Ask For Permission, Not Forgiveness

ask-2341784_1920The expression “It is easier to ask forgiveness than it is to get permission” is attributed to Rear Admiral Grace Murray Hopper. She was a U.S. Naval officer and an early computer programmer who, in 1949, recommended a new programming language be developed using entirely English words. She was told she couldn’t do this because computers didn’t understand English. She did not accept this idea and started work on the process, which later become COBOL, which is the major language used in data processing today.

This tactic is not the one you should use if you are wanting to change the allocation basis on your Medicare cost report. The Centers for Medicare and Medicaid Services (CMS) has a set of standard statistics they have approved for use to allocate expenses on the Medicare cost report. If you decide you want to change the order or use a different statistic, this is permissible but CMS has specific instructions on how and when this is allowed. If you make a change without this request, you are at risk of having your cost report rejected.

Tip #36:

A request to change cost finding methods must be made in writing and submitted to the intermediary 90 days prior to the end of the cost reporting period to which the request for change applies (CMS Pub 15-1, Section 2313).

Further guidance can be found on the CMS website: Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.

Miles per Dollar and RHC FTEs

People running Outdoor activity Healthy lifestyleWhat if someone offered you $10,000 to walk 10 miles; the next person is offered $10,000 and only has to walk five miles? Then another person is offered $10,000 for one mile. Your 10-mile deal seems pretty unfair now, doesn’t it? Why should someone walk less and get paid the same? Productivity standards in health care exist to prevent this type of unfairness. A minimum level of effort is established to correspond with the dollars to be paid.

The Rural Health Clinic (RHC) program is intended to increase access to primary care services for Medicaid and Medicare patients in rural communities. A RHC is a clinic located in a rural, medically under-served area in the United States as defined by the Health Resources and Services Administration.

RHCs are staffed by a combination of physicians, nurse practitioners (NP), physician assistants (PA), and certified nurse midwives (CNM). Minimum staffing levels are required based on full-time equivalents or FTEs (which are the “miles”).

The computation of the FTE for each nurse practitioner, physician assistant, or certified nurse midwife can be confusing as only the time spent seeing patients or scheduled to see patients should be counted. The same challenge exists in computing the Physician FTE.

Tip #22:
Ensure RHC FTEs are properly computed (Chapter 13, §80.4).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Medicare Benefit Policy Manual RHC/FQHC

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.

What does a Post Office and a Health Care Organization have in common?

Man sending a letter

The postal service faces what seems to be a monumental task each day. It needs to take piles and piles of mail, identify where each one should go and sort them carefully so they can be sent to the right post office for delivery. How do they make this system work? They have zip codes. These codes help route the mail to the proper local office, regardless of where it originated.

Your coding needs to be properly identified and sorted, too. In health care for the cost report, our zip code equivalent is the Cost Center. Each service is tied to a specific Cost Center, regardless of the different elements of a service. All services need to roll-up to one overall Cost Center when coding.

Tip #21:

If adding a “non-standard” cost center, be sure to select the appropriate cost center code (Pub. 15-2, §Section 4095).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website.

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.

Forgetta ‘bout it: Free Agents and FICA

QuarterbackFall time is synonymous with football. Just as in football, health care has it’s own brand of free agents. And just as in football, compensation and other related activities are treated differently in health care. Find out how you can say “forgetta ‘bout it” to private practice physicians and FICA and other employment-related taxes on your cost report.

Per the 2015 Medscape Physician Compensation Report, 63 percent of physicians are employed, with less than a third (32 percent) in private practice. This follows the trend reported by a major physician recruiter, which revealed a hospital employment rate of 11 percent in 2004, rising to 64 percent in 2014. This shift is occurring due to the increasingly uncertain environment and burdensome administrative requirements in private practice.

Employment of physicians is challenging for many reasons, including how it’s reported on Medicare cost report. Employed physicians’ compensation must be disclosed on Worksheet A-8-2 as either provider or professional component (see Medicare Cost Report Talk blog tip #10 posted on June 13).

Employment-related taxes, such as FICA, Workers’ Compensation and Unemployment Compensation, which are paid by a hospital on behalf of an employed physician, are considered business expenses of the hospital and not fringe benefits. Thus, the amount for A-8-2 excludes these dollars.

Tip #19:

For Worksheet A-8-2, exclude FICA from the benefits add-on to physician salary (Pub. 15-1, Section 2122.3).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.