Five Reasons to Ensure Your Cost Reports are Accurate
Posted On: February 22nd, 2012
Principal, Boyd & Nicholas
We make choices every day about where to focus our attention. If every item on our personal or business to-do lists received our undivided and intense attention, nothing else would get accomplished, so compromises always are necessary.
But one area where your agency shouldn’t compromise is the cost reports you file with your Medicare Administrative Contractor. You could be leaving money on the table or face payment recoupment, prosecution or other penalties by not focusing your attention on this vital report.
Here are five reasons why Medicare reports should receive your full attention.
- Rate determination. CMS uses these reports to set payment policies. If you aren’t accurately recording your wage information, costs for non-routine medical supplies, number of episodes and other measures that reflect the efforts of your home health agency, CMS will have an inaccurate picture of costs. A rebasing of the Prospective Payment System is in the works, and the cost reports being filed now could be the basis of new rates.
- Compliance. You are required to fill out the cost report accurately and can face prosecution for filing a false claim. Why take that risk?
- Medicaid. Depending on the program, you may need to create a separate and distinct cost report from the one submitted to Medicare. Again, filing an incorrect report can leave your agency open to a false claim or other legal action.
- Flu reimbursement. Your agency needs to be especially attentive to not only the cost of the flu vaccine but also overhead costs of administering the vaccine for reimbursement purposes. If you have this program, you need to report those costs accurately.
- Benchmarking. In order to compete with other home health agencies, you must have a clear idea of your costs for each Medicare episode, including the direct and indirect cost for each visit, number of visits per episode and other metrics. Compiling and reporting these costs accurately will provide a valuable benchmark so you can compare your agency against local, regional and national standards.
The information you need for the cost report is contained in your billing, payroll and accounting systems. Once you complete a report, it should be easier next time as you learn what information to compile and how to present it.
And if you don’t feel this is a core competency of your agency, reputable firms can prepare the report from the information you provide. Either way, you owe it to yourself and other home health agencies to accurately and fully complete the Medicare cost reports.
Thomas E. Boyd is a principal at Boyd and Nicholas, a cost report preparation firm that specializes in home care and hospice. For more information, visit www.boydandnicholas.com or contact Boyd at firstname.lastname@example.org.