Medicare requires that providers of certain services are required to prepare on an annual basis a cost report which shows the total expenses to provide services and the Medicare allowable expenses used by CMS to review and adjust rates. The information is also used by MedPac, Medicare Payment Advisory Services Commission, to advise the US Congress on the financing and delivery of care.
Parts of the Medicare Cost Reports are used to determine wage adjustments for the labor components for services in certain geographic areas of the United States. Also, for some PPS providers the Bad Debts are calculated and reimbursed according to CMS policy.
The accuracy of the wage index information along with the Bad Debt Accuracy in producing the cost reports are of extreme importance. If they are calculated incorrectly, the provider is under reimbursed for allowable services provided.
A valid way to analyze this information is to breakdown the Medicare Cost Report into key components and compare to industry averages to see how your facility compares to the broader market.
In all types of Medicare Cost Reports there are key Matrices that show the management how well the provider is delivering the care to the community. Some examples are:
Joseph Kenny, CPA, CMA
Paisley & Elm, LLC
1724 W. Berwyn Ave #1
Chicago, Illinois 60640
Cellular 312-203-1771
Fax 312-275-7967
E-mail address:
ccoppney@medcostreports.com
To get more information on Cost Report filing
Joseph Kenny, CPA, CMA
