Completing your Medicare Cost Report can be a challenge. BESLER’s Director of Reimbursement, Jeff Wolf, answers your questions from our Cost Report 101: Part 1 Webinar.
- Would observation services be included as outpatient services?
Yes, observation services are grouped to cost report line 92 (Non-Distinct) or line 92.01 Distinct units. Medicare considers these activities as outpatient services.
- Are bonuses included in the employee’s salary?
Yes, a bonus is considered a payment to an employee for the work performed. It is included in the salaries section of work sheet A.
- Where is patient billing on the Medicare Cost Report?
You can choose to include patient billing on either cost report line 5 (Admin) or you can create a subscript of line 5 specifically for Patient Accounts.
- Since HFS doesn’t allow the use of decimal places, how do you suggest handling salaries or other expenses on work sheet A if the amount is off by a single dollar from what was entered in HFS?
The Medicare cost report form does not allow for decimals. All numbers are rounded to the nearest dollar. You have the option to show the rounding difference as a reconciling item for the total on your report.
- Should pharmacy and drugs charged to patients be reclassed to different lines?
The pharmacy department manages the distribution of drugs to patients. The drugs are the actual medicine that is taken by the patient. All drugs should be reclasses to cost report line 73 (Drugs Charged to Patients). The Pharmacy expense (excluding the drugs) would stay in worksheet A, cost report line 15 (Pharmacy). Most of the pharmacy drug expenses will be allocated on work sheet B-1, cost report line 73. There are instances where some of the pharmacy expenses are allocated to a non-reimbursable line such as research, which provides drugs as part of a research project.
- Where do you record the meals provided to the medical staff? Is there a limit to the amount a facility is allowed to “give” them?
Usually, you split the patient versus non-patient meals in the meals statistic. I suggest putting the medical staff’s meals in the non-patient category (Cafeteria). The cost of the portion of the meals related to the medical staff would be a work sheet A-8 offset (on work sheet A-8 or work sheet A-8-2) depending on how you want to treat these expenses.
- Would there be any benefit for CC#10 to make the metric patient days?
Many hospitals take advantage of this option. If you use the patient days, make sure to exclude Nursery and NICU. These babies are formula fed, which is not prepared by the Dietary staff.
- How do we classify provider based clinic charges versus freestanding clinics?
Provider-based clinics should be grouped to a separate cost report line than the free standing clinics. Therefore, the charges will be separated based on the department/clinic that they belong to.
- Can you make exceptions for the standard Statistics like Square Footage or Accumulated costs?
Yes, but you will need to make sure that you can support the fact that the department you are “excluding” from the allocation does not receive any (material) benefit from the expenses being allocated.
- How do we decide whether to Offset an expense as non-allowable vs reclass that expense to Non-Reimbursable Cost Centers?
The basic rule is that an expense is Non-Allowable (WS A-8 Offset) if there is not Administrative support to that activity. Examples un-necessary borrowing, CRNA’s, Alcohol, etc. When an expense requires the support of Administration in order to function then it should be considered a Non-Reimbursable (NRCC) activity and move to Non-Reimbursable Cost Report line (Lines 190+). Examples of this are Marketing expenses, Physician Offices, Non-Patient Treatment related activities, etc.