Admin & Finance - Section 6: Cost Reporting Flashcards
True or False:
A cost report is required because Medicare will cut off payments to the clinic for an unfiled cost report
True
True or False:
A cost report is required because Medicare will cut off payments to the clinic for an unfiled cost report, but thy will not request all payments made to the provider be repaid to the program
False; Medicare will cut off payments to the clinic for an unfiled cost report and will ultimately request all payments made to the provider be repaid to the program.
Cost reports are due ____ calendar months from the clinic’s year end.
5 calendar months
Cost reports are due 5 calendar month for the clinic’s ____ ____
Year end
How must cost reports be submitted?
In electronic format (ECR) file on CMS approved vendor software via mailed CD or electronically through CMS portal
If a cost report is filed via CD, what must also be submitted?
A signed hard copy and an electronic “fingerprint” matching the electronic cost report
RHC rate is synonomous with what?
RHC cost per visit
How do you calculate the RHC cost per visit?
Allowable RHC costs / RHC visits
Allowable RHC costs / RHC visits = ____ ____
RHC cost per visit or RHC rate
True or False:
The RHC rate cannot exceed the maximum allowable reimbursement rate for the current period
True
True or False:
Independent RHCs or clinics attached to a hospital with greater than 100 beds have a capped RHC rate
False; 50 beds
True or False:
The cost report is where you get paid for pneumococcal and influenza vaccine costs and Medicare bad debt
True
The cost report determines future interim ____ rates
Payment
What does the cost report reconcile?
Medicare’s payment method to actual cost per visit
What is reported on Worksheet S?
Statistics
Worksheet S is for ____
Worksheet S-8 is for ____
S - independent
S-8 - provider based
What 3 statistics should be reported on Worksheet S?
Facility name, entity status, hours of operation
Clinic hours of operation should reflect what?
The hours practitioners are available to see patients
True or False:
Clinic hours should be broken down between hours operating as RHC and non-RHC
True
What format should clinic hours of operation be reported in?
Military
If filing for no utilization on Worksheet S, what do you put on line 4?
N
If filing a low utilization on Worksheet S, what do you put on the cost report?
L
Low utilization on the cost report is normally for payments made by the program for less than $____.
$50,000
Worksheet S-2 is for ____ RHCs
Independent
What does Worksheet S-2 replace?
CMS 339 questionnaire for independent RHCs
Worksheet S-3 is for ____ RHCs
Independent
What 2 things do visits need to be broken down by within Worksheet S-3?
Visit type and program/payer
True or False:
When breaking down visits by program/payer type for Worksheet S-3, you should include regular Medicare and Medicare Advantage
False; do not include Medicare Advantage
What is reported with Worksheet A?
Expenses
Worksheet ____ reports expenses for independent RHCs and Worksheet ____ reports expenses for provider based RHCs
A, M-1
What expense reporting documents should be used with Worksheet A, M-1?
Balance sheet, P&L, trial balance
Financial statements must match the ____ reporting period
Cost
What is the most frequent cost reporting period? What do other clinics sometimes use?
1/1/xx - 12/31/xx
7/1/xx - 6/30/xx
For new clinics, financial statements must reflect costs for what time period?
From the date of the clinic’s certification to the end of their first fiscal year
All costs from the financial statements must be reflected in columns ____ and ____ of Worksheet A for independent and Worksheet M-1 for provider based
1 and 2
Expenses should be ____ enough to properly classify within cost report categories (i.e., supplies should be broken up into medical supplies, office supplies, etc.)
Detailed
Miscellaneous/non-patient care revenue must be reviewed for possible ____
Offsets
Non-allowable expenses must be reviewed for ____ or classification in a non-reimbursable cost center
Offset
What are the 3 cost report categories?
Healthcare costs, overhead, non-RHC costs
Compensation for providers, nurses, and other healthcare staff/compensation for physician supervision would be classified in which cost report category?
Healthcare costs
Cost of services and supplies incident to services of physicians (including drugs and biologicals incident to RHC service) would be classified in which cost report category?
Healthcare costs
Cost related to the maintenance of licenses and malpractice insurance for medical professionals would be classified in which cost report category?
Healthcare costs
Malpractice insurance (premium cannot exceed amount of aggregate coverage), depreciation, and transportation of healthcare personnel between clinics or other healthcare locations only would be classified in which cost report category?
Healthcare costs
True or False:
A car paid for by the clinic and provided to a doctor for personal use qualifies as a healthcare cost
False
How is overhead allocated?
On ratio of healthcare costs to non-RHC costs
What are the 2 types of overhead?
Facility and administrative
Rent, insurance, interest on morgage or loans, other building expenses are examples of what type of overhead?
Facility
Office salaries, office supplies, legal/account, contract labor (i.e., housekeeping) are examples of what type of overhead?
Administrative
The RHC rate is calculated by dividing RHC costs by RHC visits. Anything paid outside of this rate will be put where?
In non-RHC costs
What Medicare Part is lab, x-ray, and technical components billed to for independent RHCs?
Medicare Part B
For provider based RHCs, lab, x-ray, and technical components are billed as an ____ service under the parent hospital’s Medicare number
Outpatient
True or False:
Dental, physical, and retail pharmacy are paid through the RHC rate
False; these items and services are not covered by the program
True or False:
CCM and telemedicine services are paid through the all-inclusive rate
False; CCM and telemedicine services are paid outside of the all-inclusive rate
True or False:
Membership costs that are for professional, technical, or buisness-related organizations are allowable
True
True or False:
Social and fraternal memberships are allowable
False; not allowable
True or False:
Research costs are not allowable
True
True or False:
Translation service costs are not allowable
False; are allowable
What is the general rule of thumb in relation to advertising costs?
If it helps patients find you or if it helps you recruit staff, those are allowable. If you advertise to increase patient loads, it is not allowable.
Is staff recruitment advertising an allowable cost?
Yes
Is yellow pages advertising an allowable cost?
Yes
Is advertising to increase patient volume an allowable cost?
No
Is fundraising advertising an allowable cost?
No
Are taxes levied by state and local governments an allowable cost?
Yes, if exemption is not allowed
Are fines and penalties an allowable cost?
No
Is the professional privilege tax an allowable cost?
Yes
Is income tax an allowable cost?
No
Interest expense has to be ____ and ____ interest on current capital indebtedness to be an allowable cost
Necessary and proper
Cost incurred for the use of borrowed funds
Interest
____ interest is incurred on a loan made to satisfy a financial need of a provider
Necessary
For interest to be considered necessary, it must be incurrent on a loan for purpose reasonably related to ____ care
Patient
Is an appropriate allowance for depreciation on buildings and equipment used in provision of patient care an allowable cost?
Yes
To be an allowable cost, depreciation must be:
Identified and ____ in accounting records
Based on ____ cost of asset or fair market value of donated assets
Prorated over the estimated useful ____ of the asset
Recorded
Historical
Life
With few exceptions, what method of depreciation is the only method that is acceptable?
Straight line
Is depreciation on assets purchased with federal funds an allowable cost?
Yes
Is depreciation on donated assets an allowable cost?
Yes
True or False:
Fully depreciated assets still in use cannot have a revised life assigned when enrolling as an RHC
False; can have a revise life assigned
What is Worksheet A-6 / A-8 used for?
Adjustments to cost
Worksheet A-6 is used for what purpose?
To reclassify costs to appropriate cost centers
What are some examples of items or services that would be reclassified to appropriate cost centers on worksheet A-6?
Lab, x-ray, EKG
What are the 2 methods that can be used for reclassifying costs for services performed by staff?
Time staff takes to perform services (lab, x-ray, EKG)
Time studies for each specific test
How is the method of time staff takes to perform services (ex: lab, x-ray, EKG) calculated?
Allocate % of time for non-RHC carve out vs. RHC duties (if staff member takes 20% of their time for non-RHC, pull 20% into non-reimbursable cost center)
How is the method of time studies calculated for reclassifying cost?
Calculate time per test, multiply by number of tests performed, then by average hourly wage
Where should non-RHC wages be reclassified to?
Non-reimbursable cost center
Worksheet A-8 is used for what purpose?
To include additional or exclude non-allowable costs
Entertainment, gifts, charitable contributions, automobile expense (when not related to patient care), and personal expenses paid out of clinic funds are examples of what?
Non-allowable costs that should be excluded on worksheet A-8
Cost of providing telehalth services must be classified in the non-RHC section on line ____ for independent and line ____ for provider based
79
25.01
CCM must be classified on line ____ for independent and line ____ for provider based
80
25.02
True or False:
Telehealth visits should be included in RHC visit reporting
False; do not include
True or False:
Telehealth time should not be included in FTE calculations
True
True or False:
Telehealth and CCM are paid outside of the RHC rate
True
Do you exclude or reclassify telehealth and CCM?
Ask yourself - does it use overhead (space, staff, etc)? If yes, you should ____
Reclassify into non-RHC space
Do you exclude or reclassify telehealth and CCM?
Ask yourself - Is it a non-allowable expense that doesn’t use overhead? If yes, you should use A-8 to ____
Exclude
If telehealth visits are performed by the provider from their home (and this is the only time they do telehealth), an ____ with limited overhead components may be appropriate.
Exclusion
When reclassifying, only allocate ____ costs (i.e., practitioner wages, clinic support wages). Overhead will allocate itself through the cost report.
Direct
For telehealth direct expense calculation, what are the 2 methods that can be use?
Actual time spent
Average time based on partial studies or EMR records (if available)
What is the most common related party transaction (e.g., building is owned by doctors, who also own the clinic. Clinic pays “rent” to doctors.)?
Party building ownership
Mortgage interest, property taxes, building depreciation, property insurance, repairs and maintenance are paid by building owners, and lawn service are examples of what?
Related party building ownership cost items for reporting
Face-to-face encounter with qualified provider during which covered services are performed
RHC visit
What should RHC visits be broken down by?
Provider type (MD, PA, NP)
True or False:
Only face-to-face encounters should be counted as RHC visits
True
True or False:
Visits for hospital, telehealth, non-covered services, non-qualified providers, or injections can be included as RHC visits
False; these should not be included
True or False:
All clinicians working on a regular basis should be included in visits subject to the productivity standard
True
True or False:
If 3 people make up 40 hours in a week, that equals 3 FTEs
False; if 3 people make up 40 hours in a week, that equals 1 FTE
When calculating FTE, practitioners’ work should be categorized into which 3 sections?
Administrative
Patient care
Inpatient care hours
How are FTEs calculated?
Based upon how many hours the practitioner is available to provide patient care
FTE is calculated by ____ type
Practitioner
True or False
Medicare will charge the clinic with a minimum number of visits per FTE, whether performed or not
True
Medicare Productivity Standard
____ visits per employed or independent contractor physician FTE
____ visits per midlevel FTE
4,200
2,100
True or False:
Physician services under agreement are not subject to productivity standards, but there is a limited application to this
True
True or False:
Paying a provider through 1099 automatically means they are not subject to productivity standards
False; does not mean
Medicare Productivity Standards are applied in ____
Aggregate
For the Medicare Productivity Standard, what are total visits compared to?
Total minimum productivity standard
True or False:
A productie midlevel with visits in excess of their productivity standard can be used to offset a physician shortfall or vice versa
True
True or False:
Seasonal influenza and pneumovax reimbursement is done outside of the RHC rate
True
True or False:
You do not have to take vaccines out of net costs
False
True or False:
You only have to include the vaccines that are given to Medicare patients
False; you must report vaccines given to all insurance types
Where should the cost of vaccines be classified? If you don’t do that, where can they be reclassified?
In their specific cost centers on worksheet A
Reclassify on worksheet A-6
For vaccine reporting, total clinical staff hours worked per year becomes the ____ in the vaccine ratio
Denominator
Why are all clinical staff hours included when reporting vaccine administration?
Because all clinical salaries are used in the cost report calculation
____ minutes is the accepted time for vaccine administration
10 minutes
There are some exceptions with MACs limiting vaccine administration to ____ minutes
5 minutes
How do you calculate vaccine administration time?
Total vaccines x 10 minutes (accepted time for vax admin) / 60 minutes
How do you calculate staff time ratio for vaccine reporting?
Divide total vaccine administration hours by total clinical hours worked
True or False:
Clinic must maintain logs of influenza vaccines administered
False; must maintain logs of influenza AND pneumococcal
How should a vaccine log be submitted?
Electronically
Worksheet C, C-1 is for ____ RHCs to report settlement data
Independent
Worksheet M-3, M-5 is for ____ RHCs to report settlement data
Provider based
Why is it important to compare our provider statistical and reimbursement system report (PS&R) to our Medicare visit count?
We want to ensure that we do not overcount our visits because that will eat into our rate (cost/visits = rate)
Deductibles and coinsurance amounts uncollectible from Medicare beneficiaries after reasonable collection efforts
Medicare bad debt
Is uncollected deductibles/coinsurance from private pay patients (or other non-Medicare beneficiaries), Medicare Advantage or Part B, or non-RHC services considered to be Medicare bad debt?
No
Is charity, courtesy, or third-party payer allowances considered to be Medicare bad debt?
No
Is uncollected amounts due from other payers considered to be Medicare bad debt?
No
Are undisputed Medicare claims considered to be Medicare bad debt?
No
For debt to be considered an allowable Medicare bad debt, it must be related to ____ services and derived from ____ and ____ amounts
Covered
Deductible and coinsurance
For debt to be considered an allowable Medicare bad debt, the provider must establish that ____ collection efforts were made
Reasonable
For debt to be considered an allowable Medicare bad debt, the debt must actually be ____ when claimed to be worthless
Uncollectible
For debt to be considered an allowable Medicare bad debt, sound business judgment must establish that is no ____ of recovering the debt at any time in the future
Likelihood
It is required that the uncollectible Medicare deductible and coinsurance be charged off as ____ ____ in the accounting period when the bad debt is determined to be worthless
Bad debt
It is required that the uncollectible Medicare deductible and coinsurance be charged off as bad debs in the accounting period when what else happens?
The bad debt is determined to be worthless
A bad debt log is used for Medicare deductibles and coinsurance deemed ____ and written off the clinic’s books during the cost reporting period
Uncollectible
True or False:
A bad debt log will not contain dates of service that are prior to the current cost reporting period
False; it can, and most often does, contain dates of service prior to the current cost reporting period
True or False:
Medicare bad debts are based on the date of service, NOT the write off date.
False; based on write off date, not date of service
What are the two types of Medicare bad debt?
Indigent or medical indigent patients (patients that cannot pay)
Patients not deemed to be indigent (patients that could pay but won’t)
True or False:
An automatic indigence determination is made for Medicare/Medicaid dual-eligible beneficiaries
True
For indigent patients, you must bill ____ for proof of eligibility and apply any ____ payments, if applicable
Medicaid
True or False:
You do not need to have a processed state Medicaid remittance advice before allowing dual eligible bad debts
False; Must have a processed state Medicaid remittance advice before allowing dual eligible bad debts
True or False:
Indigence can be determined by the patient (i.e., is does not need to be determined by the provider)
False; indigence must be determined by the provider, not the patient. A patient’s signed declaration of his/her inability to pay his/her medical bills cannot be considered proof of indigence.
For indigent patients not eligible for Medicaid, you should take into account a patient’s total ____ which would include, but are not limited to, an analysis of assets (only those convertible to cash and unnecessary for the patient’s daily living), liabilities, and income and expenses.
Resources
True or False:
The same collection effort needs to be applied to any bill
True
What are some examples of reasonable collection efforts?
Collection letters, phone calls, collection agency, if also used for non-Medicare patients
If after reasonable and customary attempts to collect a bill, the debt remains unpaid more than ____ days from the date the first bill is mailed to the beneficiary, the debt may be billed uncollectible
120
If after reasonable and customary attempts to collect a bill, the debt remains unpaid more than 120 days from date the ____ is mailed to the beneficiary, the debt may be deemed uncollectible
First bill is mailed
What is the minimum number of days that can be used for the presumption of non-collectability?
120 days
True or False:
Medicare collections must follow the same timelines as all other payers
True
True or False:
Any payments received from the beneficiary doesn’t restart the 120 collectability timeframe.
False; any payments received from the beneficiary restarts the 120 collectability timeframe
The collection policy must be consistent among ____
All payer types
The collection policy must involve the first bill being issued within ____-____ days of the date of service
30-90
If you do not send a bill to a patient with 30-90 days of the date of service, what must you have?
A documented reason for not timely billing a patient
The collection policy must include ____, rather than a token, collection effort
Genuine
In addition to issuing a bill after a date of service, the collection policy should include efforts such as ____ billings, collection ____, telephone calls, or ____ contacts with this party
Subsequent, letters, personal
True or False:
If you use a collection agency, you should refer all uncollected patient charges of like amounts regardless of class of patient
True
True or False:
If you use a collection agency and it collects from the beneficiary, the full amount collected doesn’t need to be applied to the Medicare bad debt
False; if the collection agency collects from the beneficiary, the FULL AMOUNT collected must be applied to the Medicare bad debt
True or False:
Collection agency fees applicable to the collection of the debt can be recorded as an administrative expense on the clinic’s financial statements
True
Should you have a Medicare collection policy section within your collection policy?
No
Why shouldn’t you have a Medicare collection policy section within your collection policy?
This will indicate different treatment/procedures for the collection of Medicare bad debts and cause your bad debts to be disallowed at audit
Within the section of the collection policy that outlines the procedure for Medicare bad debt write off (consistent among all patient classes), include a section that exmaple how to complete the Medicare ____ ____ ____
Bad debt log
For indigent patients that are Medicaid daul-eligible, ____ remittance advice indicating payment or denial of payment should be retained as audit documentation
Medicaid
For indigent patients that are not Medicaid eligible, what is required as audit documentation?
Documentation of the method by which indigence was determined in addition to all backup information to substantiate the determination
For non-indigent patients, ____ efforts must be documented in the patient’s file (including copies of bills, documentation of phone calls/personal contact, and follow up letters) for audit documentation
Collection
Unrestricted grants and gifts ARE or ARE NOT deducted from operating costs
Are
Post October 1983, restricted grants are also not deducted from ____ costs
Operating
Are donated supplies or space an allowable cost?
No
To maximize revenue, you should update fee schedule on a ____ basis
Annual
To maximize revenue, ____ non-reimbursable costs
Minimize
To maximize revenue, reduce overhead attributable to ____ costs
Non-reimbursable
