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GET A HEAD START: Gathering Cost Report Information Will Ease Some Tension Later


As the year end quickly approaches, it's time to start thinking about filing the Medicare cost report and gathering the appropriate data for timely and accurate completion. Key reminders include:

  • Check/update IACS registration status (needed obtain the PS&R report)
  • Update cost report software to the most recent version
  • Set Trial Balance on the “accrual basis of accounting” as stated by Medicare regulations
  • Gather the statistical data
  • Review the general ledger for inaccurate postings
  • Make the following accounts distinguishable by discipline:
    • Payroll
    • Mileage (travel)
    • Contract service cost
  • Segregate medical supplies into billable and routine
  • Determine allowable versus non-allowable marketing/advertising costs
  • Analyze dues expense and disallow all lobbying costs
  • Update asset register and record current depreciation expense. (Medicare regulations require that assets be depreciated using the straight-line methodology.)
  • Rpeort (at cost) all related party transactions
  • Make Telehealth costs easily identifiable, as they must be reported in a non-reimbursable cost center.
    • Payroll cost
    • Equipment Lease costs

For hospice providers, some additional information must also be readily available for the cost report: 

  • Segregate the cost of the volunteer coordinator
  • Detail volunteer hours by category
  • Make continuous care expenses distinguishable by RN and HHA
  • Place fundraising costs are in a separate account (and not net against fundraising revenue)
  • Maintain nursing home room & board revenue and expense in two separate accounts (not netted together)
  • Separate complimentary therapies (art, massage, music & pet) in their own expense account. (These costs must be reported in a non-reimbursable cost center.)

For freestanding hospice providers, it is imperative to pay close attention to the recent changes made to the hospice cost report (CMS Form 1984-14), effective for cost reporting years beginning on or after October 1, 2014.  Start revamping the chart of accounts now.  Home health-based hospice’s can also expect changes to the K-schedules in the very near future, so be pro-active and don’t wait until the last minute.

Cost reports are utilized for future reimbursement rates, so it is imperative they are filed accurately. The more detailed the general ledger, the easier it becomes to accurately gather data and file the cost report.