The annual Medicare cost report is one of the most important regulatory filings in healthcare. Given the broad and complex range of data required and its importance to hospital finances, CMS offers hospitals multiple opportunities to ensure they submit accurate information on the cost report. New information can be submitted by amending or reopening a previously submitted cost report.
How amendments and reopenings work
Amendments are submitted prior to finalization of a cost report and are allowed under the following circumstances:
- To correct material errors detected subsequent to the filing of the original cost report
- To comply with the health insurance policies or regulations
- To reflect the settlement of a contested liability
Most MACs accept amended information if it’s submitted before an audit starts. Some MACs accept amended information if an audit is in progress but not yet completed; very few MACs accept amended information after an audit has been completed. In these cases, MACs instruct the provider to request a reopening after the Notice of Program Reimbursement (NPR) has been issued.
A reopening changes the status of a cost report from finalized to open, allowing a hospital to submit new information. Accepting a reopening request is at the discretion of the MAC.
Changes in the MACs’ approach to reopenings: “New and material”
The criteria MACs use to evaluate reopening requests has become more stringent, resulting in more frequent denials. This is because certain MACs are requiring hospitals to provide information considered “new” evidence (not available at the time of original review) and “material” (typically a net payment over $10,000). The MAC reserves the right to deny the request if it’s determined the information does not meet these guidelines.
What this means for hospitals
A broadening adoption of these restrictions across MACs has consequences for hospitals seeking to increase reimbursements through a reopening. The process is now more complicated and more likely to fail. Hospitals can expect other forms of tightening requirements to also become apparent over time.
As reopenings become more difficult, hospitals must consider the following:
- Placing greater emphasis on ensuring the accuracy and optimization of initial filings.
- Quickly evaluating whether fiscal years reviewed for amendment with an open cost report are necessary — prior to having audits for these years begin.
What you can do to prepare
As MACs continue to place more stipulations on giving hospitals multiple opportunities to edit their cost report information, the pressure to get the information right the first time also increases.
Learn how TransUnion Healthcare’s market-leading cost report solution can help improve the quality of your cost report submissions in several areas, including Medicare Bad Debt, Medicare Disproportionate Share and Worksheet S-10.