cost report help

General Questions:

When is my cost report due?

Typically a cost report is due five months after the fiscal year end (FYE). For example, if a facility FYE is 12/31/13, the cost report will be due on 5/31/14.

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We had under $200,000 in Medicare reimbursement for the cost report period. Are we required to complete a Medicare cost report?

The specifics vary by Medicare Contractor (aka Fiscal Intermediary or MAC). Typically, for Home Health Agencies, if it is under $200,000 in reimbursement, a facility will be allowed to complete a Low Utilization cost report. Note that if there are outstanding bills that are processed before the cost report is audited, and the reimbursement increases to be $200,000 at the time of audit, you may then be required to submit a full cost report. Also, some Intermediaries require formal written request to file a Low Utilization cost report.

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We opened a Home Health Agency in December. We had Medicare visits, but didn't start billing until end of January. Are we required to complete a Medicare cost report?

Yes. You will likely need to complete a Low Utilization cost report. Check with your MAC. If there were no Medicare visits, you could file a NO Utilization cost report.

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How do I file electronically? Does Medicare receive the files when we press the 'Create Electronic File' button?

When you press 'Create Electronic File' on the Med-Calc Software, this will generate two files. One is an ASCII file that contains the details of the cost report input and calculations. [Examples - Skilled Nursing Facilities would look like SN123456.13A1, Home Health Agencies would look like HH123456.13A, Hospices would look like HS123456.13A, and RHC/FQHC would look like RH123456.13A].

In the above examples, 123456 indicates the Medicare Provider Number, 13 indicates the year 2013, and A indicates the first submission within the cost reporting year.

The second file that is generated is known as the PI file which stands for Picture Image file. This is a snapshot of the cost report forms. The naming convention is PI123456.13A1 for SNF and PI123456.13A for all other providers.

Filing electronically / pressing the "Create Electronic File" does not mean that the files get e-mailed to CMS or uploaded to a website and sent automatically.

With regards to submitting an electronic cost report, filing electronically means that the ASCII and PI files are placed on a CD, flash drive or diskette and physically mailed to the Medicare Contractor.

Note: If placing files on a CD, be sure to remember to actually burn the files to the CD.  Files must be directly on the CD, flash drive, or diskette with no subdirectories.

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What needs to be submitted to the Contractor?

The specifics vary by Medicare Contractor. In general, the CD or flash drive should contain the Electronic Cost Report files and password protected bad debt files (if applicable). The original, signed signature page with the ECR encryption codes must be included, as well.  For cost reports which require CMS form 339, submit the original of this as well, signed with the contact information filled in.  The trial balance (sorted by cost report line number and sub-sorted by account) should be printed out.

Additionally, work papers should be created and submitted to provide additional documentation for reclassifications, adjustments, related party adjustments, and a PS&R crosswalk (if applicable).

There is also a cost report preparer workpaper that is optional and helpful in the event that the contractor will want to contact the preparer with questions.

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What types of items are non-allowable for Medicare purposes?

Examples are, but are not limited to:

  • promotional advertising
  • donations
  • bad debt expense
  • meals for guests
  • investment expenses

as well as other expense and/or revenues unrelated to providing patient care.

Additionally, there are pre-printed examples within each cost report on the adjustments worksheet.

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I have a Level II edit but it is intentional and isn't a mistake. Can I submit the cost report this way?

Yes. A Level II edit is allowed. Your intermediary/MAC may occasionally ask for documentation or a note to explain the rationale of why the Level II edit has been generated.

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I have a Warning but it seems ok. Can I submit the cost report this way?

Yes. A warning is a 'red flag' on the Med-Calc Software to warn of an inconsistency. This is not set by CMS but rather a courtesy for our clients.

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Medicare Cost Reports for Home Health Agencies:

The questions on Worksheet S-3 part I and part IV seem very similar. Can we enter the same information for both sections?

No. Each part is asking for slightly different information. Worksheet S-3, part I data should be inputted based on information from the internal records of the Home Health Agency. This is based on the number of visits and the number of patients that took place during the cost report year. This is regardless of when the actual 60 day episodes were completed.

Worksheet S-3, part IV comes from the PS&R (or internal data if you choose). This information relates to the number of visits and amount of charges from episodes that were completed during the cost report year.

The number of visits reported on worksheet S-3, parts I and IV will be different! The reason is the visits that occur at the end of the year which are part of episodes that overlap into the next year will not be included in part IV. Instead, they will be included in part I. Along the same lines, visits that took place at the end of the preceding year that were part of episodes that overlapped into the current year will be reported on worksheet S-3, part IV but not on part I.

An example:

For a 2013 calendar year cost report visits which took place during December 2012 that are part of 60 day episodes that were completed in January 2013 will be reported on worksheet S-3, part IV but not on part I. In the same vein, visits which occurred during December 2013 that are associated with episodes that completed during January 2014 will be included in worksheet S-3, Part I but not on part IV.

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Worksheet C, part III line 15 - what is the difference between column 3 and column 5?

Worksheet C, part III, line 15 asks for the charges of medical supplies. In column 3, total medical supply charges from the provider's internal records should be inputted. This should include both Medicare and non-Medicare charges. Column 5 is only for Medicare part A charges. Column 6 is for Medicare part B charges where there is no co-payment and column 7 is for Medicare part B charges that are subject to a co-payment. Column 3 should always be equal to or greater than the sum of columns 5 thru 7.

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What are FTEs and how do I come up with this information?

FTE stands for Full Time Equivalents. For each type of FTE employees, take the total hours paid for that type of employee (for example, all of the hours that physical therapists worked over the course of the year) and the divide it by the total work hours of the cost reporting period. If it is a full cost report year, divide the total hours by 2,080 (52 weeks x 40 hours per week).

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What is an unduplicated census?

Unduplicated census means that each patient is only being counted one time. For example, if Mary Smith received visits occupational therapists, physical therapists, and home health aides - she would be counted as a patient for each of those three lines. However, for the purposes of the unduplicated census, Mrs. Smith is one person and would thus only be counted once.

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Why is the total number of patients on worksheet S-3, part I, column 6 an input field? Can I just add together columns 2 and 4?

The reason is that the total number of patients on column 6 is also asking for an unduplicated count. If Mary Smith became eligible for Medicare during the course of the period and thus the payer source changed, she would be counted as both a Medicare patient and as well as a non-Medicare patient. However, being as she is only one individual, she would only be counted once in column 6.

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I have a payroll expense account that includes Skilled Nursing and all the therapist salaries lumped together. Should I code this as an Admin & General expense?

You can assign it to A&G but you should then reclassify the specific salaries by department on Worksheet A-4. The use of a work paper for this is highly encouraged.

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