Cost Report Update – Transmittal 8
If you have not already been made aware, there is a new reporting requirement on your annual cost report. Department of Health and Human Service (DHHS)/Center for Medicare and Medicaid Services (CMS) issued Transmittal 8 on 29 June 2011 adding the following reporting requirement on Hospice Cost Report (Form CMS-1984-99) Worksheet S-1:
3807.4 Part IV — Inpatient general care data.
Line 19. — Enter in columns 1, 2, and 3, respectively, the costs of drugs, durable medical equipment/oxygen, and medical supplies that are related to inpatient general care. Report these costs in addition to and not in lieu of the costs that may already be reported on lines 10, 30, 31 and 35 of column 5 on worksheet A.
Translating the transmittal, whenever a patient's level of care is revenue code 0656, the cost of drugs, durable medical equipment, oxygen and medical supplies must be captured and reported in this new section. There exists no distinction as to where this level of care is performed: hospice operated facility, hospital or skilled nursing facility. The transmittal provides no guidance as to how to report these expenses when there is a contractual arrangement with a third party provider. Many of you have contracted with hospitals and skilled nursing facilities for the provision of these services. Unless it is stipulated within the contract, you are provided an itemized billing by the contract provider or you are privy to the third party's Medicare cost report; you do not have readily available information regarding the "costs" of these items with care is performed in other facilities. For those of you who provide this level of care in your own facility and you are using the MVI chart of accounts structure, you should have some of these costs already identified.
Another problem in reporting these costs is the change in level of care and billing of expenses. Often these costs are billed on a monthly basis. For example, a patient is issued a wheelchair to assist with mobility. The DME provider bills you on a monthly basis a flat fee for the wheel chair. When that patient is temporarily admitted to a facility in order to better manage his/her care, most do not split the DME cost into separate accounts tracking that part of the expense which occurred while the patient was receiving care under the inpatient revenue code. This issue is the same for drugs and supplies.
Well, we have identified some of the issues – how about solutions? When costs cannot be specifically associated with the level of care, you may want to use per diem costs calculations. For example, inpatient billing divided by total billing times medical supplies. This method assumes that a higher billing per diem is reflective of higher costs to provide care.
Is this reporting requirement going to save the government money? No, hospice is reimbursed per diem based on CMS defined amounts not associated with provider costs. Is this reporting requirement going to improvement the quality of patient care? No, just saddled us with an administrative reporting burden. Maybe this requirement is an attempt to swell the administrative staffs of hospices taking people off the unemployment register – you will almost need a person reviewing your patient management system for orders matching those with invoices and calculating and making entries in your general ledger tracking expenses by level of care.
By John Powell
