Medicare Cost Report
Medicare Cost Report Preparation Required are required to submit information to achieve settlement of costs relating to health care services rendered.
The requirement to File Medicare Cost Report
Providers of service participating in the Medicare program are required to submit information to achieve settlement of costs relating to health care services rendered to Medicare beneficiaries [42 U.S.C. 1395g (section 1815(a) of the Social Security Act]. Regulations state that Medicare Cost Report “will be required from providers on an annual basis…” [42 Code of Federal Regulations (CFR) §413.20(b)]. When a provider fails to file a timely cost report, all interim payments since the beginning of the cost reporting period can be deemed overpayments. (See Part I, §2413 (select Chapter 24 and select pr2 2411 to 2415.doc then scroll down to §2413).)
Medicare Cost Report Due Dates
Cost Reports are required to be filed following the close of a provider’s reporting period. (See §102.) The due dates for the Medicare Cost Report are as follows:
- Medicare Cost Report is due on or before the last day of the fifth month following the close of the cost reporting period. For Medicare Cost Report ending on a day other than the last day of the month, Medicare Cost Report is due 150 days after the last day of the cost reporting period.
- No extensions will be granted except when the provider’s operations are significantly adversely affected due to extraordinary circumstances over which the provider has no control. An example would be a flood or fire that forces a provider to cease operations and to transfer its patients temporarily to other providers outside of the impacted area. The contractor would still be required to obtain the Centers for Medicare and Medicaid Services’ (CMS’) approval (see §413.24(f) (2) (ii) [scroll down to §413.24(f) (2) (ii)]).
- The provider must receive the Provider Statistical and Reimbursement Report (PS&R) on or before the 120th day. If the contractor is late mailing the PS&R, the provider will have 30 days from the date of receipt of the PS&R to file its cost report, even if it extends beyond the 5-month due date. No interest will be assessed against the provider for filing the cost report beyond the 5 month period if the cost report is late due to the late receipt of the PS&R.
- A cost report is considered to be timely filed if the cost report is postmarked by the due date. This requirement applies regardless of whether the provider furnishes a hard copy or a diskette version. If a cost report is due on a Saturday, Sunday, or Federal holiday, the cost report is considered timely filed if postmarked by the following working day.
Electronic Submission of Supporting Documentation
Accountants in Miami encourages all providers to submit Medicare Cost Report and supporting documentation electronically whenever possible. In addition to the environmental benefits of this approach, it is also more efficient from a time and cost perspective.
We now offer the choice of filing your cost report via the Medicare Cost Report e-Filing (MCReF) portal. The new MCReF portal is a streamlined feature that allows your facility to submit your cost report the same day electronically without the cost of sending any hard copy documents! The MCReF system is a secure site that allows for a safe and instant submission of protected health information (PHI). MCReF also notifies you instantly of any submission issues and also stores all your files, resulting in fewer rejection issues. Sign up today and save time and money!
Another benefit of the MCReF portal is that it is a safe and secure site that does not require encryption of protected health information (PHI). Please ensure that any PHI submitted through MCReF is not encrypted or password-protected to avoid resulting in a rejection of your submission.
The following documents should be included in your cost report submission either with your MCReF submission or in electronic format (e.g., CD-ROM, flash drive, etc.) when mailing your cost report manually:
- The electronic cost report (ECR) and print image (PI) files utilizing CMS-approved vendor with current specification date. The ECR must pass all level I edits
- Exception: If utilizing CMS free software, you must submit a completed hardcopy of the cost report in lieu of the PI file.
- If you are claiming costs for interns and residents (IRIS), the IRIS data files that pass all IRIS edits in the CMS IRIS software.
- Working trial balance and crosswalk.
- Signed audited financial statements.
- If you claim Medicare bad debts your submitted listings must match the amount claimed on the cost report. Fee-based bad debts should not be included in this listing.
- Wage index documentation (acute care hospitals only).
- Documentation for any reclassifications, adjustments, related organizations, contracted therapists and protested items.
Note: PHI uploaded via the MCReF portal cannot be encrypted or password protected and will result in a rejection of your submission. The MCReF portal is a safe secure cost report submission option and does not require encryption.
The certification page (worksheet S with encryption coding) of the ECR file with the original signature of an officer or administrator must be submitted in hard copy format (paper) unless opting for electronic signature.
Note: Effective for cost reporting periods ending on or after December 31, 2017, a provider that is required to file an electronic cost report may elect to electronically submit the settlement summary and certification statement with an electronic signature of the provider’s administrator or chief financial officer. The checkbox for electronic signature and submission immediately follows the certification statement must be checked if electronic signature and submission are elected.
Cost Reporting Period
For cost reporting purposes, Medicare requires submission of annual reports covering a 12-month period of operations based upon the provider’s accounting year.
The provider may select any annual period for Medicare cost reporting purposes regardless of the reporting period it uses for other programs. Once a provider has made a selection and reported accordingly, it is required thereafter to report annually for periods ending as of the same date unless the contractor/contractor approves a change in the provider’s reporting period.
A cost reporting period under the program consisting of one of the following will be considered in compliance with the reporting periods cited above:
- Twelve (12) successive calendar months,
- Thirteen (13) four-week periods with an additional day (two in a leap year) added to the last week or period to make it coincide with the end of the calendar year or month,
- A reporting period which will vary from 52 to 53 weeks because it must always end on the same day of the week (Monday, Tuesday, etc.) and always end on whatever date this same day of the week:
- last occurs in a calendar month, or
- which is nearest to the last day of the calendar month, even though this same day falls in the first week of the following month. A new provider beginning operations on January 1, 2006, and entering the program as of that date, could choose a reporting period beginning with that date and ending
- Example: Wednesday, December 27, 2006. This provider’s accounting period would end on the same day of the week (Wednesday) and on whatever date that day of the week last occurs in the final month of the year. Alternatively, the provider could elect to end its first reporting period on January 1, 2007; this would be based on the election to end the period on the same day of the week which is nearest to the last day of the calendar year, even though the last day falls in the first week of the following month. The method selected must be consistently followed.
A provider may prepare a short period cost report for part of a year under the circumstances described in §102.1 through 102.3 (select Chapter 1 and then scroll to §102.1).
Where a provider did not furnish any covered services to Medicare beneficiaries or where it had low utilization of such services in a reporting period, a full cost report need not be filed. See §110 (select Chapter 1 and then scroll to §110) for an explanation of this procedure.
Providers in a chain organization, or another group of providers, are required to file individual Medicare Cost Report as explained in §112 (select Chapter 1 and open pr2_100_to_140.doc then scroll to §112).
Conditions Under Which Less than Full Cost Report May Be Filed
No Medicare Utilization – A provider that has not furnished any covered services to Medicare beneficiaries during the entire cost reporting period need not file a full cost report to comply with program cost reporting requirements
- The provider must submit to its contractor/contractor a statement, signed by an authorized provider official, which identifies the reporting period to which the statement applies and states that no:
- Covered services were furnished during the reporting period
- Claims for Medicare reimbursement will be filed for this reporting period
- This statement must be accompanied by a completed certification page of the applicable cost report forms. The proper form and signed statement must be submitted within 150 days following the close of the reporting period.
Low Medicare Utilization – The contractor/contractor may authorize less than a full cost report where a provider has had low utilization of covered services by Medicare beneficiaries in a reporting period and received correspondingly low interim reimbursement payments which, in the aggregate, appear to justify making a final settlement for that period based on less than a normally required full cost report. Based on the contractor/contractor’s knowledge of the provider’s Medicare utilization and interim payments as set forth in the Provider Statistical and Reimbursement Report and the contractor/contractor’s conclusion that it can determine the reasonable cost of covered services furnished beneficiaries, the contractor will advise the provider that less than a full cost report may be filed.
Effective for all Medicare Cost Report received on or after June 19, 2020, the MACs are instructed to use the following defined “Low Medicare Utilization Thresholds” compared to total reimbursement amounts to determine whether a provider qualifies to file a low utilization cost report in accordance with PRM 15-2, Section 110:
- Federally Qualified Health Clinics (FQHCs): $50,000
- Rural Health Clinics (RHCs): $50,000
- All Other Providers: $200,000. This includes hospital and non-hospital provider types.
- Community Health Mental Health Clinics (CMHCs): CMHCs do not qualify for low utilization as they do not have a threshold/limitation for outlier reconciliations..
- Note 1: Total Reimbursement is the sum of the current interim payments on the PS&R, total bi-weekly payments (including Periodic Interim Payments), and total lump sum adjustments. Note 2: The above thresholds will be applied to the cost report being submitted for the entire provider complex (family). This means if a hospital cost report is being submitted with a provider-based FQHC, the Low Medicare Utilization threshold used will be the $200,000 hospital threshold amount; it will not be $250,000 (which would be the hospital $200,000 threshold plus the FQHC $50,000 threshold))
Under this situation, the contractor will require that the provider furnish all of the following information using program forms:
- Page one of the applicable cost report form,
- The officer certification sheet,
- The balance sheet,
- The statement of income and expense, and
- Other financial and statistical data the contractor may deem appropriate depending upon the circumstances in the individual case
However, regardless of low Medicare utilization or the amount of aggregate interim reimbursement, the contractor may require full cost reporting and auditing if that is necessary to serve the best interest of the program. Providers must submit the forms and data under this alternate procedure within the same time period required for the full Medicare Cost Report. Low Medicare utilization providers may submit to the contractor on a CMS-approved vendor’s system the required worksheets in hard copy, ECR submission is not required and the edits are not enforceable. For example, on the hospital cost report, the worksheets must contain the term “In Lieu Of 2552-96” on each worksheet submitted. In addition on Worksheet S, the check-off box for manually submitted must be properly checked. Other provider types may also submit low utilization Medicare Cost Report.
Low Medicare Utilization-Complex Provider – The contractor may authorize less than a full cost report when a complex provider, including all of the provider based components, e.g., SNF, HHA, had low utilization of covered services by Medicare beneficiaries in a reporting period and received correspondingly low payments which, in the aggregate, appear to justify making a final settlement for that period based on less than a normally required full cost report. If the main provider or any of the provider based components do not qualify for low utilization treatment, a full cost report is required. (See paragraph B above for the required filing under the low utilization procedure.)
Implementation – The procedures described in this section are effective only where, prior to the end of the reporting period or filing period for the cost report, the contractor advises the provider that it may file less than a full cost report and the provider gives assurance that it will timely file such data. These procedures are not applicable to cost reporting periods where both the reporting period and the related filing period have expired, even though a cost report has not yet been filed for such period. If the provider is required to file a full cost report for other Federal programs, e.g., titles XIX and/or V, the provider may be required by the contractor/contractor to also file a full cost report with the Medicare program.
Filing of Medicare Cost Report by Providers of a Chain Organization or Other Group of Providers
Each provider in a chain organization or other group of providers, except as noted below, must file a separate, individual cost report. (See 42 CFR 413.20(b) scroll to 413.20(b)) Such organizations are not permitted to file a combined or consolidated cost report under the Medicare program.
The only exception under this rule applies to State health department home health agencies with subunits or branches and related Rural Health Clinics (RHCs) that are permitted to file a combined cost report under the 7800 series of provider numbers. “Other group of providers” refers to an informal assembly of providers (hospitals, Skilled Nursing Facilities (SNFs), and Home Health Agencies (HHAs)) not owned or controlled by a central group or related interest, but who join together to obtain the benefits of centralized cooperative buying, exchange of medical information, etc.
Multiple-facility complex providers (hospital, hospital-based SNFs, hospital-based HHAs, Comprehensive Outpatient Rehabilitation Facilities (CORFs), etc.) use the cost report designated for this type of facility which provides adequate cost data. Institutions that have multiple facilities but only one provider number, or one provider number with sub provider numbers for its related cost entities, are required to submit one cost report under that principle provider number together with the sub provider numbers if any.
Hospitals which have sub providers and hospital-based SNFs must also maintain uniform charges across all payer categories, as well as like charges for like services across each provider setting, in order to properly apportion costs. If like charges for like services are not maintained across provider settings, the cost report must not combine charges when calculating cost-to-charge ratios but must report separately, by department, costs, and charges for the hospital, sub provider, and skilled nursing facility. An exception to this requirement is if the provider has the ability to gross-up charges as described in the Provider Reimbursement Manual, Part I, §2314.B (Select Chapter 23 and scroll to §2314.B).
The filing of a combined or a consolidated cost report for a chain organization or other group of providers is not acceptable practice under the Medicare program. If the contractor unknowingly accepts a consolidated report from a chain, the contractor may reopen the report within the 3-year period following the date of the notice of program reimbursement issued by the contractor.
Cost Reporting General Timeline
- Cost report reminder letters are sent by Accountants in Miami Solutions to providers at least 30 days prior to the cost report due date.
- Medicare Cost Report is due from providers at the end of the 5th month after the provider’s Fiscal Year End (FYE). If the provider’s FYE is other than a month-end, the cost report will be due 150 days from their FYE.
- Submitted Medicare Cost Report will be reviewed by Accountants in Miami Solutions within 30 days of cost report receipt date to determine if the submitted cost report should be accepted or rejected.
- Tentative settlements will be determined by Accountants in Miami Solutions within 60 days of cost report acceptance.
- Medicare Cost Report not selected for audit will be settled by Accountants in Miami Solutions within one year of cost report acceptance.
- Medicare Cost Report selected for audit:
- Providers will receive an audit notification letter from Accountants in Miami at least four weeks before the start of the audit.
- An entrance conference will be conducted on the first day of the audit to review the specifics of the engagement and obtain requested documentation.
- An exit conference will be conducted at the end of the audit to review audit adjustments, management letter issues, open document requests.
- Providers will have 4 weeks after the exit to submit any additional documentation pertaining to the audit.
- Medicare Cost Report selected for audit will be settled 60 days after the exit conference.
- Requests to reopen Medicare Cost Report must be received within three years of the settlement date.
- Appeals need to be filed within 180 days of the cost report settlement date.
Medicare Cost Report
Florida Form F-1120 State Corporate Income Tax Return. All corporations (including 990) doing business, earning income, or existing in Florida must file
U.S. Income Tax Return for an S Corporation Form 1120-S. Do not file Form 1120-S unless the corporation has filed Form 2553, Election for Sub S status