From Maps to Apps: Advertising Public Info on Hospital May Be an Allowable Cost

Many years ago, the only real way to find your way from one city to another was to use a paper road map that had to be unfolded (and, of course, never folded back up the original way).

Today there are many options to help you navigate from websites such as MapQuest and Google Maps, stand-alone GPS units, and smart phone apps such as Waze or Co-pilot.

A similar situations exists for finding a hospital; many years ago you just had to look for the road sign and easily locate the nearest facility.

Today there are many options that publicize and promote hospitals which not only tell you where to find one, but what services they offer, the operating hours, physicians on staff, and many other things. Nowadays many ads go one step further and seek to differentiate it from other hospitals by citing statistics of quality, patient satisfaction, faster wait times, etc.

Tip #29:

Advertising that can be characterized as public information may be considered an allowable cost (CMS Pub 15-1, Section 2136).

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


Right Place at the Right Time

Flight attendant serving mealTaking an airplane flight involves getting you from one place to another, but where you sit and how much you pay widely varies these days. Some airlines offer first class, business class and coach, while others have only one kind of seating. The in-flight services you receive also vary. First class often receives complimentary drinks, food and other perks that the other sections do not. The overall result is you generally get what you pay for.

In receiving care at a hospital, one sometimes runs into a similar experience. Where you are treated influences the care you receive. If a patient presents in a hospital emergency room (E/R) and needs to have IV fluids infused over four hours, the cost of providing that service is different than if a patient had an IV fluid infusion in an inpatient room (I/P). In the E/R, you might be on a gurney with a curtain drawn around and a nurse gives you the infusion while also looking after four or five other patients. In an I/P room, you get a nice bed in a private room and the nurse may only have one to two other patients.

When the service gets billed to Medicare, there is no difference in how you get paid. But for some hospitals it is important to properly identify the costs on the Medicare cost report.

On the Medicare cost report, the B-2 post stepdown adjustment is designed to help CMS appropriately partition and understand the cost of providing care at a hospital, based on the acuity of the service provided, rather than the location.

Tip #26:

Use a B-2 adjustment when outpatient ancillary services are provided in an inpatient area. (Pub. 15-2, §Section 4022)

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


Miscellaneous Expenses: Almost Like the Honor System at a Country Store

Rural Store Market Building in Country Small Town AmericaHave you ever shopped at a country store that operates on the honor system to pick-up miscellaneous produce? The Merriam-Webster Dictionary defines miscellaneous as: “consisting of diverse things or members.” In accounting terminology, the common usage is miscellaneous expense and is defined as: “An income statement account for expense items that are too insignificant to have their own separate general ledger accounts.”

CMS provides some guidance in identifying the types of miscellaneous expenses and other income that is required to be offset. Just like at a store on the honor system, it is your responsibility for reviewing these amounts and ensuring they are documented accordingly—only CMS will retroactively hold you accountable if you misstate amounts on your cost report.

A helpful tip to remember is if the income is not related to care of hospital patients, then odds are, it should be offset!

Tip #20:

Miscellaneous revenue or income should be offset via Worksheet A-8 (Pub. 15-2, Section 4016).

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

Provider Reimbursement Manual 15-2, Chapter 40

Questions? Please contact Marie White at 612.253.6546 or

Wage Index Contract Labor – It Takes a Village

Marie White

Marie White

There’s an expression, “It takes a village to raise a child.” The same could be said for a hospital—it takes a village to run a hospital. Beyond the nurses and doctors who take care of the patients, there are housekeepers, radiology and laboratory techs, maintenance folks, and a myriad of others who all contribute to the day-to-day operations of the hospital.

Worksheet S-3, Part II is used to report wage and hour data which is needed to update the hospital wage index applied to the labor-related portion of the national average standardized amounts of the PPS. It is important for hospitals to ensure that the data reported on Worksheet S-3, Parts II, III and IV, are accurate.

Tip #4:

For Wage Index contract labor you may include clinical/patient care-related and/or executive/administrative services (Pub 15-2, §4005.2).

Further guidance on the types of expenses that should be included on S-3, Part II can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-2

Questions? Please contact Marie White at 612.253.6546 or


Payments Can Make or Break You

Marie White

Marie White

“The difference between something good and something great is attention to detail.” Charles R. Swindoll

Medicare pays Acute Care Hospitals for Part A and B services via submitted claims; inpatient is paid under Diagnosis Related Groups (DRGs) and outpatient is Ambulatory Payment Classifications (APCs). Some hospitals can receive added payments for things such as medical education, bad debts, uncompensated care, and others. Medicare will often make additional payments for these items on a periodic basis.

When completing the cost report, it is extremely important to identify the payments you have received on individual claims—these are on a Provider Statistical and Reimbursement (PS&R) report. You also need to include any additional payments you have received for other items. Over- or understating one of these could have a significant impact on the due to/from settlement.

Tip #3:

Confirm and include all pass through and lump-sum payments (Pub 15-2, §4031)

The cost report must include all interim Medicare payments paid on individual bills, pass through payments for services rendered in this cost reporting period.

Further guidance on the types of payments to be disclosed on Worksheet E-1 can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-2

Questions? Please contact Marie White at 612.253.6546 or


Worksheet S-2: Know Your Facility

Marie White

Marie White

In the words of the famous philosopher Aristotle, “The more you know, the more you know you don’t know.” This quote couldn’t be more appropriate for cost reports.

The Centers for Medicare and Medicaid Services (CMS) generally publishes regulations and notices on the fourth Friday of each month. In 2015, this amounted to more than 200 notices, so keeping up is somewhat of a challenge!

One thing that may make it easier to stay current with the changes is a better understanding of your own facility. The cost report includes a Worksheet S-2 that has various questions about your facility and if you can develop an understanding of these, it could help you know when a newly published regulation has a potential impact on you.

Tip #2:

Confirm all S-2 questions are answered properly (Pub 15-2, §4004)

Worksheet S-2 includes Part I (171 questions) and Part II (43 questions) and the corresponding instructions encompass twenty-seven pages; the entire instructions are 500+ pages so some “light reading” when you have some free time. Separate instructions exist for SNFs (Chapter 41) and Hospice (Chapter 43).

The instructions are available on the CMS website:

Provider Reimbursement Manual 15-2

Questions? Please contact Marie White at 612.253.6546 or

Medicare Cost Report Talk

Marie White

Marie White

Welcome to Medicare Cost Report Talk! Medicare Cost Reports can be like the famous line from the movie Forrest Gump: “Life is like a box of chocolates, you never know what you’re going to get.” Until now!  We’re starting this blog to share cost report tips to help you learn more about this complex document, and maybe save you some time in the process.

The Medicare cost report is a required filing for any facility that treats Medicare patients. Each “provider type” (e.g., hospital, nursing home, rural health clinic, home health agency, etc.) has its own specific report. The report contains information such as facility characteristics, utilization, costs and charges.

The instructions for completing each type of report are complex. They are available on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manuals

Tip #1:

If a provider did not furnish any covered services to Medicare beneficiaries or had low Medicare utilization, a full cost report need not be filed (Pub 15-2, §110).

In future weeks, we will delve more deeply into the cost report and its instructions and hopefully you can learn something new.

Questions? Please contact Marie White at 612.253.6546 or