this is the change most likely to expose gaps in record-keeping. A payroll system that lumps agency invoices into a single overhead line cannot produce the position-level detail the new worksheet expects. The fix is to tag contract labor by cost center and position as the cost is incurred, not to reconstruct it after the period closes.
The form also adds new cost centers on Worksheet A, including Quality Assurance and Performance Improvement (QAPI), Training and In-Service Education, Patient Transportation for Part A, IV Therapy, IV Solutions, and Preventative Vaccines. Facilities that previously buried these costs in general or ancillary lines now need to track them separately so the cost report maps cleanly to the chart of accounts.
Payer-level reporting expanded as well. Worksheet S-3, Part I now requires Medicare Advantage and Medicare HMO days, admissions, and discharges to be reported separately from Medicaid HMO statistics, reflecting the growth of managed care. Worksheet G-2 separates revenue for room and board and for ancillaries by payer type. Worksheet S-2 adds CLIA certification information for facilities that operate an in-house laboratory. Taken together, these changes reward facilities whose accounting records already segregate cost, revenue, and census data by payer and by service line.
Filing Deadlines and Electronic Submission
The filing mechanics carry over from the prior form. Under 42 CFR 413.24(f)(4), each SNF must submit its cost report to the Medicare Administrative Contractor in the standard electronic cost report (ECR) format. Paper-only filing is not an option for the annual report.
The deadline also remains unchanged. A facility must file its cost report on or before the last day of the fifth month following the close of the reporting period. A facility with a December 31 year-end therefore faces a May 31 deadline. The MAC may grant an extension only in limited circumstances permitted by the regulation, so facilities should not count on extra time.
Late or rejected filings carry real consequences, including suspended interim payments, so an accurate first submission under the new form matters. Because the CMS-2540-24 asks for data the prior form did not, the practical risk is not just lateness but incompleteness, where a facility discovers at filing that it never tracked contract labor or the new cost centers separately during the year.
How SNFs Should Prepare
Preparation starts in the general ledger and payroll system, not at filing. Facilities should map the new cost centers and the contract-labor split into their chart of accounts now, so that QAPI, training, patient transportation, IV therapy and solutions, preventative vaccines, and agency staffing costs are captured separately as they are incurred rather than reconstructed after year-end.
Census and revenue tracking deserve the same attention. The form’s expanded payer detail rewards facilities that already record days, admissions, discharges, and revenue by payer and by Medicare Advantage versus Medicaid managed care. Operators that capture this data cleanly throughout the year will spend far less time and risk far fewer errors when the cost report is assembled.
A short internal checklist helps facilities pressure-test their readiness before the period ends:
- Does the chart of accounts have a separate line for each new cost center, including QAPI, training, patient transportation, IV therapy, IV solutions, and preventative vaccines?
- Can payroll and accounts payable isolate contract labor and 1099 vendor payments by cost center and position?
- Does the census system split days, admissions, and discharges by Medicare Advantage, Medicare HMO, and Medicaid managed care?
- Is room and board revenue tracked separately from ancillary revenue by payer type?
- For facilities with an in-house lab, is the CLIA certification information on hand for Worksheet S-2?
Working through that list early turns the CMS-2540-24 from a year-end scramble into a routine extract from systems that already hold the right data.
Coordinating early with experienced cost report preparers is the most reliable way to avoid surprises. Pease Bell’s cost report preparation services and its work with the skilled nursing and long-term care sector focus on getting the underlying data right so the filing follows naturally. Facilities with HUD 232 financing should also align their cost reporting with the financial statements their lenders expect, an area the firm’s HUD practice supports.
Frequently Asked Questions
When does the new CMS-2540-24 cost report take effect?
It applies to cost reporting periods ending on or after September 30, 2025, and it replaces the CMS-2540-10 for those periods. Periods ending before that date still use the old form.
What are the biggest changes in the new SNF cost report?
The form adds contract-labor columns on Worksheet A (including 1099 vendors), direct care contract labor by position on Worksheet S-3 Part V, new cost centers such as QAPI, training, patient transportation, IV therapy, IV solutions, and preventative vaccines, separate Medicare Advantage and Medicaid managed-care statistics, payer-split revenue on Worksheet G-2, and CLIA certification details on Worksheet S-2.
When is the SNF Medicare cost report due?
It is due on or before the last day of the fifth month after the reporting period ends, so a December 31 year-end produces a May 31 deadline. Filing is electronic, submitted to the facility’s Medicare Administrative Contractor.
Where are the official instructions for CMS-2540-24?
They are in Chapter 49 of the Provider Reimbursement Manual, Part 2, published by CMS and available through the CMS Provider Reimbursement Manual, Part 2.
The redesigned cost report rewards facilities that treat data quality as a year-round discipline rather than a filing-season scramble. Knowing what changed, mapping it into your accounting records now, and filing accurately by the fifth-month deadline is how skilled nursing operators turn the CMS-2540-24 transition into a clean, defensible submission.
