Medicaid and Medicare Nursing Home Cost Report Update · 2017-05-17 · Depreciation - Amount...
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May 17, 2017 Medicaid and Medicare Nursing Home Cost Report Update
Transcript of Medicaid and Medicare Nursing Home Cost Report Update · 2017-05-17 · Depreciation - Amount...
May 17, 2017
Medicaid and Medicare Nursing Home Cost Report Update
Disclaimer:
The material in this presentation, and presented during this webcast, is designed for, and intended to serve as an aid to, continuing professional education of CPA’s. Due to the certainty of continuous current developments in the profession affecting CPA’s, these materials are not appropriate to serve as the sole authority for any opinion or position relating to the subject matter. They must be supplemented with the authoritative source. Before making any decisions, or taking any action, you should consult the underlying authoritative guidance and if necessary, a qualified professional advisor. The presenters and Fust Charles Chamber LLP shall not be held responsible for any loss sustained by any person who relies on this material or presentation made by the presenters.
Copyright is not claimed in any material secured from official US government sources or the American Institute of Certified Public Accountants publications.
− Patrick Dooher, CPAPartner, Fust Charles Chambers LLP
Presenter:
P: (315) 446-3600
F: (315) 446-3899
Pat, the Firm’s long-term care industry leader, provides audit and advisory services to not-for-profit and healthcare organizations and, has been with the firm since 1985. He oversees a wide variety of audit engagements, including several of our large healthcare systems that operate nursing homes, assisted living facilities and their associated ERISA engagements.
In addition to delivering high level client service, Pat plays a primary role in staff recruiting, working closely with other key personnel on the recruiting committee to promote and attract talent to the firm. He is also actively involved in various campus and volunteering events throughout the community.
Pat is a board member of the Milton J. Rubenstein Museum of Science and Technology (MOST) and the CNY Jazz Foundation as well as a member of LeadingAge New York. He is also a member of the American Institute of Certified Public Accountants (AICPA), New York State Society of Certified Public Accountants (NYSSCPA), and the New York State Health Facilities Association(NYSHFA).
Pat is a graduate of LeMoyne College and resides in Syracuse, NY.
− Corinne English, CPASenior Manager, Fust Charles Chambers LLP
Presenter:
P: (315) 446-3600
F: (315) 446-3899
Corinne provides accounting, audit and advisory services to many of the Firm’s not-for-profit and healthcare clients, including long-term care clientele and provides long-term care consulting services to nursing homes, including cost report preparation services.
Corinne is a member of the Central New York Chapter of the Healthcare Financial Management Association, the American Institute of Certified Public Accountants (AICPA) and the New York State Society of Certified Public Accountants (NYSSCPA).
Corinne is the Treasurer of Meals on Wheels of Syracuse and serves on both the Finance Committee and Board of Directors.
Corinne is a graduate of St. John Fisher College and resides in Syracuse, NY
Medicaid Cost Report Reminders
What’s Changed on the 2016 RHCF-4 and RHCF-2
Take Note of These Items
Helpful Tips
Medicare Cost Report Reminders and Revisions
Agenda
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Medicaid Cost Report Reminders
2016 Medicaid RHCF-4 and RHCF-2 cost reports
Software is available on the Health Commerce System (https://commerce.health.state.ny.us/public/hcs_login.html)
Filing due date is July 3, 2017 (2 weeks earlier than last year)
No patches issued to date but we have heard that there is one forthcoming so check back to the HPN periodically
Failure to file on time will affect your quality points for determining quality pool quintile and result in a 2% decrease in your daily rate until submitted
Cost report filing and certifications from independent auditors and operators are due by this date
Acceleration to earlier date results in earlier 2018 Capital rates for preview and attestation (at least that’s what they are saying)
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Medicaid Cost Report Reminders
2016 Medicaid RHCF-4 and RHCF-2 cost reports
Related party financial statements-submissions must be in PDF and to the designated bureau
Bureau is [email protected]
Failure to file an electronic copy will result in an incomplete cost report submission
Change in auditor or operator- be sure to update certification information by completing forms issued with the DAL and submitting to the designated bureau as soon as possible.
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What’s Changed on the 2016 RHCF-4 and RHCF-2
With any changes, watch for appropriate edits
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Elements have been added to capture the costs for neurodegenerative specialty programs. The service can be added by selecting additional services for neurodegenerative under the configure menu
Take Note of These Items
Your Medicaid cost report can still impact your facilities Medicaid rate in some capacity. While some costs are aggregated into one overall statewide price, certain costs are still facility specific, such as your capital rate
Be mindful of the following Schedules and Exhibits that impact capital reimbursement
Schedule 8D, 9, 10, 11, 15, 17, Exhibit I (RHCF-4)
Part III – Related Company Capital Costs
Exhibit 11, Exhibit 18 & Exhibit 44 (RHCF-2 & ICR)
For those Medicaid managed care companies that are paying you the benchmark rate, getting reimbursed an accurate capital rate is important
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Take Note of These Items Capital Related Costs
Schedule 8D & 9 need your attention as these are key schedules for reimbursing your capital
Interest Expenses – Identify and capture separately interest by type (mortgage, working capital, or other).
Rentals – Capture all rentals - big or small. Has your accounts payable department coded rentals into supply accounts, when they are in fact rentals? (i.e. oxygen, event rentals, etc.)
Insurances – Need to be broken out separately (make sure that property, boiler, and auto are identified and not lumped in with GLPL and D&O insurances)
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Take Note of These Items Capital Related Costs
Schedule 9 Items to pay attention to, continued
Mortgage Insurance Premium
Real Estate Taxes
Depreciation - Amount reported should agree to Schedule 10 and Exhibit H, unless a separate Medicaid depreciation is used
Telephone Equipment Depreciation-favorite of OMIG auditors to disallow
Bad debts
Capital lease payments - Report depreciation and lease payments. Lease payments are reimbursed in capital rate.
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Take Note of These Items Capital Related Costs
Schedule 8D & 9 items to pay attention to, continued
Working Capital Interest (WCI) (Schedule 8/8D) –Schedule should be completed in its entirety with all pertinent information as to the lender, purpose of the loan, interest rate and the amount of interest paid. Instructions clearly indicate that you should not include any non-allowable interest expense (i.e. interest paid to a related party, interest paid to DOH for recovery determinations). WCI is reimbursed up to a regulatory threshold and is generally not reimbursed if the facility reports a profit for the year.
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Take Note of These Items Capital Related Costs
Schedule 8D & 9 items to pay attention to, continued
Complete Schedule 9 after the remainder of Part II is completed, as Schedule 9 must agree to numerous schedules in Part II including Schedules 10, 11, and 15.
Schedule 10 & 11 Items to pay attention to
Make sure that you retain your detailed fixed asset schedules and that they provide fixed asset detail by year with corresponding accumulated depreciation and depreciation by asset category. Amounts reported on Schedule 10 and 11 should agree to those detailed fixed asset schedules. Reconciling the asset categories from Schedule 10 and 11 to Balance Sheet Categories on Exhibit A ensures completeness and will assist when the OMIG auditors knock on your door.
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Take Note of These Items
Capital Related Costs
Schedule 10 & 11 Items to pay attention to
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Are you able to roll forward last years Schedule 10 and 11 to this years cost report schedule? Your IPA certifying the cost report should be checking that as part of their review.
Be sure that you can identify and document any differences from the audited financial statements and these schedules in the event that you maintain different depreciation and amortization schedules (MATP issues or costs higher than approved CON)
Certificate of Need (CON) - Require certified cost audits and DOH approval. Facilities with specific rate issues related to capital financing should be supported by a CON.
Take Note of These Items Capital Related Costs Schedule 15-Non-capitalized leased equipment information
items to pay attention to: Do not utilize cost centers 001 and 002 to report rentals, as
it will result in your facility not being reimbursed for the rental. The total amount by cost center should agree back to
amounts reported on Schedule 9 and Exhibit H. DOH will take whichever number is the lowest during the rate setting process if they do not agree. Have you captured the rentals in the appropriate cost
center? If you have a facility that is paid under separate rate sheets such as adult day care, traumatic brain injury, or others utilizing different rate settings, there could be cost centers with different tracebacks, which makes it critical that you report your costs in the appropriate cost center.
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Take Note of These Items
Capital Related Costs Schedule 17-Capital Cost Financing Items to pay attention to: Refinancing that has occurred during the year requires your
special attention. Make sure that you just do not carry forward last years information, but rather update and add a new schedule with line 001, column 236 indicating a 2= Approved Refinancing. Be alert that you may be over reimbursed in your cost report year if you are being paid interest under old debt structure. Need for appeal if underpaid or overpaid. If you refinanced, did you seek and receive approval in
advance. With the shared savings program approved for refinancings occurring after April 2015, additional reimbursement will be forthcoming. Will need to apply and will likely access program by filing a rate appeal and DOH envisions performing a preliminary shared savings calculation. If you have a variable rate mortgage, be sure to evaluate the
interest expense reported on Schedule 17 yearly. This would require an appeal to correct.
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Take Note of These Items Capital Related Costs
Schedule 17-Capital Cost Financing Items to pay attention to:
Complete the entire amortization schedule
Be sure to include mortgage insurance premiums on these schedules. Generally are provided by mortgage servicer by year for length of mortgage
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Take Note of These Items Capital Related Costs Exhibit I Recoveries Items to pay attention to:
Interest income offset-is your interest income categorized properly on both Exhibit I and Exhibit E-Statement of Revenues and Expenses? Unrestricted investment income should be reported on line 020 of this Exhibit.
Common Error
Do not report restricted investment income (i.e. income earned on sinking funds, replacement reserves required by HUD, funded depreciation or donor restricted investment income) on this Exhibit.
Unrestricted investment income is utilized to offset interest expense within the capital component of the Medicaid rate.
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Take Note of These Items
Capital Related Costs Part III Related Party Schedules to pay attention to:
Facilities that are provided capital related services (i.e. building or equipment leases) should make sure that they complete the schedules within these sections properly. Be sure to fill out the related company schedule 9, similar to the skilled nursing facility’s schedule 9.
Include all capital related costs (depreciation, rentals, etc).
The Facility is reimbursed their percentage of business with the related company of these costs.
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Take Note of These Items Capital Related Costs Exhibit 11, 18 & 44 (RHCF-2 & ICR) Items to pay attention
to:
Report all directly assigned capital costs on Exhibit 44.
Evaluate and be sure to report all capital costs on the capital cost lines (RHCF-2 lines 001 and 002).
If rentals are reported in other cost centers on the ICR, reclass them on Exhibit 12 to capital.
Working capital interest is typically included as part of administration and reported on Exhibit 18.
Ensure that all capital costs reported on Exhibit 11 flow to Exhibit 40.
Be sure to evaluate and review statistics on Exhibit 19 and 20, as they are utilized to allocate all costs (not just capital costs).
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Take Note of These Items
Non-Comparable Costs Medical Director’s Office
Volunteer Director
Hearing Therapy
Utilization Review (Be sure to report on Exhibit 18 of the ICR, if applicable)
Dental
Medicine Cabinet Drugs (Schedule 6 – RHCF-4 & Prescription Drug Schedule – RHCF – RHCF-2)
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Take Note of These Items Wage Equalization Factor (WEF) Related Schedules
Schedule 4/5/5A & Exhibit H (RHCF-4)
Direct Charge Salaries – RHCF Allocation of Expenses, Direct Charge Hours Paid, Exhibit 11, Exhibit 12, Exhibit 14, Exhibit 36 (RHCF-2 & ICR)
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Take Note of These Items Wage Equalization Factor Schedules, continued Schedule 4/Direct Charge Salaries Make sure that you report all RN, LPN and Aides salaries
properly. If there are individuals in the nursing administration line that provide direct patient care, the portion of direct patient care should be allocated to the RHCF line. Time studies should be utilized if you are allocating
salaries. For RHCF-2 filers, the salary costs associated with the
SNF, PT, OT and ST lines are included in the WEF calculation in its entirety. All therapists and therapy aides should be reported in
the Technical Specialists & Aides/Orderlies columns on Schedule 4. Including therapist time in management and supervision will result in that time not being included within the WEF calculation.
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Take Note of These Items Wage Equalization Factor Schedules, continued
Schedule 4/Direct Charge Salaries, continued
Benefit allocations
RHCF-4 filers - based on Exhibit H, WEF salaries to total salaries
Benefit allocations ICR and RHCF-2 filers -calculated by DOH utilizing the information reported in the ICR and RHCF-2.
Schedule 5/5A-Full Time Equivalents & Hours Paid
Are the hours reported appropriate for salaries reported on Schedule 4? Do a reasonableness of rate per hour to see if there are any outliers or unusually low rates that alert you to errors in your data.
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Take Note of These Items Wage Equalization Factor Schedules, continued Direct Charge Hours Paid/Exhibit 36 Hours for hospital based WEF calculations are derived from
the direct charge employees wage schedule in the RHCF-2 combined with an allocation of hours from Exhibit 36 of the ICR (for any areas not direct charge).
Exhibit H-Statement of Functional Expenses Are your fringe benefit costs being allocated properly to the
various cost centers based on the correlation of the cost to the salary position? Workers compensation-admin versus health care worker Pension costs Tuition reimbursement to healthcare worker versus
administrative Excluded departments or workers from certain types of
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Take Note of These Items
Quality Pool Schedules (RHCF-4 & RHCF-2) Schedule O (1) & O (2) Important to obtain this information early from contracted
providers. Recommend keeping track of this throughout the year. Make sure that you fill in the appropriate lines and
columns properly for only contracted staff of RNs, LPNs and Aides. Utilized to compare FTEs contracted to total SNF FTEs
reported on Schedule 5. Be alert to your percentage of contracted FTEs to employed FTEs as facilities with significant contracted staff will receive zero points in quality pool measure for that category.
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Take Note of These Items
Quality Pool Schedules (RHCF-4 & RHCF-2) Schedule O (2) requires facilities to fill out the number of per
diem employees, by cost center, as of the dates noted. Get HR to track this for you. Schedule P-Staff Turnover Expected to be utilized for possible quality pool measures
and factors into Advanced Training Initiative funding criteria. The schedule focuses on retention of staff. Make sure that you are reporting information properly in
the last three columns as it relates to retained employees, employees hired and employees fired. If reporting terminations, be sure they are employees who have left facility. How are you handling employees moving within a healthcare system?
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Helpful Tips Utilize information already prepared from your Medicare Cost Report
Get in the zone and ready to tackle the Medicaid Cost report:
Obtain a listing of all items you need and who will provide them.
Review prior year cost report, Exhibit H and Natural Class Groupings.
Review all allocations – including payroll and benefit allocations.
Where are those excel files from last year, copy and update those files.
Read the DAL and tackle some of the low lying fruit in preparing the cost report
Prefatory & configure data rarely changes from year to year. Any changes to schedules needed (i.e. Part III, Schedule 17/18) must be done in the configure screen.
Import from last year, when it makes sense
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Helpful Tips
If you haven’t already done so in the past, you can copy and paste from excel into the cost report software to avoid keying errors.
Provide individuals within finance and HR departments the cost report files and have them fill in the excel templates
Schedules that lend themselves to this type of process are listed below:
Part I - Statistics
Schedule 4/5/5A
Schedule 6
Schedule H
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Helpful Tips Fly through the preparation of the financial statement exhibits by utilizing
the final issued or draft financial statements. Be alert for those changes that the auditors require you to make each year and make those revisions Does your current assets and current liabilities totals agree to the
statements? Have you put in the total bad debt and contractual allowance number
on the balance sheet accurately?- common mistake If you utilize any “other” lines, be sure to type in a description. Be sure to enter the Lender information in the Capital Cost financing
Schedule Are you filling numbers in lines that are not appropriate because there
is not enough spaces on the balance sheet?-put in other and use notepad
For Exhibit E-are you placing the operating and non-operating revenues on the proper lines so that they mirror the placement in your financial statements?
For Exhibit B-if you have a restatement from prior year, are you utilizing the proper section of the Exhibit?
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Helpful Tips
Remember that certain benefits are only considered allowable costs if they are actually funded versus actuarial determined expenses. Do not include items such as minimum pension liabilities and other postemployment benefits if they are not funded on Exhibit H.
Utilize the general notepad as necessary
More information provided to NYSDOH can alleviate questions or issues that lead to possible future appeals
Renovation projects that came on line this year or repurposing of facility space should be a red flag that you need to brush off the square footage statistics that you have been carrying forward each year.
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Helpful Tips
If you continually have capital related errors in your rate sheets, review to see if there are reporting mistakes in past cost reports
Contact NYSDOH in advance to see what recommendations they can make
Utilize the notepad to make NYSDOH aware of past errors
Have you filed your formal capital appeal for those items that did not get corrected via email in 2016 for 2017 capital?
Have until June 2017 to file capital appeal via electronic system per DAL letter
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Medicare Cost Report Reminders
Before you begin your cost report, research whether you meet the criteria for a waiver for low utilization Skilled nursing facilities could be eligible to file a waiver for low
utilization if they meet the following criteria according to National Government Services (NGS) guidelines:
Less than 10% Medicare Utilization, or
Less than $200,000 in Medicare A + B net reimbursement
If NGS is not the intermediary for your Facility, these criteria will not apply. The Facility should contact their intermediary to determine if they can file such a waiver.
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Medicare Cost Report Reminders
Waiver for Low Utilization, continued If a facility decides to file a waiver for low utilization due by April 30th, the
facility is only required to submit the following:
Certification page (Worksheet S)
Applicable S-series worksheets (Worksheet S-3, Part 1)
Request for Waiver of Electronic Filing of Medicare Cost Report
Balance Sheet and Income Statement (you can use the worksheets from the cost report)
Get approval by filing a waiver request via email and retain letter received back from NGS
Paper filing of schedules to the address indicated on the letter
Make sure that the certification page contains an original signature.
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Medicare Cost Report Reminders
Due date of the cost report is within 5 months of the facilities fiscal year end.
Late filings will result in a 100% withhold of payments to the facility. Also, should the cost report be rejected, considered to not be filed.
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Medicare Cost Report Revisions
2016 Changes to CMS-2540-10 Additional Worksheets added for SNF Based Hospices
Worksheet S-8 Parts III and IV
Breaks out enrollment and contracted statistical data for periods after October 1, 2015
Worksheet O series
Breaks out costs, including overhead costs and allocation methods
Worksheet E, Part I
Added lines for Pioneer ACO Demonstration Payment adjustments
19 organizations participated in Pioneer ACO Model in 2015, with Montefiore ACO in NYC
Information comes directly from PS&R
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Medicare Cost Report Reminders
Important to Get Your PS&R reports in advance For those new to preparing the cost reports, need to be aware of the
website and instructions once logged into website
Requesting copy of PS&R through https://psr-ui.cms.hhs.gov
Must gain user access rights by obtaining IACS/EIDM (individuals authorized access to CMS/CMS 74+ Identify Management)
Must request reports through a request summary where you also set up the overall parameters
In order to ensure that you capture all of the charges submitted and paid, include “all paid dates available at time of report generation”
You have the ability to choose either a PDF or a CSV file. For those that must file a full Medicare cost report, utilizing the CSV file to upload directly into your Medicare software may be an option.
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Medicare Cost Report RemindersImportant Tips When Completing Cost Report Kill two birds with one stone and get all of the information
for both cost reports at the same time
Complete submission checklist and make sure that you have the ability to burn an electronic copy of cost report and support to the CD or prepare for upload to the NGSCONNEX system.
Need to be submitted by May 31, 2017, certified mail, return receipt to be safe.
There generally shouldn’t be any payment due if cost report is completed properly, with nothing reported on the settlement page-Worksheet S
When finalizing cost report, if you are including other information such as bad debt listings with PHI, password protect the CD and send email with password to NGS under separate email.
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Medicare Cost Report RemindersImportant Tips When Completing Cost Report, Continued Schedule S-3 Part I Medicare Days should match the Medicare Days
reported on the PS&R/S-7 and to Medicare Days reported on RHCF-4
Schedule S-3 Part II Total salaries should agree to Worksheet A and no other wage related costs
should be reported.
Worksheet A costs come directly from trial balance and should agree to the financial statements
Utilize Worksheet A-6 for reporting reclassifications to properly classify certain costs such as interest expense, property insurance, prescription drugs, medical supplies
Worksheet A-8 is utilized for reporting adjustments to expenses, including non-allowable expenses.
Utilize statistics to prepare Worksheet B series and consider any changes that may have occurred during the year such as square footage.
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Medicare Cost Report Reminders
Medicare Bad Debts submission with cost report
Have you determined if you have any Medicare bad debts for co-insurance and NAMI’s that can be submitted for payment?
For calendar year 2016, Medicare bad debts are reimbursable at 65% of dual eligible coinsurance balances written off.
CMS is proposing a reduction from 65% to 25% by 2020
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Any Questions?
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Thank You!
PATRICK DOOHER, CPA, PARTNER
CORINNE ENGLISH, CPA, SENIOR MANAGER
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