The Life of a Medicare Cost Report
September 24, 2019
Medicare payments to hospitals for services performed are reported in the hospitals annual cost report. This cost report accounts for all expenses the hospital had for the previous fiscal year, including costs for Graduate Medical Education. This article will explain the statutory deadlines and steps hospitals take to receive proper Medicare payments.
Cost Report Filing
Each cost report is due to the Medicare Administrative Contractor (MAC) five months after the closing of the hospital’s fiscal year. A hospital’s fiscal year is unique to each hospital and does not always coincide with the academic year. The MAC, as defined on the CMS website, “is a private healthcare insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B medical claims…”
Cost Report Amendments
Once the hospital submits its cost report, the MAC will issue a tentative settlement. The final amount will not be paid to the hospital until the MAC has audited the cost report. This may take up to a year or several years, depending on the workload of the MAC and any outstanding Medicare payment issues that may impact the hospital’s Medicare payment for the given year. During this time, the hospital can submit an amended cost report, however, the MAC is not obligated to accept the amended cost reports.
Final Settlement or Notice of Program Reimbursement
Once the MAC reviews the cost report for accuracy, they will issue a final settlement or a Notice of Program Reimbursement (NPR). If the hospital disagrees with any of the MAC’s final determinations, there are two options to attempt to correct the settlement:
1) Appeal to the Provider Reimbursement Review Board
The hospital has 180 days from the date of the NPR to file an appeal with the Provider Reimbursement Review Board (PRRB). Additionally, a hospital can add issues to a filed appeal up to 60 days after the initial 180-day deadline. Most often, the PRRB will not allow an appeal to be heard if the hospital does not appeal an audit adjustment. Depending on the complexity of the issue and the workload of the MAC and PRRB, the appeal process may take several years.
The PRRB does not always hear each case — Often, the MAC and hospital can agree prior to the PRRB hearing. If this agreement cannot be made, then the PRRB will hear the case. Once the PRRB issues its decision, the CMS Administrator will review the decision and has 60 days to affirm or modify the decision. If there is no action by the CMS Administrator within 60 days, the PRRB decision stands.
If the hospital is dissatisfied with the PRRB or the CMS Administrator’s decision, it can file an action in the District Court, Court of Appeals and Supreme Court.
2) Cost Report Reopening
Alternatively, a hospital may request a reopening of the cost report. A hospital has three years from the date of the NPR to request the reopening. The MAC has full discretion on whether they reopen the cost report or not. When requesting a reopening, the hospital must submit complete documentation to show there is a material error in the settlement of the cost report. For this reason, an appeal can be the safest route as long as there is an audit adjustment to appeal because the PRRB must accept the appeal if the hospital meets the basic requirements.
Hospitals must know the statutory deadlines to ensure proper payment from Medicare
How We Can Help
In today’s reimbursement environment, successfully appealing and reopening cost reports are not easy to accomplish. MAC’s are quicker and more willing to issue jurisdictional challenges and reopening denials than ever before.
One of our goals is to help providers file complete and accurate reports the first time, which would result in providers receiving the correct amount of reimbursement. We aid in this process in many ways, including providing educational seminars to teach coordinators what information needs to be documented and provided for proper reimbursement, assisting with IRIS creation, and reviewing cost reports for errors before submission.
For this type of review, GME Solutions structures its fees on an hourly basis. Please call for a free quote today.