What Hospitals Need to Know About Cost Report Changes

What Hospitals Need to Know About Cost Report Changes Sue Brammer Partner, Kansas City Kevin Wellen Senior Managing Consultant, St. Louis To receive CPE credit: Participate in the entire webinar Answer the polls when they are provided If you are viewing this webinar in a group: Complete the group attendance form with The title and date of the live webinar Your company name Your printed name, signature and email address All group attendance sheets must be submitted to L&D@bkd.com within 72 hours of the live webinar If all eligibility requirements are met, each participant will be emailed their CPE certificates within 15 business days of the live webinar Learning Objectives Upon completion of this course, participants will be able to: Describe significant changes required by the new 2552-10 cost report form Identify changes needed in the way the new form reports, tracks and retains information used for cost reports Explain the key areas of focus as you prepare for the changes required by the new 2552-10 form 2

Agenda Form development Cost report changes Form changes Information tracking changes Implementation strategies Additional resources can be downloaded at: http://www.cms.gov/transmittals/2010trans/itemdetail.asp?filtertype=dual,%20keyword&filtervalue=2552-10&filterbydid=0&sortbydid=2&sortorder=descending&itemid=cms1242811&intnumperpage=10 3 History 2552-96 last major revision to hospital cost report forms 23 Transmittals 2552-10 July 2, 2009 Federal Register Draft 4/30/10 with 30 day comment period Final 12/30/10 Transmittal 1 Transmittal 2 is in process 4

History 2552-10 Cost report software has to be tested & approved by CMS 3-5 month process historically Applicable for CRP beginning on or after 5/1/10 FYE on or after 4/30/11 Short periods May be delayed 5 2552-10 Changes Reformatted questions More Title XIX information Obsolete lines, columns, worksheets eliminated Subscripts eliminated Insertion of 339 within S-2 6

WS S Certification & Settlement Part I must indicate electronic, manual or amended cost report Settlement adds column for HIT settlement 7 8

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WS S-2 Part I Identification CBSA number must be noted for each provider type Subproviders - Psych listed first followed by Rehab Previously providers had option Lines 24-25 paid & eligible days for DSH/LIP computation, but no direction as to how to use this information Reformatted old questions by section Lines 167 to 169 are new for HIT 9 10

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11 WS S-2 Part II Questionnaire Old 339 Provider Questions No longer submit separate 339 Exhibit 2 Physician hours will still be provided with cost report but is now Exhibit 1 Exhibits 3 & 4 are no longer applicable Exhibit 5 Bad debt log will still need to be provided with cost report but is now Exhibit 2 Exhibits 1 & 2 must be completed either manually or via separate electronic/digital media as information is not captured in ECR file Exhibit 6 is now WS S-3, Part IV 12

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WS S-2 Crosswalk See S-2 crosswalk Edits/warning messages 13 WS S-3 Part I Days/Discharges Ability to input HMO days for psych & rehab is available Medicaid & total observation reported Admitted vs. Not admitted 14

WS S-3 Part II V Wage Index Parts II & III Renumbered/reformatted Added Worksheet A Line number for reporting I&R & SNF Part IV Wage related costs Previously Exhibit 6 of 339 Part V Contract labor detail Contract labor & benefit detail columns 15 16

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17 WS S-4 HHA, S-7 SNF & S-8 RHC WS S-4 HHA information Cleaned up format Eliminated visits & patient information by discipline WS S-7 SNF information Included some information previously on WS S-2 Reformatted RUGs categories to go from highest to lowest reimbursement rates WS S-8 RHC information Cleaned up format such as removal of old lines for physician billing information 18

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WS S-10 Uncompensated Care Computes difference between net revenue & cost for: Medicaid SCHIP Other state or local government indigent programs Charity Bad Debt Uses overall CCR (see changes to Worksheet C) Now required for Critical Access Hospitals Data should exclude physician and/or other professional services for all lines 19 WS S-10 Uncompensated Care Line 2 Report net patient service revenue for Medicaid inpatient & outpatient covered services Includes payments from Medicaid managed care programs Include payments for any expansion SCHIP program which covers recipients who have been eligible for coverage under Medicaid Disproportionate share (DSH) and supplemental payments can be reported here if not separately identifiable DSH and/or supplemental payments should be reported net of provider taxes or assessments Line 3 Answer yes if you received or expect to receive DSH and/or supplemental payments from Medicaid 20

WS S-10 Uncompensated Care Line 4 If you answered yes to line 3; enter yes if all of the DSH and/or supplemental payments you received from Medicaid are included in line 2. Otherwise answer no and complete line 5 Line 5 Enter DSH and/or supplemental payments received or expects to receive from Medicaid not included on line 2. Must be net of provider taxes or assessments What if your provider tax has been allowable and is included in the cost to charge ratio from Worksheet C? 21 WS S-10 Uncompensated Care Line 17 Enter the amount of all non-government grants, gifts, and investment income received that is restricted to funding uncompensated care or indigent care Line 18 Enter all grants, appropriations or transfers received or expected from government entities for purposes related to hospital operations (including but not limited to funding uncompensated care). Include 1011 funds for undocumented aliens, if applicable Do not include funds from government entities designated for non-operating purposes (e.g., research or capital projects) 22

WS S-10 Uncompensated Care Charity care defined as Hospital demonstrates patient unable to pay Patient qualifies under hospital s charity care policy Includes full & partial charity care write-offs Excludes courtesy discounts Excludes discounts to uninsured who fail to qualify for charity Unpaid amounts associated with charity care are not considered as an allowable Medicare bad debt Line 20 is separated into two columns Uninsured patients Insured patients Line 20 is used within E series for EHR computation 23 WS S-10 Uncompensated Care Line 20 Charity Care Column 1 enter full charges of patients who are given a full or partial charity write-off Column 2 For patients covered by a government or private insurer enter the deductible and/or coinsurance payments given a charity write-off Non-covered services to Medicaid eligible patients or other indigent care programs can be included in charity care; if such inclusion is specified in the hospital s charity care policy. Includes charges for days exceeding a length of stay requirement Must answer the question on line 24 and complete line 25 24

WS S-10 Uncompensated Care Line 22 enter partial payments received or expected from patients who have been approved for partial charity care write-offs Exclude payments from payers The expected payment is necessary to not double dip bad debt and charity 25 WS S-10 Uncompensated Care Bad Debt Line 26 Enter total facility charges for bad debts written off or expected to be written off (bad debt expense) Exclude physician and/or other professional services Include the sum of all Medicare allowable bad debts (the amount before the reduction) Insured patients do not include bad debts that are the obligation of the insurer rather than the patient (e.g., denials) Bad Debt Line 27 Enter the Medicare reimbursable bad debts (e.g. WS E part A line 65) 26

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WS A Expenses Capital Costs line 1 & 2 (old capital lines deleted) Other Capital Costs line 3 instead of line 90.00 New Standard Cost Centers Computed Tomography (CT) Scan (line 57.00) Magnetic Resonance Imaging (MRI) (line 58.00) Cardiac Catheterization (line 59.00) 29 WS A Expenses Implantable Devices (line 72.00) Rural Health Clinic (line 88.00) Federally Qualified Health Center (line 89.00) Total (line 200.00) Left spaces for addition of new standard lines 30

WS A Expenses Subscripting still applies if you have more than one cost center within particular standard line Example Fragmenting overhead cost center such as A&G Multiple clinics See attached crosswalk example 31 32

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WS A-7 Capital Cost Centers Reformatted Part II & III reversed All providers have to complete A-7 must be done before WS A other capital costs can be completed for lines 1 & 2 HIT Designated Assets (line 7.00) To be used if Acquired certified HIT assets & EHR technology meaningful user (WS S-2, Part I, Line 167 is answered Yes ) 35 WS A-8 Offsets CAH HIT Adjustment for Depreciation & Interest (line 32.00) Only applicable to CAHs Removes depreciation & interest for EHR items paid under EHR payment methodology WS A-8-3 ASHEA limit computation for CAHs contracting for RT, PT, ST &/or OT 36

WS B Series Removed B Part II Renamed B Part III as Part II 37 WS C Part II Previously used to report reduction of capital If State pays for reduced capital, this is addressed via responses on WS S-2 Added other reimbursable cost centers for purpose of including these in computation of CCR for S-10 38

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WS D Part V Outpatient Charges Remember new cost centers in your Medicare crosswalk of revenue codes Reformatted to eliminate unnecessary columns Column 2 is PPS services Column 3 is cost reimbursed Column 4 is vaccines basically (eliminates need then for D, Part VI) Separate columns for charges only if something changes in your reimbursement during the year For example, if you if get TOPS & it expires within CRP 41 42

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WS D-3 Inpatient Charges WS D-4 Organ Charges previously input on WS D-4 will now be input on WS D-3 Inpatient Swingbed Psych Rehab Organ is now WS D-4 It used to be WS D-6 43 WS E Part A Settlement WS E, Part A Inpatient Settlement (PPS) Line 1 federal DRG payments Line 2 outliers Line 3 managed care WS E, Part B Outpatient Settlement For both, GME is feeding in from E-4 (used to WS E-3, Part VI) 44

WS E-1 Part II HIT Settlement Key to look at previous cost report worksheets to see how settlement is computing Medicare settlement for EHR 45 46

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47 Other WS E Settlement Forms WS E-2 Swingbed 2 Columns Part A Part B WS E-3, Part I TEFRA unit WS E-3, Part II Psych WS E-3, Part III Rehab WS E-3, Part IV LTACH 48

Other WS E Settlement Forms WS E-3, Part V CAH Inpatient WS E-3, Part VI SNF WS E-3, Part VII Title V &/or XIX With each program having their own settlement page, they were able to streamline them & eliminate confusion as to what is applicable to settlement 49 Other WS E Settlement Forms Worksheet E-4 Direct GME Use to be E-3 Part VI Reformatted & some streamlining 50

WS G Series Financial Statements Worksheet G Balance Sheet Added HIT designated assets & accumulated deprecation Rest of G series Reformatted but unfortunately no substantive changes 51 WS H Series HHA Reformatting but unfortunately no substantive changes Eliminated old H-1, H-2 & H-3 52

Rest of Worksheet Series Reformatted to make line numbers consistent & clean up minor issues but no substantive changes WS I Renal WS J Community mental health WS K Hospice WS L Capital WS M RHC 53 Next Steps Evaluate current recordkeeping in light of these changes Evaluate crosswalks of old numbers to new forms Stay tuned to new transmittals 54

Recordkeeping See document for significant record-keeping issues we identified Evaluate information you are currently tracking that may no longer be applicable Example Admitted vs. non-admitted observation Outpatient charges split out for different periods within cost reporting period Additional resources can be downloaded at: http://www.cms.gov/transmittals/2010trans/itemdetail.asp?filtertype=dual,%20keyword&filtervalue=2552-10&filterbydid=0&sortbydid=2&sortorder=descending&itemid=cms1242811&intnumperpage=10 55 Contact Information Sue Brammer, CPA, FHFMA Kansas City, MO 816.221.6300 sbrammer@bkd.com Kevin Wellen, CPA St. Louis, MO 314.231.5544 kwellen@bkd.com 56

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