A Basic Guide to Medicare Cost Reports
If your agency accepts Medicare, you’ve probably heard the term Medicare Cost Report. It may even fill you with dread. This annual report must be filed by most Medicare providers each year – but that doesn’t mean it’s easy. It requires piles of paperwork and complex number crunching that can overwhelm even large and well-established healthcare providers.
Luckily, Knight Home Care Financial is here to help you take the challenge out of cost reporting. In this basic guide to Medicare Cost Reports, we’ll break down what it is, why it’s important, and how to submit it without the stress. (hint: it’s letting us do it for you!)
What is a Medicare Cost Report?
The Medicare Cost Report (MCR) is an annual report that must be filed by certain types of healthcare providers that accept Medicare and are eligible for reimbursement. Each year, applicable providers are required to complete and submit a series of schedules and worksheets that provide specific information, such as:
- Facility Characteristics (ownership status, facility size, total beds, etc.)
- Financial Information (revenue, expenses, net income, bad debt, etc.)
- Provider statistical information (visits, days of service, patient counts, etc.)
- Indirect and Direct Provider Costs
- Medicare Settlement Data
Cost reports also require detailed information about annual costs and charges, which can vary based on facility type. For example, a Home Health Agency may report cost per visit while a Skilled Nursing Facility would report cost per resident per day.
The MCR is required and regulated by the Centers for Medicaid and Medicare Services (CMS), which uses the data to set prospective payment rates such as wage index, Disproportionate Share Hospital (DSH) adjustment, GME/IME, and others. Cost reports are also used to determine if Medicare providers have been reimbursed correctly and calculate any payments the facility owes or is due.
Who must file a Medicare Cost Report?
All Medicare-certified institutional providers are required to submit the MCR each year to a Medicare Administrative Contractor (MAC). This includes:
- Hospitals
- Skilled Nursing Facilities
- Home Health Agencies (HHAs)
- Hospices
- Rural Health Clinics (RHCs)
- Federally Qualified Health Centers (FQHCs)
- Renal Facilities
- Community Mental Health Centers (CMHCs)
Physicians, non-institutional providers, federal hospitals, emergency hospitals outside of the U.S., and some children’s hospitals are not required to file a MCR.
When is the Medicare Cost Report due?
Cost reports are due five months after an agency’s fiscal year ends. It is important to file your MCR on-time as late (or rejected) reports can result in payment suspension and/or assessed interest on any amounts due to the program.
How to file Medicare Cost Reports
Many healthcare facilities choose to file cost reports online through MCReF, the Medicare Cost Report e-Filing system. This allows Medicare Part A Providers to electronically file 100% of their MCR package, including supporting documentation, directly to their MAC.
You may also submit cost reports as an Electronic Cost Report (ECR) that includes electronic formats of the required forms and supporting documents, a signature page, and a “PI”, or a picture image of the entire report. The ECR must be created in CMS-approved reporting software and sent to your MAC as an electronic file, a CD, or a flash drive.
Medicare Cost Report Forms
Cost report forms change frequently – sometimes year to year. Current MCR forms can be downloaded from the CMS website, but they are only intended for informational purposes and cannot be used to submit the report.
Want Medicare Cost Report Help?
If you still can’t make sense of your Medicare Cost Report, Knight Home Care Financial can help. Our experienced team offers comprehensive cost reporting services to help post-acute and long-term care providers accurately report costs and stay compliant. Contact us today to learn more!
About Knight Home Care Financial
Knight Home Care Financial is a Texas-based accounting firm that provides innovative accounting solutions for providers in assisted living, home health, hospice care, and nursing facilities. By focusing solely on post-acute and long-term health providers, the firm is able to offer tailored services that meet and simplify the business and regulatory demands of the industry. For more information, visit www.knighthcfinancial.com.