Doctors writing down notes

2020 was quite an interesting year, and where we would be without a few proposed changes from CMS to our hospital cost report forms? Under the proposed revisions to the Hospital and Health Care Complex Cost Report (proposed Form CMS-2552-10, Transmittal 17), hospital providers can expect many upcoming changes as noted in the November 10, 2020, Federal Register. These changes are highlighted below. The proposed transmittal changes are effective for cost report periods ending on or after October 1, 2020, with the exception of the new Worksheet S-12. Worksheet S-12, which will be used to report the Medicare managed care negotiated charges, is effective for cost report periods ending on or after January 1, 2021. 

First, providers will notice a change in the instructions on Worksheet S, Part II related to the certification of the chief financial officer or administrator of the hospital. There will be a new column to identify if the cost report will be transmitted electronically with an electronic signature, transmitted with just an electronic signature, or with an original signature. 

Next, there also are several new lines on Worksheet S-2, Part I to better identify providers:

  • Line 41 will identify if the provider is in a subsection (d) of the 50 states, Washington, D.C., or Puerto Rico. If so, these providers will be required to complete the new Worksheet S-12
  • Lines 88 and 89 will capture permanent adjustments to the TEFRA target amount per discharge. These two new questions are applicable to facilities such as psychiatric, rehabilitation, children’s, cancer, long-term care, and hospitals located outside the 50 states and Puerto Rico. The response will affect Worksheet D-1, Part II, Lines 55.01 and 55.02, calculation of the target amount, and limit computation. 
  • Lastly, line 123 requires providers to report contracted services of legal, accounting, tax preparation, bookkeeping, payroll, and management/consulting services. If applicable, the provider must identify the percentage bracket (1 percent to 50 percent, 51 percent to 99 percent, or 100 percent) that represents how much of those expenses were purchased in a CBSA outside of the main hospital CBSA. CMS hasn’t yet indicated how this data will be used.

Effective March 1, 2020, through the end of the COVID-19 public health emergency, there will be an additional line added to Worksheet S-3, Part I. On Line 34, providers will be required to enter the number of acute-care beds and patient days made available to accommodate temporary expansion for COVID-19. These days are excluded from the calculation of the hospital inpatient bed days available on Worksheet E, Part A, Line 4.

In addition, Exhibit 3A, Listing of Medicaid Eligible Days for DSH Eligible Hospitals, has been added for supplemental information if Worksheet S-2, Part I, Line 24 or 25 contains Medicaid days. Thus, providers who receive Medicare DSH reimbursement will be required to complete Exhibit 3A. Providers will be required to list standardized detail that comprises the Medicaid eligible days, such as patients’ names, Medicaid recipient identification number, date of admission, and date of discharge. It’s important to note the exhibit requires the Medicare eligibility start date and end date. The additional exhibit will lead to a more effective and standardized review. 

Worksheet S-10, Hospital Uncompensated Care Data, has certainly caused many healthcare providers extra man hours during the past few years due to audits and additional documentation required for cost report submission. Detailed instructions have been added to the proposed form changes related to charity charges, payments, and bad debts depending on if the hospital’s cost reporting period beginning is prior to October 1, 2016, between October 1, 2016, and October 1, 2020, or begins on or after October 1, 2020. 

In addition, the following clarifications are noted within the updated instructions for Worksheet S-10:

  1. Patient charges for services related to uninsured COVID-19 patients that received HRSA-Administered Uninsured Provider Relief Fund payments as authorized under the Coronavirus Aid, Relief, and Economic Security Act shouldn’t be included in charity, are as they’re considered paid in full.
  2. Courtesy allowances and reductions in charges related to employee fringe benefits shouldn’t be included on Worksheet S-10.
  3. Bad debts from physician and other professional services, amounts already included in charity care, and amounts from privately insured patients shouldn’t be included in Medicare bad debts.
  4. Effective for cost reporting periods beginning on or after October 1, 2020, the Medicare and non-Medicare bad debts written off during the cost reporting period should only include bad debts related to general short-term hospital inpatient and outpatient services billable under the hospital CCN. For cost report periods beginning prior to October 1, 2020, the bad debts included bad debts for the entire hospital facility.

CMS has previously required DSH-eligible hospitals to provide detailed listings of charity care and bad debts that correspond to the amounts claimed on the Worksheet S-10, but no standardized format had been required. To assist in standardization of the data Exhibit 3B, Charity Care, and Exhibit 3C, Listing of Total Bad Debts, will be required to be submitted for inpatient prospective payment system hospitals eligible for DSH and UCC. Within the cost report instructions are detailed form instructions for the columns of data required along with examples of the exhibits. 

Also, the new Exhibit 2A, Listing of Medicare Bad Debts, will replace Exhibit 2. The format is similar to the current bad debt exhibit; however, it includes several new columns of required information. For example, Exhibit 2 had a column labeled “Remittance Advice Date.” Now there are two columns with that header, but they’re further clarified with “Medicare” and “Medicaid.” There also are new dates being required, and the descriptions are clearer, such as “A/R write off date,” “collection agency return date,” “collections ceased date,” and “Medicare write off date.” While these additional columns may cause more work in the first year of being implemented, once providers create their reports to include them, it could possibly make the desk review process go smoother than it has in recent years.

Three new worksheets also have been included in this proposed transmittal. The first one, Worksheet S-12, Median Payer-Specific Negotiated Charge Data, has been examined in another BKD Thoughtware® article. The other two are Worksheet D-6 and Worksheet E-5. Worksheet D-6, Computation of Acquisition Costs, is intended to calculate the costs associated with hematopoietic stem cells for transplant, as well as T-cells for CAR T-cell immunotherapy infusion. While this new schedule won’t affect a large number of providers, it could potentially have a material effect on their reimbursement. It’s very important that these facilities calculate how to accurately charge for these services in order to be reimbursed appropriately. This is even more important now that they’ll no longer be receiving new technology payments.

Worksheet E-5, Outlier Reconciliation at Tentative Settlement, will only be accessible by Medicare Contractors. It will be used to reconcile outlier payments during the cost report tentative settlement process.

Many of these new exhibits and worksheets are expected to increase providers’ time during preparation of their cost reports. Although many of these exhibits aren’t required until cost reports beginning on or after October 1, 2020, we recommend providers begin to review the required elements to help ensure data is being tracked accordingly.

Comments regarding the proposed revisions should be made by January 11, 2021, as documented in the Federal Register. If you have questions regarding your facility’s ability to provide the additional information as necessary or questions on the proposed changes, please reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.

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