The Centers for Medicare & Medicaid Services (CMS) issued Transmittal 18 affecting the CMS-2552-10 Hospital and Healthcare Complex Cost Report on Dec. 29, 2022. The transmittal includes several critical revisions and new requirements. It increased complex data requirements for:
These changes are effective for Medicare cost reporting periods beginning on or after Oct. 1, 2022. Hospitals that haven’t prepared will see reimbursement impacted considerably. This alert focuses on the items specific to the list above, but there a many other items that will require your organization’s attention.
Among other items, hospitals will now be required to prepare a supplemental schedule that will distinguish the general short-term acute care portion of your hospital from the rest of the hospital care complex. This schedule could be used in the future to calculate a hospital’s Factor 3 and result in some redistribution in payments.
What’s new
Transmittal 18 introduces new required templates, worksheets, and instructions.
Required template for Medicaid eligible days (exhibit 3A)
Providers will need Medicaid eligibility support for every patient included in the Medicare DSH calculation
and to identify the differences between restricted and unrestricted Medicaid state codes for every claimed day.
Following are some aspects of the new Exhibit 3A template.
Each record must now include:
Medicaid recipient identification number
State plan eligibility code number that correlates to the Medicaid eligible days reported
If patients are eligible for more than one code, this information needs to be reported in additional columns at the end of the exhibit.
Restricted or unrestricted Medicaid eligibility day
Every Medicaid recipient’s state plan code will need to be analyzed and identified within the template (Column eight) whether the program code is a restricted or unrestricted Medicaid eligible day. Restricted codes include pregnancy or labor and delivery services, emergency services, and the template provides up to seven more user-defined restricted Medicaid eligibility codes, where the definition of each code must then be provided in the template.
Changes around newborn and mother eligibility and reporting
The new template includes extremely detailed instructions on reporting newborn baby days and the separation of days after the mother’s discharge. Instructions also include reporting the mother’s eligibility information on the baby’s record in cases of presumptive eligibility. This information has never been requested in the past and will likely be a change in process for the hospital and difficult to compile.
Medicare eligibility
Medicare eligibility information must be included on the template for all applicable records.
New required templates for charity care and total bad debt amounts (exhibits 3B, 3C)
These new templates for claims from Worksheet S-10 Exhibit 3B & 3C include the following.
More demographic and payment data
There will be much more demographic and payment data — 21 columns for charity and 17 for bad debt — required for every claim. Capturing these data elements will create additional work for providers and their IT staff.
Charity and bad debt reconciliation
Each charity and total bad debt account will need to be reconciled from total charges less all payment activity tied to the claimed write-off. Special attention will be needed to not duplicate values between columns and to separate write-offs that can span multiple fiscal years.
Additional S-10 worksheet (Part I and Part II)
Part I is the uncompensated care for the entire hospital complex.
Part II is the inpatient and outpatient services billable under the hospital CMS certification number (CCN).
Additional information retrieved from IT will be needed to identify acute and non-acute units. CMS may intend to use only the Part II data in future UC calculations so providers should analyze the potential impact should this switch occur.
Charity discounts
Language has been added requiring charity discounts claimed on S-10 to be for medically necessary healthcare services. This will require identifying any discounts that aren’t eligible when compiling charity logs.
A new line — 25.01 — added to S-10 requires providers identify certain non-covered charity charges. This adds more complexity to already complex instructions.
New Medicare bad debt template (Exhibit 2A)
The new Exhibit 2A template requires additional data.
24 fields instead of 10
The new template has 24 required fields for each record, replacing the previous 10.
Fields now mandatory
These additional fields such as Medicaid remittance advice dates, sent to collection agency dates, and detailed information regarding recoveries and payments received prior to the write-off are now mandatory.
These additional fields may require multiple data pulls depending on the provider’s patient financial system and the information returned from the collection agencies.
Organizational impact and risks
Transmittal 18 will likely mean additional work for hospitals, as well as increased compliance and audit risks that could lead to potential redistribution of pool payments.
Workload increase
The level of detail required will create additional work for hospitals, and force adjustments to current reporting processes for providers that haven’t prepared for these changes. Coordination with hospital IT departments will be paramount to capture the required data elements. Special attention will also be needed to ensure that the compiled data is compliant with the new instructions.
Compliance considerations
Transmittal 18 introduces more compliance risk. Failing to do the required reporting will lead to cost report rejection.
Audit scrutiny
The level of audit scrutiny is likely to increase. Failing to report the required detail could lead to audit extrapolations and decreased reimbursement.
Because of this, hospitals mustn’t wait until it’s time to file a cost report to account for the new templates and required data.
