MEDICAID COST REPORT 4/17/2015. Medicaid Cost Report Agenda. Skilled Nursing Facility Cost Reports June 11, 2015

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1 Skilled Nursing Facility Cost Reports June 11, 2015 Presented By: Janine Mangione, Partner Matthew Boswell, Manager MEDICAID COST REPORT Medicaid Cost Report Agenda Medicaid Cost Report Update 2014 RHCF-2 Revisions 2014 RHCF-4 Revisions Other Pointers Finalization 3 1

2 Medicaid Cost Report Update The 2014 RHCF-2 and RHCF-4 cost report software are now available on the Health Commerce System (Released 4/15/2015) ( in.html) Due date is August 14, Failure to file on time will result in a 2% decrease in facility s per diem until filed. Medicaid cost report filing and certifications from independent auditors and operators are all due by this date. 4 Medicaid Cost Report Update For those facilities with a Part III, related company financials must be ed by this date. Submissions must be in PDF and to the BVAPR@health.ny.gov account. Failure to file an electronic copy will result in an incomplete cost report submission. If there has been a change in auditor or operator, be sure to update certification information by completing forms issued with the DAL and submitting to BVAPR@health.ny.gov as soon as possible. 5 Medicaid Cost Report Update Requests for changes in auditor or operator must be in no later than August 7, 2015 to ensure the updates occur by the final due date. DOH will not honor requests submitted after this date due to time constraints. 6 2

3 2014 RHCF-2 Revisions Configure Screen: Input for Permanent Facility Identifier (PFI) Number Input for County RHCF-4 Revisions Configure Screen: Input for Permanent Facility Identifier (PFI) Number Input for County Schedule O(2): Addition of Column for Number of Employees Terminated at Year End (No instructions added for this column) 8 Though the state has shifted to statewide pricing, your facility s costs will still end up in your Medicaid rate in some capacity. Certain costs are facility specific while some costs are aggregated into one overall statewide price. Schedule 8D, 9, 10, 11, 15, 17, Exhibit I (RHCF-4) Part III Related Company Capital Costs Exhibit 11, Exhibit 18 & Exhibit 44, (RHCF-2 & ICR) 9 3

4 Non-Comparable Costs Exhibit H, Miscellaneous Schedules Exhibit 11, Exhibit 18, RHCF Allocation of Expenses & Prescription Drug Schedule (RHCF-2 & ICR) Wage Equalization Factor Related Schedules Schedule 4/5/5A & Exhibit H (RHCF-4) Direct Charge Salaries RHCF Allocation of Expenses, Direct Charge Hours Paid, Exhibit 11, Exhibit 12, Exhibit 14, Exhibit 36 (RHCF-2 & ICR) 10 Schedule 8D & 9 Focus Points Insurance (Property, Boiler, Auto) - Be sure to break out separately. Interest Expenses - Separate interest by type (mortgage, working capital, or other). Rentals - Be sure to report all rentals, even small ones. Review supply accounts for any amounts that may have been recorded as a supply but is really a rental (i.e. silverware, tables and chairs for a function). 11 Schedule 8D & 9 Focus Points Depreciation - The amount reported here should reflect the depreciation on Schedules 10 and Exhibit H, unless the facility maintains separate Medicaid depreciation schedules. Be sure amounts can be supported by detailed fixed asset listings. Bad Debts - Report bad debt expense for the year. This amount is offset in the indirect component against administration. Mortgage Insurance Premium 12 4

5 Schedule 8D & 9 Focus Points Real Estate Taxes Capital Lease Payments - Report both depreciation and lease payments on capital leases. In the capital component, the lease payment is reimbursed rather than the depreciation. 13 Schedule 8D & 9 Focus Points Working Capital Interest (Schedule 8/8D) Be sure to report all lender information, include the purpose of the loan, interest rate and the amount of interest paid. Do not include any non-allowable working capital interest (i.e. interest paid to a related party, interest paid to DOH for recovery determinations, loans obtained to pay DOH for recovery determinations). WCI is reimbursed up to a regulatory threshold and is generally not reimbursed if the facility reports a profit for the year. 14 Complete Schedule 9 after the remainder of Part II is completed, as Schedule 9 must agree to numerous schedules in Part II including Schedule 10, 11, and

6 Schedule 10 & 11 Focus Points Have detailed fixed asset schedules readily available. Amounts reported on Schedule 10 and 11 should agree to those detailed fixed asset schedules. If there are discrepancies, be sure to document why in your file. Schedule 10 and 11 are focal points for OMIG audits. Review your prior year Schedule 10 and 11. Amounts should roll from prior years. 16 Schedule 10 & 11 Focus Points In the event that you maintain different depreciation and amortization schedules, be sure that you can identify and document any differences from the audited financial statements. 17 Schedule 15 Focus Points: Scan your trial balance for all rental accounts. The total amount by cost center should agree back to amounts reported on Schedule 9 and Exhibit H. If they do not, DOH will take whichever number is the lowest during the rate setting process. Scan your rentals to ensure they are reported in the appropriate cost center. Depending on your facility, there could be cost centers with different tracebacks, which makes it critical that you report your costs in the appropriate cost center. 18 6

7 Schedule 15 Focus Points: Do not utilize cost centers 001 and 002 to report rentals, as it will result in your facility not being reimbursed for the rental. In general, most rentals have a natural classification of 73 (indicated by a 73 within the account number). Review GL detail to ensure that all rentals have been accounted for. Even the one day rentals of items such as tents, tables, etc. for an event should be included as rentals on Schedule 15 to be reimbursed as capital. 19 Schedule 17 Focus Points: Ensure the entire amortization schedule is completed. Interest on debt is reimbursed on a current year basis, failure to fill out the entire amortization schedule could result in possible issues with reimbursement. Be sure to include mortgage insurance premiums. 20 Schedule 17 Focus Points: If you have a variable rate mortgage, be sure to evaluate the interest expense reported on Schedule 17 yearly. Changes in your variable rate could result in you being reimbursed too much or too little interest for the year. Both of these situations would require an appeal to correct. 21 7

8 Exhibit I Focus Points: In the instance that the facility has unrestricted investment income, the amount should be reported. Do not report restricted investment income (i.e. income earned on sinking funds or replacement reserves required by HUD). This amount is utilized to offset interest expense within the capital component of the Medicaid rate. 22 Part III Focus Points: Be sure to fill out the related company schedule 9 similar to the skilled nursing facility s schedule 9. Include all capital related costs (depreciation, rentals, etc). The Facility is reimbursed their percentage of business with the related company of these costs. 23 Exhibit 11, 18 & 44 Pointers (ICR) Evaluate and be sure to report all capital costs on the capital cost lines. If rentals are reported in other cost centers on the ICR, reclass them on Exhibit 12 to capital. Typically working capital interest is included as part of administration and reported on Exhibit 18. Ensure that all capital costs reported on Exhibit 11 flow to Exhibit 40 Report all directly assigned capital costs on Exhibit

9 Exhibit 11, 18 & 44 Pointers (ICR) Be sure to evaluate and review statistics on Exhibit 19 and 20, as they are utilized to allocate all costs (not just capital costs). 25 Non-comparable Costs: Medical Director s Office Volunteer Director Hearing Therapy Utilization Review (Be sure to report on Exhibit 18 of the ICR if applicable) Dental Medicine Cabinet Drugs (Schedule 6 RHCF-4 & Prescription Drug Schedule RHCF RHCF-2) 26 Wage Equalization Factor Schedules Schedule 4/Direct Charge Salaries Be sure to report all RN, LPN and Aides salaries appropriately. If there are individuals in the nursing administration line that provide direct patient care, the portion of direct patient care applicable should be allocated to the RHCF line. Be sure to have time studies to support any allocations. For RHCF-2 filers, the salary costs associated with the SNF line is included in the WEF calculation in its entirety. 27 9

10 Wage Equalization Factor Schedules Schedule 4/Direct Charge Salaries All therapists and therapy aides should be reported in the Technical Specialists & Aides/Orderlies columns on Schedule 4. Including therapist time in management and supervision will result in that time not being included within the WEF calculation. For RHCF-2 filers, the salary costs associated with the PT, OT and ST lines are included in the WEF calculation in their entirety. 28 Wage Equalization Factor Schedules Schedule 4/Direct Charge Salaries For WEF benefit allocations for hospital based homes, they re based on benefit allocations calculated by the Department of Health utilizing the information reported in the ICR and RHCF-2. Schedule 5/5A Be sure hours reported are appropriate for salaries reported on Schedule 4. These will be utilized as part of WEF calculations. 29 Wage Equalization Factor Schedules Direct Charge Hours Paid/Exhibit 36 Hours for hospital based WEF calculations are derived from the direct charge employees wage schedule in the RHCF-2 combined with an allocation of hours from Exhibit 36 of the ICR (for any areas not direct charge)

11 Wage Equalization Factor Schedules Exhibit H Maintain an appropriate benefit allocation: Salary Actual Cost by Cost Center Worker s Compensation by applicable rates (clinical vs. administrative staff) 31 Quality Pool Schedules (RHCF-4 & RHCF-2) Schedule O (1) & O (2) Report only contracted staff for RNs, LPNs and Aides on the appropriate lines (i.e. if you contracted Aides for Home Care services, do not include them on the SNF line). This schedule is utilized to compare to total SNF FTEs reported on Schedule 5. Homes with significant contracted staff will receive zero points in that quality pool measure. 32 Quality Pool Schedules (RHCF-4 & RHCF-2) Schedule O (1) & O (2) Schedule O (2) requires facilities to fill out the number of contracted employees, by cost center, as of the dates noted. Schedule P Schedule P is expected to be utilized in the future for possible quality pool measures. The schedule focuses on retention of staff. Be critical of reporting. If reporting terminations, be sure they are employees who have left service

12 Other Pointers Before starting your Medicaid Cost report: Obtain a listing of all items you need, and who will provide them. Review prior year cost report, Exhibit H and Natural Class Groupings. Review all allocations including payroll and benefit allocations. 34 Other Pointers Prefatory & configure data generally remains similar to prior year. Review for any changes. Any changes to schedules needed (i.e. Part III, Sch 17/18) must be done in the configure screen. Schedule 17 & Prefatory Data can be imported from the prior year cost report. 35 Other Pointers You can copy and paste from excel into the cost report software. Distribute the information you need to departments and have them fill in templates that will allow you to directly copy and paste into the reports. Schedules that should be done in this format: Part I - Statistics Exhibit H Schedule 4/5/5A Schedule

13 Other Pointers Be sure to utilize final financial statements when completing Part IV schedules (Exhibit A-E) that must tie to the financial statements. Follow Blue Book guidelines for proper reporting. If you utilize any other lines, be sure to type in a description. 37 Other Pointers Do not include costs on Exhibit H for items such as minimum pension liabilities and other postemployment benefits if they are not funded, as they are non-allowable. Be sure to evaluate square footage each year, as it is used to allocate cost. Ask have there been any major renovations or other projects? 38 Other Pointers At times, reclassifications may be necessary to move things into appropriate cost centers: Equipment rentals Nursing salaries & benefits Credit balances Interest & Depreciation Payroll Taxes & Benefits 39 13

14 Other Pointers Utilize the general notepad as necessary: For additional detail on anything in the cost report. As needed, if a sufficient number of lines are not provided on a Schedule. To show any additional reimbursement sensitive information for the DOH. DO NOT LEAVE BLANK. 40 Finalization Run and clear all edits Run stepdown Finalize cost report and generate DCN Auditor certification process & upload of final report Electronic certifications Operator CPA Send Part III statements, if applicable 41 MEDICARE COST REPORT 14

15 Waiver for Low Utilization Skilled nursing facilities could be eligible to file a waiver for low utilization if they meet the following criteria: Less than 10% Medicare Utilization, or Less than $200,000 in Medicare A + B net reimbursement 43 Waiver for Low Utilization Note that these are National Government Services (NGS) s criteria for low utilization. If NGS is not the intermediary for your Facility, these criteria will not apply. The Facility should contact their intermediary to determine if they can file such a waiver. 44 Waiver for Low Utilization If a facility opts to file a waiver for low utilization, the facility is required to submit: Certification page (Worksheet S) Applicable S-series worksheets (Worksheet S-3, Part 1) Request for Waiver of Electronic Filing of Medicare Cost Report Balance Sheet and Income Statement (Can be the worksheets from the cost report) 45 15

16 Waiver for Low Utilization Facility should submit request for waiver via . After approval, NGS will send a letter to the Facility indicating they have been approved for a low utilization filing. After this point, the aforementioned schedules should be mailed into the address provided in the letter. The certification page (Worksheet S) must contain an original signature. 46 Any questions? 47 Thank You! Janine Mangione, CPA, Partner , jmangione@bonadio.com Matthew Boswell, CPA, Manager , mboswell@bonadio.com 16

Medicaid and Medicare Nursing Home Cost Report Update. May 17, 2017

Medicaid and Medicare Nursing Home Cost Report Update May 17, 2017 Disclaimer: The material in this presentation, and presented during this webcast, is designed for, and intended to serve as an aid to,