During a proper Medicare cost report review, you should expect the reviewer to point out potential opportunities to increase revenue.
Medicare shares in the cost of Nursing and Allied Health programs by making pass-through payments to hospitals that operate qualifying programs. If the hospital inadvertently omits these costs from the cost report, they can be forgoing hundreds of thousands of dollars of reimbursement. The revenue recovered can be even greater if the problem occurred on previous cost reports, and they are still not settled.
A review of the MCR can identify opportunities to reclassify a provider from its current geographic Core-Based Statistical Area (CBSA) to another CBSA with a higher wage index. This can substantially increase ongoing Medicare reimbursement.
Disproportionate Share (DSH) eligible days
Disproportionate Share (DSH) payments are determined in large part based on information provided in the MCR. One key factor in the calculation is the number of Medicaid patient days. It is not uncommon for patients to become Medicaid eligible six months or longer after a hospital’s year end.
Often, hospitals can retroactively capture additional days of eligibility if they perform a DSH analysis subsequent to the initial cost report filing. However these days must be identified prior to the start of the cost report audit, which is typically six to twelve months after the initial filing date. The value of performing a DSH analysis is critical to ensure the hospital is capturing all eligible days and maximizing overall reimbursement.
Bad debt cases
Many hospitals do not include all allowable Medicare bad debt on worksheet S-10. By properly identifying and documenting missing bad debt cases, the hospital can recover 65% of the amount omitted from the MCR.