How worksheet s-10 impacts hospitals uncompensated care payments

Hospitals that qualify for the Medicare Disproportionate Share (DSH) hospital payment also qualify for uncompensated care (UC) supplemental payments based on their portion of UC costs reported on Medicare cost report Worksheet S-10.

It’s important for hospitals to pay attention and file these reports accurately, and in accordance with program instructions, to ensure they receive their rightful share of the UC pool. For federal fiscal year (FFY) 2020, the UC pool is approximately $8.35 billion, which will be shared among all qualifying hospitals. UC cost is defined as charity care and non-Medicare bad debt as reported on Worksheet S-10, Line 30.

The numbers you report on your Worksheet S-10 now determine your future payments. Hospitals must ensure their cost reports and associated forms are in compliance, or you could risk losing your fair share of future uncompensated care payments.

Adding to the growing nature of the use of UC costs data, certain states, such as Texas and New Mexico, are also using data reported on Worksheet S-10 for state UC program allocations. This   trend is expected to increase as additional state UC programs renew with the Centers for Medicare and Medicaid Services (CMS).

Below are more details on the importance of reporting, the additional audit scrutiny you should prepare to face, and steps to help you remain compliant.

Reasons reporting is critical

Current reporting of data affects the calculation of future UC pool distributions and therefore future payments.

Accurately reporting UC costs, as reported on the hospital cost report form CMS-2552-10, is critical from a regulatory and compliance standpoint and to protect a hospital’s fair share of the federal uncompensated care pool payments.

The uncompensated care pool

The UC pool formula is simple.

First, hospitals must qualify for Medicare DSH. There are roughly 2,430 hospitals at time of publication that participate in this pool.

Each specific hospital’s UC costs as reported on Worksheet S-10 and, according to its financial assistance policy or policies (FAPs), are compared to national UC costs for participating hospitals. The hospital receives funding based on its specific share of the national UC costs.

Therefore, developing and following policies, having systems in place to compile data, and compliantly reporting data are critical to a hospital’s ability to secure its share of the UC pool.