Medicare Cost Reports
Medicare cost report preparation and MAC audit support for skilled nursing, hospital, home health, and hospice providers.
Overview
Every Medicare-certified skilled nursing facility, hospital, home health agency, and hospice must file an annual Medicare cost report with its Medicare Administrative Contractor (MAC). The report pulls together statistics, costs, and charges in the format CMS requires, and the data feeds payment settlements and CMS payment policy. Errors can lead to adjustments, delayed settlements, or rejected filings. Pease Bell prepares Medicare cost reports and supports providers through MAC desk reviews and audits, tying the report back to the general ledger and statistical records.
Pease Bell has served healthcare providers for about 20 years and works with roughly 600 facilities in about 35 states. Because we also provide audit and tax services to many of those providers, we prepare cost reports with a working knowledge of how the financial statements, trial balance, and cost report need to reconcile. Medicaid cost reports are handled as a separate state-specific engagement.
How We Help with Medicare Cost Reports
Annual Cost Report Preparation
We prepare and file your Medicare cost report in the CMS-required format for your provider type, reconciling costs, charges, and statistics to the trial balance and supporting records.
Cost Allocation and Statistics
We help gather and review the statistical bases, such as square footage, patient days, and time studies, used to allocate overhead costs across departments and cost centers.
Medicare Bad Debt
We help assemble and review Medicare bad debt listings and documentation of collection efforts so the amounts you claim on the cost report are supported under Medicare reimbursement rules.
Wage Index Data
We help hospitals prepare and support the wage and hours data reported on the cost report, which is used in developing the Medicare wage index that adjusts payments by area.
Desk Review and Audit Support
We respond to MAC information requests, prepare supporting schedules, and help providers understand, evaluate, and where appropriate challenge proposed audit adjustments after the cost report is filed.
Appeals and Reopenings
We help evaluate whether audit adjustments or settlement determinations warrant a reopening request or appeal, and prepare the financial support that your counsel or appeals team needs.
Challenges We Help You Address
- ✓Cost report figures that do not reconcile to audited financial statements
- ✓Weak support for statistics used in overhead cost allocation
- ✓Medicare bad debt claims reduced for missing collection documentation
- ✓MAC desk review requests arriving with short response windows
- ✓Wage data inaccuracies that can affect future hospital payments
Featured Insights
Frequently Asked Questions
What is a Medicare cost report?
A Medicare cost report is an annual filing that Medicare-certified institutional providers, such as hospitals, skilled nursing facilities, home health agencies, and hospices, submit to their Medicare Administrative Contractor. It reports facility statistics, costs, and charges in a format set by CMS. The MAC uses it to settle certain payments, and CMS uses cost report data to develop and update payment rates.
Who reviews and audits Medicare cost reports?
Medicare cost reports are reviewed by the provider’s Medicare Administrative Contractor (MAC). After a report is accepted, the MAC may perform a desk review and, for some providers, a field audit, then issue a Notice of Program Reimbursement reflecting any adjustments. Providers that disagree with adjustments may have reopening or appeal rights, which are subject to specific time limits.
What is Medicare bad debt on the cost report?
Medicare bad debt generally refers to unpaid deductible and coinsurance amounts owed by Medicare beneficiaries that a provider was unable to collect after reasonable collection efforts. Allowable bad debts can be claimed on the cost report and partially reimbursed. Claims must be supported by documentation of the collection effort and meet CMS requirements, which is a frequent focus of MAC review.
How is a Medicare cost report different from a Medicaid cost report?
A Medicare cost report follows a single federal format set by CMS for each provider type and is filed with the Medicare Administrative Contractor. Medicaid cost reports are designed and administered by each state, so forms, allowable cost rules, and how the data is used in rate setting vary from state to state. Many providers file both, and the two should be prepared consistently.
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