Changes in cost reporting

CMS wants agencies to use a new cost reporting form to capture more detailed information

If the devil really is in the details, as the familiar idiom suggests, he may have to scoot over to make room for the Centers for Medicare and Medicaid Services (CMS).

As of Oct. 1, Medicare is requiring homehealth agencies to furnish much more specific information in cost reports. New reports must catalog details in the breakout of visits, patients, salaries, benefits, contract pay, and hours by discipline and by payer.

“CMS wants to see some significant detail now in homehealth cost reporting, and has issued a new homehealth cost report (Form CMS-1728-20) to capture this data,” said Mike Simione, Manager of Finance and Data Analytics for Simione Healthcare Consultants. 

The new form will be retroactive for agencies with fiscal years beginning on or after Jan. 1, 2020, Simione said.

“This change means agencies should be breaking out their data on their professional and paraprofessional staff in both their EMR software and general ledger chart of accounts to capture the added levels of detail,” Simione said.

Why accuracy matters

CMS uses data from cost reporting and other data collection efforts to make decisions about compliance requirements, payment amounts and more. In many ways cost reports help set the course for the future of homehealth.

“We saw how important the cost reports were in the calculations used to build the new PDGM reimbursement model and the national periodic and per visit rates,” Simione said. 

This year’s Covid-19 pandemic prompted a sudden and significant increase in the number of telehealth visits used across the health care spectrum, including home health, even though virtual home visits were not billable. Instead, agencies relied on cost reports to capture accurate financial information about the cost of telehealth.

Pending legislation now before Congress would allow agencies to bill Medicare for virtual visits to homebound patients, but details such as reimbursement amounts have not yet been established.  If the legislation passes as expected, it is likely that CMS will rely on cost reports showing telehealth data as part of the process used to determine the amount of future reimbursement for virtual visits. “It’s clear that what we report must be as accurate as possible in order to capture a clear picture of what’s happening in the industry,” Simione said.  Cost reports can help agencies at the immediate level, too, according to Simione.  “Cost reports can be used as a management tool for decision-making to support financial success and maintain compliance standards,” he said. 

Need help with cost reporting? As the nation’s largest preparer of these cost reports, Simione Healthcare Consultants can lower your preparation cost while providing expertise for data extraction, analysis, and timely and accurate filing. “We’re here to assist in adopting the changes and in keeping cost reports timely, accurate and meeting all requirements,” Simione said. Services include benchmarking and reviewing key performance markers such as:

  • Medicare profit margin

  • Profit or loss by episode

  • Average cost per episode

  • Average number of visits per episode

In addition Simione can help with CAP analysis and other government reporting.  Please reach out to get your free quote.