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Medicare Cost Reports: Changes to Required Supporting Documentation for Submission

Friday, February 8, 2019

The Federal Fiscal Year 2019 Inpatient Prospective Payment System (IPPS) final rule contained a provision which finalizes changes to the supporting documentation required for submission of an acceptable Medicare cost report.  The regulations at CFR §413.24(f)(5)(i) have been revised for all providers submitting a Medicare cost report to indicate that failure to submit the required supporting documentation upon submission of the cost report will result in the filing being rejected.  The following changes were finalized in the IPPS rule:


  • Effective with filings on or after October 1, 2018, for teaching hospitals, the Intern and Resident Information System (IRIS) data must be submitted. The requirement to submit this via diskette was removed as this is no longer the method utilized for this information.  In addition, it is anticipated that further requirements for the IRIS data and matching to cost report amounts will be forthcoming in future rules.
  • For providers claiming Medicare bad debts, a cost report for periods beginning on or after October 1, 2018 will be rejected if submitted without the required bad debt listing that agrees to the amounts claimed on the cost report. In the past some intermediaries would adjust the tentative settlement if bad debts were claimed and no listing was provided at submission, now these cost reports will be rejected.
  • Two provisions were added for DSH-eligible hospitals.
    • Effective for cost report periods beginning on or after October 1, 2018, a cost report will be rejected if a detailed listing of the Medicaid eligible days, which agrees to the hospital’s cost report, is not submitted with the cost report filing. The Medicare contractors are required to accept an amended cost report to modify this information, with supporting documentation, if amended within 12 months of the original cost report due date.   Note that Sole Community Hospitals (SCH) that receive the Hospital Specific Payment are not considered DSH-eligible and therefore are not required to submit the detail listing.  If the SCH receives the Federal Specific Payment however, the hospital must submit the required documentation.
    • Effective for cost report periods beginning on or after October 1, 2018, a cost report for DSH-eligible hospitals will be rejected if supporting documentation for Worksheet S-10 is not submitted with the cost report filing. The detail listing must agree to the reported amount of charity care and/or uninsured discounts in the cost report.
  • Effective for cost reporting periods beginning on or after October 1, 2018, providers claiming home office or chain organization costs will have the cost report rejected if a Home Office Cost Statement is not prepared and submitted to the Medicare contractor(s) of the applicable chain providers by the Home Office organization.

The finalized rules were done to make it more efficient for the Medicare contractors to finalize the cost reports.  The above items were previously provided by the hospitals upon request of the Medicare contractors, however the new rules require the information be submitted with the submission of the cost report. Save yourself a rejection by becoming familiar and planning for the new requirements 

For more information, please contact:

Melissa Phelps, Principal

315.446.3600 / mphelps@fcc-cpa.com