Medicare Cost Report - A Definition Last updated 3/5/2024

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General Explanation

Medicare cost reports are used to report expenses for different types of Medicare reimbursable facilities, such as Skilled Nursing Homes (SNFs), Home Health Agencies (HHAs), Home OfficesHospicesRural Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs), Comprehensive Outpatient Rehabilitation Facilities (CORFs), End Stage Renal Dialysis providers (ESRDs), and hospitals.[1Every facility must complete and file a cost report on a yearly basis, with some extenuating circumstances requiring more frequent cost reports. Filing delays will affect reimbursement. Centers for Medicare and Medicaid Services (CMS), the United States government organization in charge of Medicare, regulates the specific requirements for these reports.[2]

Medicare cost report software is strictly monitored to be CMS-compliant so that reports will be accurate and fulfill all requirements. Approved software must be updated regularly to remain compliant with regulations. Only software from an approved vendor may be used.

Cost reports are due five months after the fiscal year end. Any delays are subject to withholding of Medicare reimbursement. Facilities will try to use these cost reports to maximize legal reimbursement by ensuring correct filing and reporting of fiscal data. Facilities with low or no Medicare utilization need to submit a low or no-utilization cost report, which does not include an ECR (see below).[3]

The cost report forms often change to reflect changes to regulations, as evidenced by the changes brought by the e-filing system mentioned below. Major changes will result in new transmittals of the forms.[4] While the forms are downloadable from the CMS website (see list of forms below), the forms from the website cannot be used to actually complete the full version of the cost report, since they do not create the ECR files.[5]

How to File Medicare Cost Reports

Cost reports must be submitted in electronic format, known as Electronic Cost Reports or ECRs. Submission requirements include submitting the ECR files and the signed signature sheet. Supporting fiscal documentation is required, and may vary by fiscal intermediary a.k.a. MAC (Medicare Administrative Contractor).[6] Cost reports are submitted to a facility's fiscal intermediary, assigned by the CMS. In the past, this was done only by mail or courier, and the files were sent via CD or flash drive together with the original signed signature page.

Current cost reporting rules allow for cost report signature pages to be signed "electronically". This means that they may be signed on the software itself or signed and then scanned back into a computer as long as the "Electronic Signature" checkbox on the signature page is checked. If it is not checked, the original, signed signature page must be sent in hard copy format.[7]

Cost reports may be filed online through the MCReF (Medicare Cost Reporting eFiling) portal.[8] CMS encourages online submission, however mail-in submissions are still acceptable.

What the Cost Report Measures

The different cost report forms measures different values.  For non-cost reimbursed facilities, these values are used in future rate-setting for prospective payment system (PPS) rates.  Some examples are as follows:

  • The Home Health Agency cost report measures cost per visit to the facility for each of the following services: 
    • Registered Nurses
    • LPNs
    • Physical Therapists
    • PTAs
    • Occupational Therapists
    • COTAs
    • Speech Therapists
    • Social Work
    • Home Health Aides
  • The Skilled Nursing Facility cost report measures cost per patient day to the facility.
  • The Hospice cost report measures cost per patient day per level of care to the facility for each of the levels of care below.  It further determines Medicare and Medicaid costs to the facility for each level of care.
    • Continuous Home Care
    • Routine Home Care
    • Inpatient Respite Care
    • General Inpatient Care.
  • The FQHC cost report measures cost per visit per practitioner for each of medical and mental health visits. Practitioner types measured are:
    • Staff Physicians
    • Contract Physicians
    • Physicians' Assistants
    • Nurse Practitioners
    • Visiting Registered Nurses
    • Visiting Licensed Practical Nurses
    • Certified Nurse Midwives
    • Clinical Psychologists
    • Clinical Social Workers
    • Registered Dieticians/ Certified Diabetes Self Management Trainers/ MNT Educators.
    • As of 2024:  Counselors
  • The RHC cost report determines the rate per covered visit for every Medicare visit and how much reimbursement is owed to/ from the facility.
  • The ESRD cost report measures the cost per treatment (hemodialysis) or per patient week (peritoneal dialysis) to the facility.

The Medicare cost report also determines if there are is any reimbursement due to or from the facility.  For facilities paid via PPS, there still may be reimbursement for bad debt or vaccines.  The final amount due to or from the facility is called the settlement and shows up on the Worksheet S (the signature page) of the cost report.

Cost Report Forms

As of March, 2024, the following are the updated cost report forms by facility for the more common providers.  For downloadable copies of the forms, visit our page on CMS Cost Report Forms and Instructions:

  • Form 1728-20: Home Health Agency
  • Form 2540-10: Skilled Nursing Facility
  • Form 287-22: Home Office
  • Form 1984-14: Hospice Facility
  • Form 222-17: RHC
  • Form 224-14: FQHC
  • Form 2552-10: Hospitals


  1.  "Cost Reports"Center for Medicare and Medicaid Services
  2.  "Cost Reporting"Centers for Medicare and Medicaid Services. CMS
  3.  "FAQs - Cost Reporting"Progressive Provider Services
  4.  "New Transmittals for Cost Report Software - Be Prepared"
  5.  "Do I Need to Purchase Software for My Medicare Cost Report"
  6.  "Medicare Cost Report Help - FAQs - PPS"