Compliance and Cost Reports

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Compliance and Cost Reports

If you are a Medicare Part A or certified institutional provider, you know that every year, an accurate and timely cost report must be submitted to Medicare Administrative Contractors.  However, if you run into an issue while completing your cost report, do you know where to find the training and resources that you need to answer your questions?


Filing an inaccurate report falls under the False Claims Act, and it is critical that healthcare organizations have trained staff members to pull the appropriate data required to file a cost report.  As healthcare organizations who have been found to be noncompliant in their cost reporting will tell you, noncompliance is extremely costly for both providers and the federal government.  Take a look at some recent Office of the Inspector General (OIG) audit reports to see how large the financial impacts of noncompliance can be.


Some Recent Cases of Noncompliant Medicare Cost Reporting

Medicare Cost Reporting Requirements

This year, OIG reported that the National Institute of Transplantation (NIT), an independent histocompatibility lab, did not fully comply with Medicare’s cost-reporting requirements.  In the cost report in question, NIT had correctly reported only 177 of 186 cost transactions.  In total, the OIG estimated that NIT had received approximately $45,940 in overpayments from Medicare.  OIG concluded their audit report by recommending that NIT work with the Medicare Administrative Contractor to return potential overpayments and identify any additional similar overpayments that may be related to cost reports.


Referring Medicare Cost Reports and Reconciling Outlier Payments

A couple of years ago, two organizations were cited by OIG as not always correctly referring their Medicare cost reports to CMS.  For example, Cahaba Government Benefits Administrators had only referred 5 out of 13 cost reports with outlier payments that were qualified for reconciliation to CMS.  The financial impact of this noncompliance was estimated to be over $9,700,000 in total, of which just over $601,000 was due to Medicare.  Another organization, CGS Administrators, had referred 15 of 18 qualified cost reports to CMS for reconciliation, but of those 15 referred reports, they had neglected to reconcile the outlier payments for 14 reports.  The financial impact of these affected reports was estimated at about $39,000,000 combined, with over $16,000,000 due to Medicare.


OIG provided both of these organizations with a number of recommendations following their audits, including:

  • Review cost reports that had not been settled and should have been referred to CMS and take appropriate action to refer them to CMS so that it might recover funds due.
  • Review cost reports that had been settled but were in error, determine whether these cost reports may be reopened, and work with CMS to resolve funds that may be due to the federal government.
  • Review cost reports that were referred to CMS and work with CMS to finalize these reports, reconcile funds due, and return such funds to the appropriate institution.
  • Improve policies and procedures to ensure the reconciliation of all qualified outlier payments associated with cost reports.
  • Review all cost reports submitted since the end of OIG’s audit to make sure that qualified reports and outlier payments were referred and reconciled in accordance with federal guidelines.


Medicare Organ Statistic Requirements

In 2012, LifeCenter Northwest, a federally designated independent organ procurement organization, was reported to have not fully complied with Medicare requirements for reporting organ statistics.  In the affected cost report, LifeCenter had reported incorrect organ statistics for 15 different organs.  In the end, Medicare’s share of organ procurement costs was overstated by about $88,000.  OIG recommended that LifeCenter submit a revised cost report to correct the overstatement and work to ensure that future reports followed Medicare requirements.


One of the best ways to avoid noncompliance and ensure that your healthcare organization correctly reports costs to Medicare is by utilizing professional resources and training.


Cost Reporting Resources and Training

The Centers for Medicare and Medicaid Services (CMS) have published numerous links and resources on their website to help providers learn more about cost reporting.  They also provide a Frequently Asked Questions document that covers some of the most common questions regarding the cost reporting process.  If you have had questions about your Medicare cost reports in the past, visit the CMS website to review some of the cost reporting resources that CMS offers.


You can also enroll in specialized training programs for cost reporting.  The American Institute of Healthcare Compliance is offering a Medicare/Medicaid Cost Reporting Training Camp, which will include the option to certify as a Certified Cost Report Specialist (CCRS).  This program is the first of its kind to offer a credentialing option to highlight the cost report training you will receive!  Visit our training camp information page to learn more about this unique training opportunity.


| Categories: AIHC Professional Articles, Medicare and Medicaid | Tags: CMS, OIG, Providers, Medicare and Medicaid, Compliance, Healthcare Employees, Cost Reporting, Training, False Claims Act | View Count: (2322) | Return

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