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Medicare/Medicaid Cost Report Preparation and/or Review


The Hall Consulting Services (HCS) staff has been continuously involved in auditing and preparing Medicare/Medicaid cost reports for more than 25 years.  As a result, HCS staff members are recognized experts in all facets of Medicare/ Medicaid cost reports: from obtaining and developing all of the required documents, verification of critical data elements and related databases, and ensuring all documents are in accordance with current Centers for Medicare and Medicaid Services (CMS) instructions for the protection of provider appeal rights.


HCS has directly filed a number of Medicare cost reports on behalf of its client base. Our clients' annual budgets range from $28 million to budgets in excess of $1 billion with patient bed size ranging from 125 to 1,500 patient beds.  Additionally, HCS has audited, reviewed and analyzed a large number of complex issues which have materially affected the Medicare/Medicaid cost report reimbursement for our clients.


Over the years, HCS has developed a detailed and systematic approach to Medicare and Medicaid cost reporting which can be customized to any particular hospital size or complexity.


Due to the extremely complicated systematic information requirements for both the Medicare and Medicaid cost reports, it is in the best interest of providers to use all available outsourced professional services.  The value and reimbursement obtained by such services far outweigh  their costs. 


Under the present environment conditions in which many healthcare programs cutbacks have cause providers to downsize and eliminate both hospital and reimbursement departmental personnel, outsourcing may be a viable option.


Cost Report Submission Requirements


Medicare providers who are required to file a cost report are also required to submit a cost report within five months of the applicable fiscal year period or 30 days after a valid Provider Statistical & Reimbursement Report (PS&R) is sent to the provider by the intermediary, whichever is later. 


The Medicare cost report contains provider information such as facility characteristics, utilization data, cost and charges by cost center (general ledger and Medicare/Medicaid grouping), Medicare settlement data and usually audited financial statement data.






Revised Initial Appeal Filing Procedures


As a result of the CMS published Final Rule on appeal procedures (dated April 23, 2008) and the Provider Reimbursement Review Broad (PRRB) revised rules (effective on August 21, 2008), a significant number of changes to the PRRB appeal process will be implemented which will restrict a number of filing options and documentation requirements for providers wishing to file a PRRB appeal.


Due to the new PRRB rules, providers should make every effort to file all disputed issues in their initial appeal request for a hearing.  Additionally, providers should systematically identify, document and finalize all disputed issues as early as possible before and after the fiscal intermediary scheduled audit of a subject cost report.


  • Initially filed cost reports must include all self-disallowed cost items in order to protect their appeal rights.  CMS’s Final Rule prohibits a provider from appealing self-disallowed cost unless it has listed the item on its cost report as a protested item.  The procedures for filing a cost report under protest are in the Provider Reimbursement Manual, Part II at Section 115.


HCS Offers the Following Services:


  1. Cost Report Reimbursement Review


  1. Management Summary Report

  2. Letter of Engagement

  3. Scope of Audit

  4. Audit Findings

  5. List of Recommendations and Rating Criteria:

  • Priority A - high risk, material reimbursement errors or omissions requiring immediate action

  • Priority B - medium risk, moderate to large reimbursement errors or omissions requiring reasonably urgent action

  • Priority C - low risk, low to moderate reimbursement errors or omissions which require action to improve efficiency, internal control or regulatory compliance

    1. Action Plan:

  • Specific Recommendation

  • Comments

  • Approved by Management

  • Agreed Completion Date

    1. Examples of Items Subject to a “Management Summary Report” Review:

  • Medicare Cost Reports

  • Medicaid Cost Reports

  • Medicare System Databases

  • Medicare internal control of major reimbursement items (e.g. DSH, GME/IME, Organ Transplants, Medicare Bad Debts).   


    1. Preparation of the Medicare or Medicaid Cost Reports


    1. HCS is available to fully complete the Medicare/Medicare Cost report or assist the provider's personnel to complete the Medicare/Medicaid Cost Report.

    2. HCS offers a wide range of Medicare or Medicaid Cost Report Detail Documentation Support which can be implemented and separately organized by individual projects, as outlined below:                              

  • Document individual reimbursement items (full supporting information)

  • Develop or obtain information needed for hospital databases

  • Research complex Medicare or Medicaid Issues

  • Performed applicable time studies, square footage measures, as well as other applicable cost report statistics


    1. Hospital Database Analysis


    In order to fully account for all of the required Medicare/Medicaid Cost Report information components, provider/patient information will have to be analyzed and  comparatively matched with all applicable provider department information sources. (Integrating components such as audited general ledger expense & revenue, Medicare data elements, Medicaid data elements and hospital statistics will also be included).


    As our client, HCS can develop computer-based programs for you that are used to integrate the numerous sources of provider information and fiscal intermediary patient databases.




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