On December 29, 2022, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 18, which includes many significant changes related to Medicare cost reporting for Hospital and Hospital Health Care Complex (CMS 2552-10) worksheets. Hospitals should be prepared for several critical takeaways related to the changes well before the next cost report deadline. These changes are effective for cost report periods beginning on or after October 1, 2022. While some of the changes will require up-front work on the provider side, many are included to streamline the cost report audit process, which can allow the Medicare Administrative Contractors (MACs) and their auditors to conduct preliminary checks to validate data. We anticipate that after the initial year, the changes will help facilitate more streamlined approaches for each MAC in finalizing cost report audits.
Below are some of the more significant changes included in Transmittal 18.
DSH Medicaid Eligible Days
For cost report periods beginning on or after October 1, 2022, Disproportionate Share Hospital (DSH)-eligible hospitals will be required to submit a patient listing with additional patient detail as described in Exhibit 3A of Transmittal 18 (see below). Like the 2018 requirement to include a DSH eligible days listing, this update standardizes the format of the information to be included in this listing. The DSH eligible days listing totals should be used to complete CMS 2552’s S-2, Part I, Lines 24 and 25, and are required to be included at the time of cost report filing.
Source: Transmittal 18
Hospital Charity Care Reporting Changes on Worksheet S-10
With Transmittal 18, CMS has made significant updates on how charity care is reported on the cost report’s S-10 worksheet, which has been split into two parts:
- S-10, Part I should include charity care and uninsured discounts for the entire hospital complex, which is currently (for cost report periods beginning before October 1, 2022) the format for S-10.
- (NEW!) S-10, Part II should identify information reported in S-10, Part I, for uncompensated care (UCC) for the general short-term hospital inpatient and outpatient services billable under the hospital’s CMS Certification Number (CCN). This is new to the S-10 worksheet and is focused on the inpatient and outpatient services billable under the hospital CCN only. Part II would exclude all other non-hospital provider services such as attached Skilled Nursing Facilities, Psychiatric Units, End Stage Renal Disease (ERSD), Home Health Agencies, etc., where there is a separate provider number. The information provided in this section should be a subset of the data provided in Part I.
In addition to providers reporting additional UCC data on S-10, Part II, providers will be required to provide another level of data in their support listings for Total Hospital Complex Bad Debts and Total Charity Care that is reported on S-10, Part I.
Hospital Complex Charity Care Charges and Uninsured Discounts Listing (S-10 Support)
Inpatient Prospective Payment System (IPPS) providers eligible for DSH will need to submit a patient level listing of all charity care charges and uninsured discounts amounts (as determined by the hospital’s financial assistance policy) in a standardized format. Beginning with cost report periods on or after October 1, 2022, all hospitals will need to include a proper patient listing in the designated format as described in Transmittal 18’s Exhibit 3B (see below). The standardized listing is used to support the charity care charges and uninsured discounts listed on Line 20 of S-10. Exhibit 3B mirrors many of the templates used in the recent MAC S-10 audits.
Source: Transmittal 18
Total Bad Debts Listing (S-10 Support)
All IPPS hospitals eligible for DSH and UCC will need to submit a patient level listing of total hospital complex Medicare and non-Medicare bad debts to support the exact amount included on Line 26 on Worksheet S-10, Part I. A separate exhibit (Exhibit 3C) for the hospital and each component (each CCN) should be completed. CMS has provided a standardized template for providers to complete this exhibit, as shown below.
Source: Transmittal 18
Medicare Bad Debts Listing to Support Amount Claimed on Cost Report
CMS has revised the Medicare bad debts listing format to include additional columns of information. The new Exhibit 2A, shown below, replaces the old Medicare bad debts format by more than doubling the number of required columns to complete.
What can providers start doing now to prepare?
It is critical that providers begin determining how they will pull the new data fields for each of the new exhibits. The old process for collecting data may need to be adjusted or expanded in order to encompass the additional details required in the exhibits. Providers may need to build new processes internally to identify how to collect data to fully complete each exhibit. Due to the increased complexity of these additional filings, providers will find it challenging to fix issues at the last minute when the cost report is due.
PYA Can Help
PYA can assist if your organization wants to learn more about how these changes will affect your next cost report. In addition to assistance with questions about the new requirements, PYA has significant experience in the full cost reporting process either with full preparation or reviewing your cost report before filing. Our professionals are also seasoned in other reimbursement matters affecting your organization. For assistance, you may contact our executives at the e-mails below or by calling (800)-270-9629.
