Contents. About the Author... iv. Acknowledgements... v. Introduction: That s all there is to it... vi
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2 Contents About the Author iv Acknowledgements v Introduction: That s all there is to it vi Chapter 1: What you will need before you get started Chapter 2: What is the cost report? Chapter 3: Outlining the cost report Chapter 4: Breaking it down Identity of the provider Chapter 5: Breaking it down Cost allocation and expenses Chapter 6: The Medicare Cost Report at a glance Chapter 7: The Provider Statistical and Reimbursement Report Chapter 8: Completing the Medicare Cost Report in reality Chapter 9: Facility financials Chapter 10: The process Chapter 11: After the report is completed
3 Chapter 1 What you will need before you get started
4 Chapter 1 What you will need before you get started Gather all of the appropriate resources to help you accurately prepare the report. You can find most of these resources within the facility s administration. The administrator, office manager, owner, and office responsible for the accounting function are all good sources of information. In addition to helping you prepare the report accurately, such documents will also help you complete it in a timely fashion that is, within five months after the fiscal year end date. For example, if your facility s fiscal year end is December 31, your cost report is due May 31. Trial balance The first item you need is a working trial balance that is, a combination of the balance sheet and income statement. This type of financial statement includes the assets, liabilities, equity, income, and expenses for the cost reporting year. Request this item as early as possible it tends to be one of the last documents to surface in the process of cost report preparation. A facility is required to file its corporate taxes by March 15 if its fiscal year end is December 31. Unfortunately, a facility often will delay this process by filing an extension on its taxes, which typically means that its financials will not be ready by mid-march. This delay can make your job a little stressful when you are trying to meet your May 31 cost report deadline. Medicare Provider Statistical and Reimbursement Report The second item to locate is the Medicare Provider Statistical and Reimbursement Report (PS&R). Issued by the facility s fiscal intermediary (FI) within approximately 75 days after the fiscal year end, this report includes information related to what the facility charged to Medicare Part A and Part B; what was paid by Medicare for Part A and Part B; and how payments were made per Resource Utilization Group category throughout the cost report year.
5 Chapter 1 Mark the approximate mailing date for this document on your calendar so facility office staff can watch for it. Statistics from the facility Third, begin requesting statistics from your facility. Many can be ascertained very quickly after the fiscal year end. Tabulate those regarding inpatient days, admissions, and discharges for each payer source (such as Medicare, Medicaid, and others) within the facility. Additional statistics may include information related to square foot allocation. These measurements can be very specific, such as the square footage of the administration rooms, medication rooms, therapy rooms, resident areas, etc. These statistics allow for the allocation of indirect costs per square foot. Your cost report software will automatically allocate these costs per payer. Snapshot of resources Fourth, many facilities perform time studies at intermittent times throughout the year. These studies take a snap-shot of the resources used to care for various types of residents. You can use these statistics as well when preparing the cost report. Because there is no financial impact on the cost report for skilled units, except for bad debt reimbursement, these time studies will not necessarily benefit the facility s results on the report. But they may be valuable from a management standpoint when reviewing the cost report. If you are completing a cost-reimbursed report, notify the FI of your allocation process. Good software package Finally, select a good software package to prepare your cost report. Although there is free software available from the Centers for Medicare & Medicaid Services (CMS), it is extremely antiquated and cumbersome to work with. Some of the larger accounting firms have developed their own software, and some vendors specialize in Medicare Cost Report software. This should give you some options when you choose a software package. Your facility must submit its report electronically, on disk, and in a format mandated by CMS. Therefore, it is wise to look for a very user-friendly software package that will automate many of the functions for you.
6 What you will need before you get started Although I will not personally endorse any particular software vendor within this text, I can tell you that the software preferred by our organization is extremely user-friendly and is loaded with all kinds of extras that eliminate the need for redundant data entry. Much of it is automated for me once I enter certain data. The availability of such software supports the earlier introduction, in which I try to dispel the thoughts that the cost report is so difficult to complete. Good software can allow lower-level staff to enter data, and a certified public accountant can review it later.
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