Traditionally, hospitals and health systems have relied on their regulatory reimbursement department for Medicare cost report preparation and review. As the industry experiences increased complexity, regulatory professionals also can play a critical role in compiling gross and net revenue budgets, monitoring open cost reports for settlement, estimating cost report settlements for year-end financial statement preparation, and preparing needed information for reports required by federal and state governmental agencies.
The cost report includes several sections that are vital to the reimbursement provided to the hospital such as Medicare S-10 uncompensated care, area wage index, Medicare bad debt reporting, and Medicare disproportionate share calculations. The Medicare cost report also can be used for some aspects of Medicaid reimbursement through the Medicaid DSH survey or rate-setting process specific to the state.
- The budgeting process for your organization is complex and requires a robust understanding of the regulatory environment, which affects net revenue calculations expected in the future. Your reimbursement professionals can help estimate the effect of operational changes in the current regulatory environment to project net revenue as accurately as possible.
- Medicare and Medicaid third-party contractors are responsible for review or audit of the organization’s cost reports. These agencies review cost reports on timelines that vary based on industry factors, so it is possible to have multiple years open at any given time. Your regulatory department will monitor each open year to determine status and follow up on any potential settlement impacts.
- During the month-end and year-end financial statement preparation process, estimates related to cost report settlements for the current year are maintained. This requires an understanding of the interim reimbursement rates as well as any changes in the current period that might result in a material settlement impact.
- Medicare and Medicaid cost reports are required on an annual basis along with other reporting requirements of the state and federal programs. Your regulatory department prepares needed information for the cost reports and reviews other reports provided to the federal and state governments.
The regulatory reimbursement environment has never been more complex, and as the industry continues to increase in complexity, regulatory reimbursement professionals will continue to play a vital role in helping organizations adapt to changes and capture the funding intended for them.
If your organization does not have a reimbursement department or is going through a transition in leadership, BKD can help. Many of these tasks can be outsourced, or our professionals can help train your next leadership team to take your hospital into the future.
To find out how BKD Trusted Advisors™ can help you take your regulatory reimbursement department to the next level, visit our site and read more about our regulatory co-sourcing and outsourcing enterprise solutions or fill out the Contact Us form below.