HOSPITAL FINANCIAL MANAGEMENT ASSOCIATION CHICAGO CHAPTER CMS FORM
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1 Presentation to: HOSPITAL FINANCIAL MANAGEMENT ASSOCIATION CHICAGO CHAPTER CMS FORM Learning Objectives: To provide participants with a description of the pertinent changes to the Medicare cost reporting forms, including the new data requirements, to be utilized in the preparation of the Medicare Cost Report. October 17, 2011
2 CMS Current cost report Form has been effective since FYE 9/30/ subsequent transmittals to update for regulatory and other changes. CMS published draft forms and instructions for on July 2, day window for review and comments. Public comments were incorporated in a Federal Register notice on August 30, The final Form was published December 30, 2010 and will apply to cost reports periods beginning on or after May 1, The new instructions are available at The new cost report forms are available for download at 2
3 CMS Transmittal 2 came in August of 2011, but the forms are still not open for implementation. All providers with full 12 month or greater cost reporting periods beginning May 1, 2010 (ending on/after April 30, 2011) must file and settle on
4 CMS Extended Cost Report Due Dates Due to delays in issuing the final forms and the changes that still need to be made, CMS has approved the following filing extensions: 4
5 CMS Summary of Revisions Clarify existing instructions and definitions. Standardize subscripted lines and columns, renumber forms. Reorganize data on Worksheet S-2, to allow for better flow of the cost report. Remove obsolete worksheets and delete obsolete cost centers. Assign standard reporting lines and separate settlement worksheets for the following: Inpatient Psychiatric Facility or subprovider Inpatient Rehabilitation Facility or subprovider Long Term Care Hospital Include worksheet for Graduate Medical Education calculation 5
6 CMS Summary of Revisions (Cont.) Include Worksheet S-2 Part II to: Incorporate data previously reported on CMS-339, Provider Cost Report Reimbursement Questionnaire. Require electronic submission as part of the cost report electronic filing. Eliminate separate submission of FORM CMS-339. Include Worksheet S-3, Part IV to collect wage index information previously reported on FORM CMS-339. Include Worksheet S-3, Part V to collect contract labor and benefit costs. Include Worksheet E-1, Part II to track the Health Information Technology payments. Redesign numerous worksheets for more efficient collection of data. 6
7 S Series Worksheet S Added Part I Cost Report Status, Part II Certification, Part III Settlement Summary. Part I Added line 4 to specify whether the cost report is F for full or L for low Medicare Utilization (requires prior contractor approval). Added a HIT Settlement column to track the HIT payments made by the MAC/FI. 7
8 S Series Worksheet S-2 S-2 replaced by S-2 Part I and Part II S-2 Part I Expanded the questions that will generate other worksheets on the cost report. Added lines 15 and 16 for RHC/FQHC. Inpatient PPS Line 22, added a P response for Pickle Amendment. Added line 23 to account for the method used to account for Medicaid days. Lines 24 and 25 should include labor and delivery days. Added lines 61 through 67 to accommodate and implement sections 5503, 5504, and 5508 of the Patient Protection and Affordable Care Act. 8
9 S-2 Part I S Series Worksheet S-2 Added lines 95 and 97 to contain Title XIX reduction for capital and operating cost to activate Worksheet C, Part II. Added line Did this facility incur and report costs for implantable devices charged to patients? Enter "Y" for yes or "N" for no. (Line 72) Modified line 140 dealing with chain home office numbers. Added lines 167, 168, and 169 regarding the HIT payments. 9
10 S-2 Part II S Series Worksheet S-2 Replaces the hard copy of CMS-339 Exhibit 1 questionnaire. Exhibits 2-5 still have to be submitted separately. Lines 1-21 are to be filled out by all hospitals, lines are required to be filled out by cost reimbursed and TEFRA hospitals only. PS&R paid through date moved from S-2 to S-2 Part II. 10
11 S-3 Part I S - Series Worksheet S-3 Re-designated subscripted lines and columns into whole number lines and columns. Eliminated columns 9 12 dealing with observation beds for Title XVIII and XIX. Column 1 was added to cross reference to WS A. Added line 32, labor and delivery days, for column 7, Title XIX and for the total facility, column 8. S-3 Part II & III Re-designated subscripted lines and columns into whole number lines and columns. Modified column 1 to allow for cross references to Worksheet A. S-3 Part IV New worksheet to capture wage related costs that were on the CMS-339 questionnaire. No changes noted to core categories. 11
12 S-3 Part V S Series Worksheet S-3 New worksheet to capture Contract Labor and Benefit Costs. 12
13 S-4 S-5 S-6 S-7 S-8 S-9 S Series Re-designated the subscripted lines and columns into whole number lines and columns. Re-designated the subscripted lines and columns into whole number lines and columns. Re-designated the subscripted lines and columns into whole number lines and columns. Redesigned worksheet provides all of the statistics for hospital based skilled nursing facility (SNFs). Re-designated the subscripted lines whole number lines. No change. 13
14 S Series Worksheet S-10 Completely redesigned from S-10 of Form Critical Access Hospitals (CAHs) are now required to complete form. Not to include payments for physician or other professional services for all lines. Computes the difference of net revenues and costs for: Medicaid State Children s Health Insurance Program (SCHIP) Other state and local government indigent care programs Uncompensated Care Charity Care Bad Debt 14
15 S-10 (Cont.) Some definitions have been revised : Uncompensated Care S Series Worksheet S : Defined as charity care and bad debt : Defined as charity care and bad debt which includes non-medicare bad debt and nonreimbursable Medicare bad debt. Uncompensated care does not include courtesy allowances or discounts given to patients. Charity Care : Health services for which hospital policies determine the patient is unable to pay. Charity care results from a provider s policy to provide health care services free of charge (or where only partial payment is expected not to include contractual allowances for otherwise insured patients) to individuals who meet certain financial criteria. For the purpose of uncompensated care charity care is measured on the basis of revenue forgone, at full-established rates. Charity care does not include contractual write-offs : Health services for which a hospital demonstrates that the patient is unable to pay. Charity care results from a hospital's policy to provide all or a portion of services free of charge to patients who meet certain financial criteria. For Medicare purposes, charity care is not reimbursable and unpaid amounts associated with charity care are not considered as an allowable Medicare bad debt. (Additional guidance provided in the instruction for line 20.) 15
16 S-10 (Cont.) Definitions added S Series Worksheet S-10 Definition for Bad Debt has been replaced with the following: Non-Medicare bad debt--health services for which a hospital determines the non-medicare patient has the financial capacity to pay, but the non-medicare patient is unwilling to settle the claim. (Additional guidance provided in the instruction for line 25.) Non-reimbursable Medicare bad debt--the amount of allowable Medicare coinsurance and deductibles considered to be uncollectible but are not reimbursed by Medicare under the requirements of of the regulations and of Chapter 3 of the Provider Reimbursement Manual Part 1. (Additional guidance provided in the instruction for line 25.) Net Revenue Actual payments received or expected to be received from a payer (including co-insurance payments from the patient) for services delivered during this cost reporting period. Net revenue will typically be charges (gross revenue) less contractual allowance. (Applies to lines 2, 9, and 13.) 16
17 S-10 Medicaid S Series Worksheet S-10 Line 2: Net Revenue for Medicaid - Enter net revenue from inpatient and outpatient payments received or expected for Medicaid covered services. Include payments for an expansion SCHIP program, which covers recipients who would have been eligible for Medicaid. Include payments received from Medicaid managed care. Disproportionate share (DSH) and supplemental payments should be included in this line, if not separately identifiable and should be reported net of associated provider taxes and assessments. Line 3: Enter Y for yes if you received or expect to receive any DSH or supplemental payments from Medicaid relating to this cost reporting period. 17
18 S-10 Uncompensated Care S Series Worksheet S-10 Line 17: Enter the value of all non-government grants, gifts and investment income received during this cost reporting period that were restricted to funding uncompensated or indigent care. Include interest or other income earned from any endowment fund for which the income is restricted to funding uncompensated or indigent care. Line 18 - Enter all grants, appropriations or transfers received or expected from government entities for this cost reporting period for purposes related to operation of the hospital, including funds for general operating support as well as for special purposes (including but not limited to funding uncompensated care). Federal Section 1011 program for undocumented aliens. Do not include funds from government entities designated for non-operating purposes. 18
19 S-10 Charity Care S Series Worksheet S-10 Column 1 Uninsured Patients: Total charges for patients with coverage from an entity that does not have a contractual relationship with the provider. Column 2 Insured Patients: Deductible and coinsurance payments required by the payer for patients covered by a public program or private insurer with which the provider has a contractual relationship. 19
20 S-10 Charity Care S Series Worksheet S-10 Line 20 Charges for uninsured patients given discounts can be included as long as they meet the hospital's charity care criteria. Charges for non-covered services provided to patients eligible for Medicaid or other indigent care programs, if such inclusion is specified in the hospital's charity care policy and the patient meets the hospital's charity care criteria. Includes charges for days exceeding a length of stay limit (answer question 24 and complete 25). Line 20 is used in the EHR incentive calculation in the E series. Line 22 Enter payments received or expected from patients who have been approved for partial charity care for services delivered during this cost reporting period. 20
21 S-10 Bad Debts S Series Worksheet S-10 Line 26 Enter the total facility charges for bad debts (bad debt expense) written off or expected to be written off for the entire hospital complex. Include the sum of all Medicare allowable bad debts. For privately insured patients, do not include bad debts that were the obligation of the insurer rather than the patient. Line 27 Enter the sum of all 1886(d) Medicare reimbursable bad debts appearing on Worksheet E, Part A, line 65; and E, Part B, line 35; or CAHs from Worksheet E-3, Part V, line
22 A Series Worksheet A Eliminated Old Capital and New Capital designations. Cost center line numbers have been changed (see crosswalk). Lines 1 3: Capital Lines 4 23: Other Overhead Lines 30 46: Routine Lines 50 76: Ancillary Lines 88 93: Outpatient Lines : Other Reimbursable Lines : Special Purpose Lines : Nonreimbursable Subscripted lines still allowed when you have more than one cost center applicable to a standard line. Assigned standard cost center lines for subproviders: Line 40 for inpatient psychiatric facility (IPF) and Line 41 for inpatient rehabilitation facility (IRF). Added new cost centers: Line 57 CT Scan Line 58 MRI Line 59 Cardiac Cath 22
23 A-6 A-7 A-8 No changes. A Series Minor changes to conform to Worksheet A. Added line 7 to track HIT assets. A-8-1 Minor changes to conform to Worksheet A. Added instructions for columns 1 through 6. Minor changes to conform to Worksheet A. A-8-2 No changes. A-8-3 Parts I-VII A-8-4 Designated worksheet for cost reimbursed providers. Eliminated 23
24 B Part I B-1 B Series Eliminated Old Capital and New Capital designations. Re-designated the subscripted lines and columns into whole number lines and columns. Eliminated Old Capital and New Capital designations. Re-designated the subscripted lines and columns into whole number lines and columns. Old B, Part III is now B, Part II Allocation of Capital Related Costs B-2 Minor changes to conform to Worksheet A. 24
25 C, Part I II C Series Re-designated the subscripted lines and columns into whole number lines and columns. C, Parts III IV Eliminated 25
26 D, Parts I V D-1 D-2 Minor Changes Minor Changes Minor Changes D-4 is now D-3 D-6 is now D-4 D-9 is now D-5 D Series 26
27 E Series E, Part A and Part B Re-designated the worksheet to eliminate obsolete lines and convert subscripted lines into whole numbers. E, Part A Line 1 Federal DRG payments (no payment splits) Line 2 Outlier payments Line 3 Managed care payments Added lines 7.01, 8.01 and 8.02 to implement sections 5503 and 5506 of the Affordable Care Act. Eliminated Worksheets E, Part C, D and E. E-1 split into Part I and II. E-1, Part I Eliminated the signature line. 27
28 E Series E-1, Part II New worksheet added to track the additional payments made by the MAC for HIT acquisitions. E-2 Minor Changes E-3, Part I Now used exclusively by TEFRA reimbursed providers. E-3, Part II New worksheet to be used exclusively by Inpatient Psychiatric Providers. E-3, Part III New worksheet to be used exclusively by Inpatient Rehabilitation Providers. E-3, Part IV New worksheet to be used exclusively by Long Term Care Providers. 28
29 E Series Worksheet E-3, Part II is now Worksheet E-3, Part V and is now to be used by cost reimbursed providers only Worksheet E-3, Part III is now Worksheet E-3, Part VI and now applies to Title XVIII SNF reimbursement. E-3, Part VII New worksheet for Title V & Title XIX SNF reimbursement E-3, Part IV is replaces with E-4 New worksheet to calculate Direct Graduate Medical Education and ESRD Direct Graduate Medical Education costs. Lines 3.01, 4.01 and 4.02 added to implement sections 5503 and 5506 of ACA, which impact GME cap. 29
30 G Series G Re-designated the subscripted lines into whole number lines. Added lines 27 and 28 to track HIT assets and related accumulated depreciation. G-1, G-2 and G-3 have minor changes. 30
31 H No Change H Series H-1, H-2 and H-3 Eliminated worksheets. All data now on WS H. H-4, Parts I & II renamed H-1, Parts I & II Eliminated Old Capital and New Capital designations. Re-designated the subscripted lines and columns into whole number lines and columns. H-5, Parts I & II renamed H-2, Parts I & II Eliminated Old Capital and New Capital designations. Re-designated the subscripted lines and columns into whole number lines and columns. H-6 renamed H-3 and redesigned to eliminate obsolete data requirements. H-7 renamed H-4 and redesigned to eliminate obsolete lines. H-8 renamed H-5 Eliminated the signature line. 31
32 Other Worksheet Series Re-designated lines to conform to the rest of the cost report. No significant changes. Series I Renal Dialysis Series J Community Mental Health Series K Hospice Series L Capital Series M Rural Health Clinic 32
33 EHR INCENTIVE PROGRAM 33
34 EHR Incentive Program Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted on February 17, 2009, as part of the American Recovery and Reinvestment Act of 2009 (ARRA) (PubLNo 111-5). Authorizes payment incentives under Medicare for the adoption and use of certified EHR technology beginning in FY Must meet the following criteria to qualify for payment: Use certified EHR in a meaningful manner. ( Meaningful user ) Use certified EHR technology for electronic exchange of health information to improve quality of health care. Use certified EHR technology to submit clinical quality and other measures. 34
35 EHR Incentive Program EHR Incentive programs apply to both Medicare and Medicaid, but the programs differ. Medicare Incentive program is run by CMS. Medicaid program is run by the state. In order to be considered dual eligible for Medicare and Medicaid incentive programs, hospitals need to meet the following criteria: Be a subsection (d) hospital in the 50 U.S. States or the District of Columbia, or a Critical Access Hospital (CAH); Have a CMS certification number ending with or ; and Have at least 10% of your patient volume derived from Medicaid encounters. 35
36 EHR Incentive Program MEDICARE PPS Hospitals If successful in demonstrating meaningful use of certified EHR technology, hospitals may receive incentive payments for up to 4 years, beginning FFY 2011 (October 1, 2010 and September 30, 2011) Last year to receive payments is For the first year, the EHR Reporting Period equals any 90 continuous days beginning and ending within the year. 36
37 MEDICARE PPS Hospitals EHR Incentive Program Incentive payment = [Initial Amount] x [Medicare Share] x [Transition Factor] Initial Amount = $2 million base payment + ($200 per discharge for the 1,150 th 23,000 th discharge) Medicare Share = (IP Days Part A + Part C) / Total IP Days x ((Total Charges Charges for Charity Care) / Total Charges) Transition Factor 37
38 MEDICARE PPS Hospitals Health Information Technology If providers qualify after 2013, their payment calculations will be made as if they qualified in Transition factor modified accordingly. Beginning 2015, all hospitals and CAHs who are not yet meaningful users will have their payments decreased. 38
39 EHR Incentive Program MEDICARE PPS Hospitals (Cont.) Incentive payments will also be made to Medicare Advantage (MA) organizations for the adoption of meaningful use of EHR technology by their affiliated eligible hospitals. MEDICARE Critical Access Hospitals (CAHs) Qualified when meets the definition of a meaningful user. Can qualify to receive payments from both Medicare and Medicaid programs. Incentive payment time frame same as hospital. Unlike hospitals, qualified CAHs can receive incentive payments for the reasonable costs incurred for the purchase of depreciable assets (i.e. computers, hardware, software), necessary to administer certified EHR technology.(enter costs on E-1, Part II, line 7) Exclude any depreciation and interest expenses associated with the acquisition. 39
40 EHR Incentive Program 40
41 EHR Incentive Program MEDICARE Critical Access Hospitals (CAHs) (Cont.) Incentive payment = reasonable costs incurred during purchase of technology x Medicare share percentage Medicare Share percentage equals the lesser of (1) 100 percent; or (2) the sum of the Medicare share fraction for the CAH and 20 percentage points. MEDICAID Acute care hospitals must have at least 10% Medicaid patient volume to participate. Payment calculation: Overall EHR x Medicaid Share Overall EHR = {Sum over 4 year of [(Base Amount Plus Discharge Related Amount Applicable for Each Year) x Transition Factor Applicable for Each Year]} Medicaid Share = {(Medicaid inpatient-bed-days + Medicaid managed care inpatientbed-days) divided by [(total inpatient-bed days) times (estimated total charges minus charity care charges) divided by (estimated total charges)]} 41
42 FEDERAL REGISTER FINAL RULE HOSPITAL INPATIENT AND LONG TERM CARE PROSPECTIVE PAYMENT SYSTEM 76 FR Published August 18,
43 IPPS Medicare Payment Rates Operating payments will increase by 1.1% or $1.2 billion under the IPPS FY 2012 rate updates. The proposed rule had called for a decrease in payments of 0.55%. The final rule does not implement the 3.15 percent cut for changes in documentation and coding initially proposed by CMS A documentation and coding cut of 1.9% remains This cut will be restored in FY CMS recoupment of past overpayments will be complete as of FY 2012 Payments to Hospitals not reporting on the quality measures will be decreased by 0.8% 43
44 IPPS Medicare Payment Rates Chicago Area Blended Payment Rate Effective Date 10/1/ /1/2010 Labor-Related $ 3, $ 3,552,91 Chicago Area Wage Index Wage Adjusted Labor Rate $ 3, $ 3,732,33 Non-Labor-Related $ 1, $ 1,611,20 Blended Payment Rate $ 5, $ 5,343,53 Percentage Increase Chicago CBSA 0.42% 44
45 IPPS Medicare Payment Rates Capital Payment Rates Effective Date 10/1/ /1/2010 Federal Capital Rate $ $ Chicago (GAF) (Geographic Adjustment Factor) Adjusted Capital rate Chicago $ $ Percentage Decrease % 45
46 Inpatient Hospital Changes Other Medicare Payment Provisions Outlier threshold reduced from $ 22,385 to $ 22,075. Redistribution of GME resident caps: final regulations provide for the calculation of the reduction of hospitals FTE caps to reflect a hospital s participation in an affiliated group. Patient days and available beds applicable to Hospice patients are excluded for purposes of computing Medicare Disproportionate Share and Indirect Medical Education reimbursement. Medicare Managed Care DRG s are now included in determining if a hospital qualifies for additional payments due to a high percentage of End Stage Renal Disease (ESRD) discharges. 72 Hour Rule: Now applies to services provided in physicians offices or other non-hospital sites that are wholly owned or operated by the Hospital. 46
47 Inpatient Hospital Changes Pension Costs For Wage Index Pension costs equal the sum of the average of the annual contributions to the Defined Benefit Pension plan during the last 3 years plus; A 10 year amortization of the excess of Pension Plan contributions over the amount of Pension costs reported for Wage Index purposes over the last 10 cost reporting periods. Annual contributions and reported Pension costs must be documented to include all 10 years. 47
48 Inpatient Hospital Changes Allowable Pension Costs For Cost Reporting Purposes Allowable costs are based on the cash contributions in the current year plus any carry-forward contributions subject to a limitation. Pension costs are limited to 150% of the average of the contributions of the three consecutive cost reporting periods out of the last 5 periods that yields the highest average contribution. Any excess contributions are excluded in the current year and carried forward to subsequent cost reporting periods. 48
49 Inpatient Hospital Changes Hospital Readmissions Reduction Program For discharges on/after 10/1/2012, payments will be reduced to account for excess readmissions. Applies to AMI, Heart Failure, and Pneumonia. Hospital-specific Readmission rates will be published. 49
50 Medicare Value-Based Purchasing Program Affect payment determinations for FY days prior to admission, 30 days after discharge Hospitals are measured on their spending per beneficiary against other hospitals (Achievement Score) as well as against its own performance in a baseline period (Improvement Score). Goal: Encourage hospitals to provide high quality care to Medicare beneficiaries at a lower cost and promote greater efficiencies. 50
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