Medicare Cost Reporting Update Form CMS-2552-10, Transmittal #3 Healthcare Financial Management...

Medicare Cost Reporting UpdateForm CMS-2552-10, Transmittal #3

Healthcare Financial Management Association

Southern California ChapterFebruary 21, 2013

Don Fry, Director, KPMG LLP, Los Angeles, CaliforniaJohn Flood, Manager, KPMG LLP, Los Angeles, California

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 30039BOS

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CMS-2552-10

Timeline (last updated December 12, 2012)

Form CMS-2552-10, Transmittal #1, issued by CMS December 30, 2010.

Transmittal #2 was issued by CMS on Friday, August 26, 2011.

Vendor systems all approved under Transmittal #2 during the first week of November 2011 and systems were subsequently released.

FYE 4/30/2011 and 5/31/2011 cost reports filed by November 30, 2011.

FYE 6/30/2011 cost reports filed by January 31, 2012.

FYE 9/30/2011 cost reports filed by March 31, 2012.

FYE 12/31/2011 cost reports filed by May 31, 2012 – no extension.

Changes and corrections to the CMS instructions, ECR specs and forms, along with changes and corrections to vendor systems have been made as each “wave” of cost report filings came in. These changes were required as “real-world” cost reports brought previously unknown issues to light – this had been anticipated. These changes were formalized in Transmittal #3, which was provided to the system vendors in DRAFT form on July 3, 2012 and in FINAL form on October 19, 2012.

CMS approved all system vendors for Transmittal #3 on November 27, 2012.


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CMS-2552-10

Review of the major changes in Form CMS-2552-10 Transmittal #3

NOTES:

Dollar amounts, statistics and other responses shown herein should be considered examples for data placement only. They are not necessarily a

complete representation of the overall flow of the Form CMS-2552-10 cost report.


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Worksheet S-2 Part I Line 22

Line 22--Does your facility qualify and is it currently receiving payments for disproportionate share hospital adjustment, in accordance with 42 CFR 412.106 or the low income payment in accordance with 42 CFR 412.624(e)(2)? Enter on column 1 “Y” for yes or “N” for no. Is this facility subject to the provisions of 42 CFR 412.106(c)(2) (Pickle Amendment hospitals)? Enter in column 2 “Y” for yes or “N” for no.

Reference to LIP payment was removed from this question.

The response to Line 22 Column 2 replaces the use of “P” on Line 45, Column 2 to identify the hospital as a “Pickle amendment hospital.”


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Worksheet S-2 Part I Lines 24 and 25

Line 24--If the response to line 22 column 1 and/or 45 column 2 is “yes”, and this is an IPPS provider, enter the in-State Medicaid paid days in column 1, the in State Medicaid eligible but unpaid days in column 2, the out of State Medicaid paid days in column 3, the out of State Medicaid eligible but unpaid days in column 4, Medicaid HMO paid and eligible but unpaid days in column 5, and other Medicaid days in column 6. For all columns include in these days the labor and delivery days. Do not include swing-bed, observation or hospice days in any columns on this line. Line 25--If the response to line 22 is “yes”, and this provider is an IRF, enter the in-State Medicaid paid days in column 1, the in State Medicaid eligible days in column 2, the out of State Medicaid paid days in column 3, the out of State Medicaid eligible days in column 4, Medicaid HMO paid and eligible but unpaid days in column 5, and other Medicaid days in column 6. For all columns include in these days the labor and delivery days.

The applicability of Line 24 no longer depends upon the response to Line 22 Column 1 or Line 45 Column 2. Instead, the hospital must be identified as an IPPS hospital.

The applicability of Line 25 no longer depends upon the response to Line 22. Either the hospital must be a freestanding IRF or an IRF subprovider must be present.

Instructions further clarified to indicate which days should and should not be included.


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Line 27--For the Standard Geographic classification (not wage), what is your status at the end of the cost reporting period. Enter “1” for urban or “2” for rural. If applicable, enter the effective date of the geographic reclassification in column 2.

Column 2 added to Line 27 to enter the effective date of the geographic reclassification.


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Line 45--Does your facility qualify and receive capital payments for disproportionate share in accordance with 42 CFR 412.320? Enter "Y" for yes and "N" for no. If you are eligible as a result of the Pickle amendment, enter "P" instead of "Y."

A “Y” response on Line 22, Column 2 replaces the use of “P” on Line 45, Column 2 to identify a “Pickle amendment hospital.”


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Worksheet S-2 Part I Lines 118.01, 118.02, 119

Line 118.01--Enter the total amount of malpractice premiums paid in column 1, enter the total amount of paid losses in column 2, and enter the total amount of self insurance paid in column 3. Line 118.02--Indicate if malpractice premiums and paid losses are reported in other than the Administrative and General cost center. If yes, provide a supporting schedule and list the amounts applicable to each cost center. Malpractice insurance premiums are money paid by the provider to a commercial insurer to protect the provider against potential negligence claims made by their patients/clients. Malpractice paid losses is money paid by the healthcare provider to compensate a patient/client for professional negligence. Malpractice self-insurance is money paid by the provider where the healthcare provider acts as its own insurance company (either as a sole or part-owner) to financially protect itself against professional negligence - often providers will manage their own funds or purchase a policy referred to as captive insurance, which protects providers for excess protection that may be unavailable or cost-prohibitive at the primary level. Line 119--This question is eliminated and this line must not used.

Line 119, which had asked for malpractice liability limits per lawsuit and per year has been removed. Lines 118.01 and 118.02 are the same questions that had been asked on 2552-96 Worksheet S-2 Lines 54 and 54.01.


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Line 120--If this is an SCH (or EACH), regardless of bed size, or is rural hospital with 100 or fewer beds that qualifies for the outpatient hold harmless provision in accordance with ACA, section 3121, as amended by the Medicare and Medicaid Extenders Act (MMEA) of 2010, section 108; the Temporary Payroll Tax Cut Continuation Act of 2011, section 308; and the Middle Class Tax Relief and Job Creation Act of 2012, section 3002, enter “Y” for yes or “N” for no in column 1 or column 2, respectively. Note that for SCHs (and EACHs) the outpatient hold harmless provision is effective for services rendered from January 1, 2010 through February 29, 2012 regardless of bed size and from March 1, 2012 through December 31, 2012 to all SCHs (and EACHs) with 100 or fewer beds. These responses impact the TOPs calculation on Worksheet E, Part B, line 8.

All SCH and EACH providers will receive TOPs payments through 2/29/2012. SCHs and EACHs that have 100 or fewer beds will receive TOPs payments through 12/31/2012. The only hospitals that are expected to receive TOPs payments on and after 1/1/2013 are Cancer and Children’s hospitals.


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Worksheet S-2 Part I Lines 155-161

Lines 155 - 161--If you are a provider (public or non public) that qualifies for an exemption from the application of the lower of cost or charges as provided in 42 CFR 413.13, indicate the component and/or services for titles V, XVIII and XIX that qualify for the exemption by entering in the corresponding box a “Y” for yes, if you qualify for the exemption or an “N” for no if you do not qualify for the exemption. Subscript as needed for additional components. For title XVIII providers a response of “Y” does not subject the provider to LCC.

Adding the Title V and Title XIX columns to Lines 155-161 enables the proper completion of Worksheet E-3 Part VII for hospitals that are not subject to LCC under their particular state’s Medicaid program.


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Worksheet S-2 Part II Lines 41-43

Cost Report Preparer Contact Information: Line 41--Enter the first name, last name and the title/position held by the cost report preparer in columns 1, 2, and 3, respectively. Line 42--Enter the employer/company name of the cost report preparer. Line 43--Enter the telephone number and email address of the cost report preparer.

Having this information available will be useful in situations such as having differing settlement amounts between the provider’s and the MAC’s cost reporting software tools. Omitting data in Lines 41-43 will result in a Level 1 ECR edit.


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Worksheet S-3 Part IV Line 4

Line 4--This instruction provides guidance for developing pension cost and other deferred compensation for the wage index. Enter the pension costs and other deferred compensation from your records or from the Wage Index Pension Cost Schedule (Exhibit 3) below. Commencing with cost reporting periods used for the fiscal Year (FY) 2013 wage index, the cost to be included in the wage index for defined benefit pension plans shall be determined in accordance with the policy adopted in the FY 2012 IPPS final rule (CMS-1518-F; 76 FR 51586 - 51590, August 18, 2011) and as discussed below. As such, enter all qualified and non-qualified pension plan cost and executive deferred compensation on this line in lieu of using lines 3 and 21, respectively, of this worksheet.

S-3 Part IV Line 4 replaces Lines 3 and 21, retroactive to FYB 5/1/2010.

The computation of S-3 Part IV must be supported by the completion of EXHIBIT 3 (see separate handout)


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Worksheet S-3 Part IV, Line 4

(Discussion of new Exhibit 3, using Form CMS-2552-10 Transmittal #3 instructions – see separate handout)


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Worksheet S-3 Part V

Contract Labor and Benefit Costs defined: Contract Labor Costs--Enter the amount paid for services furnished under contract, rather than by employees, for direct patient care, and top level management services as defined in the instructions for Worksheet S-3, Part II, line 11. The amount of Contract Labor report on S-3, Part II, line 11 should agree with the amount reported on S-3, Part V, line 2. This is only for the hospital (not including excluded areas.) The remainder of S-3, Part V should reflect Contract Labor as defined on S-3, Part II, line 11 (direct patient care and top level management for all of the excluded areas) with the aggregate total reported on line 1. Benefit Costs--Enter in the amount of employee benefit costs, also referred to as wage-related costs. Worksheet S-3, Part IV provides a list of core wage-related costs. The core wage-related costs reported on S-3, Part IV, line 24, which is spread on S-3, Part II, lines 17 and 19-25 must be reported by component on S-3, Part V. The amount reported on S-3, Part II, line 1 should agree to the allowable amount reported on S-3, Part IV, line 24. S-3, Part V, line 2 should agree to the amount reported on S-3, Part II, line 17. Each excluded area should contain their share of wage related costs so that lines 19 through 25 on S-3, Part II will agree to S-3, Part V, lines 3 through 18.

S-3 Part V is used to capture the contract labor and benefit cost at the component (Hospital, Subprovider, SNF, etc.) level


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Worksheet S-10

Line 8--Enter the difference between costs and net revenue and for Medicaid by subtracting the sum of lines 2 and 5 from line 7 adding line 2 plus line 5 minus line 7. If line 7 is less than the sum of lines 2 and 5, then enter zero. Line 12--Enter the difference between net revenue and costs for stand-alone SCHIP by subtracting line 9 from line 11 11 from line 9. If line 11 is less than line 9, then enter zero. Line 16--Calculate the difference between net revenue and costs for patients covered by a state or local government program by subtracting line 13 from line 15 15 from line 13. If line 15 is less than line 13, then enter zero.

These corrections were made late in 2011, during the first wave of 2552-10 cost report filings


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Worksheet D Part IV

Column 1 of Worksheet D Part IV is no longer used. Certified Registered Nurse Anesthetists’ (CRNA) services are billed and paid through claims processing and they are now included on Worksheet D Part V.


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Worksheet D Part V

Worksheet D, Part V paragraphs 7 and 8: In accordance with ACA, section 3121 as amended by the Medicare and Medicaid Extenders Act (MMEA) of 2010, section 108, the Temporary Payroll Tax Cut Continuation Act of 2011, section 308, and the Middle Class Tax relief and Job Creation Act of 2012, section 3002, SCHs and EACHs regardless of bed size for services rendered through February 29, 2012, and SCHs with 100 or fewer beds for services rendered from March 1, 2012 through December 31, 2012, are entitled to hold harmless payments. As such, an SCH or EACH with greater than 100 beds whose cost report overlaps March 1, 2012, (Worksheet S-2, Part I, line 120, column 1 is yes) or December 31,2012, must enter the applicable charges in the applicable subscript(s) of column 2 to correspond to the respective portion of the cost reporting period. In accordance with ACA 2010, section 3138, cancer hospitals must utilize a predetermined payment to cost ratio (PCR) to calculate the corresponding transitional outpatient payment effective for services rendered beginning January 1, 2012. The PCR may be revised each calendar year or more frequently. Where the cost reporting period overlaps a PCR revision date, subscript column 2 and the corresponding column 5 to represent the portion of the cost reporting period that corresponds to each unique PCR. See section 4030.2 for further instruction/information.

This impacts the TOPs payment calculation on Worksheet E Part B


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Worksheet D-1 Part I, Lines 3, 4, 28 and 29

Line 3--Enter the total private room days excluding swing bed private room days and observation bed days. If you have only private room days, do not complete this line. Line 4--Enter the number of days reported on line 2 less the number of days reported on line 3. Enter the result of line 2, minus line 3, minus total observation bed days from Worksheet D-1, Part IV, line 87. The result will be semi-private room days exclusive of swing bed semi-private room days and observation bed days. If you have only private room days, such days will be included in this line. Line 28--Enter the total charges for general inpatient routine services, excluding charges for swing bed-SNF type and NF type inpatient services and observation bed days (from your records). Line 29--Enter the total charges for private room accommodations, excluding charges for private room accommodations for swing bed-SNF type and NF type inpatient services and observation bed days (from your records).

The CMS change to exclude observation bed days/charges from these lines can have an impact on the outcome of the cost report. This is a retroactive change that will impact cost reports previously filed with Form CMS-2552-10.


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Worksheet E Part A, Lines 2.01 and 69

Line 2.01--For inpatient PPS services rendered during the cost reporting period enter the operating outlier reconciliation amount for operating expenses from line 92. Line 69--Enter the time value of money for operating expenses, the capital outlier reconciliation amount and time value of money for capital related expenses by entering the sum of lines 93, 95 and 96. For SCH, if the hospital specific payment amount on line 48, is greater than the federal specific payment amount on line 47, do not complete this line.

Lines 90-96 are in the area of E Part A that is for MAC use only.


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Worksheet E Part A / Exhibit 4 (Low Volume Adjustment calculation)

(Discussion of new Exhibit 4, using Form CMS-2552-10 Transmittal #3 instructions – see separate handout)


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Worksheet E Part B, TOPs Payment Changes and Cancer Hospital PCRs

Worksheet E, Part B, paragraphs 1 and 2: Use a separate copy of Worksheet E, Part B, for each of these reporting situations. If you have more than one hospital-based subprovider, complete a separate worksheet for each facility. Enter check marks in the appropriate spaces at the top of each page of Worksheet E to indicate the component program for which it is used. When the worksheet is completed for a component, show both the hospital and component numbers. For purposes of prospective payment for outpatient services when the PCR transition date (applicable to cancer hospitals) (see the following paragraph), transitional outpatient payment calculation date, or geographic reclassification date (urban to rural only) (42 CFR 412.103 and 412.230) occurs at other than the cost report period beginning date , complete subscripted column 1.01 in addition to column 1 to for lines 2 through 8 only. Order the subscripted columns chronologically as the transition dates or geographic reclassification corresponds to your fiscal year. The dates should also agree with the format on Worksheet D, Part V, columns 2, 2.01, 2.02 and 2.03, etcetera, if applicable. In accordance with ACA 2010, section 3138, cancer hospitals (as defined in 42 CFR 412.23(f)) must utilize a predetermined payment to cost ratio (PCR) to calculate the corresponding transitional outpatient payment effective for services rendered beginning January 1, 2012. Where the cost reporting period overlaps a PCR revision date, subscript column 1 as indicated in the preceding paragraph to correspond to each unique PCR. For calendar year 2012 the PCR for cancer hospitals is 0.91, but is subject to change every calendar year or more frequently. Enter the applicable PCR(s) on line 5, column 1 and applicable subscripts. See Federal Register, vol. 76, November 30, 2011, page 74206.

At this point, the Cancer Hospital PCR is expected to be 0.91 in CY 2013 as well as in CY 2012


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TOPS Payment Scenarios, FYB on and after 5/1/2010


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TOPS Payment Scenarios, FYB on and after 5/1/2010 (continued)


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Worksheet E-3 Part II Line 27 and E-3 Part III Line 28

Worksheet E-3, Part II Line 27--Enter the amount from Worksheet E-4, line 49 for the hospital component (freestanding IPF) only. Do not complete this line for an IPF unit.

For Hospital-based IPFs and IRFs, the direct GME payments will appear on the Hospital’s Title XVIII Part A settlement page as applicable

Worksheet E-3, Part III Line 28-- Enter the amount from Worksheet E-4, line 49 for the hospital component (freestanding IRF) only. Do not complete this line for an IRF unit.


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Worksheet E-4 Clarifications

Line 22--Section 422 Allowable Direct GME FTE Resident Count: If the count on line 21 is less than or equal to the count on line 20, then divide line 8 by line 6, and multiply the resulting ratio by the amount on line 21. If the count on line 21 is greater than the count on line 20, then divide line 8 by line 6, and multiply the resulting ratio by the amount on line 20. Line 26--Enter in column 1, for title XVIII, the sum of the days reported on Worksheet S-3, Part I, column 6, lines 1, 8 through 12, and 16 through 18, and subscripts, as applicable. For titles V or XIX, enter the amounts from columns 5 or 7, respectively, sum of lines 1, 8 through 12, and 16 through 18, and subscripts, as applicable. For title XVIII, enter in column 2, Medicare managed care days from Worksheet S-3, Part I, column 6, lines 2, 3 and 4. For title XIX, enter in column 2, Medicaid managed care days from Worksheet S-3, Part I, column 7, lines 2, 3 and 4 . Line 27-- Transfer to columns 1 and 2, respectively, the sum of the days reported on Worksheet S-3, Part I, column 8, lines 1, 8 through 12, and 16 through 18 and subscripts as applicable. Enter in column 2 the sum of the amount from line 27, column 1 and the amount from line 26, column 2, for Medicare managed care days from Worksheet S-3, Part I, column 6, lines 2, 3, and 4. Line 30--In column 2, enter the amount on line 29, column 2 multiplied by the reduction factor reported in the FR dated August 1, 2000, Vol. 65, section D and E, pages 47038 and 47039. This is the reduction for direct GME payments for Medicare managed care (Medicare+Choice).

Prior to the revision to the instructions for Line 30, the line description had read “Reduction for nursing/allied health” which had caused confusion among affected hospitals.


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Worksheet L Part I Lines 8 and 10

Line 8--Enter the percentage resulting from the calculation of Medicaid patient days (Worksheet S-2, Part I, columns 1 through 6, line 24) to total days reported on Worksheet S-3, Part I, column 8, line 14, plus column 8, line 32, minus the sum of lines 5 and 6, plus employee discount days reported on worksheet S-3, Part I, column 8, line 30. This amount agrees with the amount reported on Worksheet E, Part A, line 31. Line 10--Enter the percentage that results from the following calculation: (e .2025 x line 9)-1 where e equals 2.71828. If Worksheet S-2, Part I, line 22, column 2 is “Y” (Pickle amendment hospital), enter 11.89 percent.

As noted earlier, a “Y” response on S-2 Part I, Line 22, Column 2 replaced a “P” response on S-2 Part I, Line 45, Column 2 to identify “Pickle amendment” hospitals.


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Questions?


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Contact Information

Donald V. Fry

Director

KPMG LLP

355 South Grand Avenue, Suite 1200

Los Angeles, CA 90071

818-227-6936

[email protected]

John Flood

Manager

KPMG LLP

355 South Grand Avenue, Suite 1200

Los Angeles, CA 90071

818-227-6930

[email protected]

mailto:[email protected]

mailto:[email protected]

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