Cost Report Audits, Auditors, Issues and Group Discussion

1. Cost Report Audits, Auditors, Issues and Group Discussion HFMA Southern California Education Session #3 February 21, 2013 Presented by - Judi Berry J. Berry Consulting Services, Inc.

2. Topics for Discussion • Wage Index • DSH • Bad Debts • S-10 • Medi-Cal • Other Items J. Berry Consulting Services, Inc.

3. Wage Index • Wage Index – Requesting Payroll register if submitted excel spreadsheet. Auditors were adjusting to payroll register and not taking accruals into consideration. • Wage Index - Sampling of Invoices – ask the auditors to do a sample rather than letting them ask for all of the invoices. • Timing of notifications and requested response times –many auditors are sending letters to the providers that are received after the requested due date. You need to contact them and get them to set a new date they need the information. J. Berry Consulting Services, Inc.

4. Wage Index • Wage Index – Hours for Contracted Services – Dietary & Cafeteria (success with some vendors to give this information. Purchased Services – auditors requesting contracts when hours are not on invoices. • Wage Index – S-3, IV will be required for a tentative settlement under T-4, but it was not required for filing on 11/30/2012. Original instructions and structure of form made it look like they wanted the benefits for contract labor, but what they want is actually the total contract labor for the whole facility in column 1, both allowable and non allowable, and in column 2 they want the benefits by category in this column J. Berry Consulting Services, Inc.

5. DSH • DSH SSI% - 2006 and some 2007 NPRs have been issued. CMS was holding the remaining NPRs while awaiting the Supreme Court Decision. They are now beginning to issue the 2008 and later NPRs. Be sure to appeal the SSI% to protect appeal rights. Can add to a group later. Appeal inclusion of Medicare Managed Care Days, Dual Eligible days, or accuracy of SSI data. • DSH Eligible Days – requests for UBs and RAs. Also requesting TARs – this is not needed for Code 1 patients, check audit workpapers carefully. J. Berry Consulting Services, Inc.

6. DSH • DSH – Filing of cost report – include the paid days and the estimated eligible days. This amount will be used in tentative settlement and also used for rates for Medicare Managed Care. Disclose in cover letter. • DSH – Reopenings – Be sure to request reopenings for any cost reports that were settled prior to the 13 month period for the hospital to get the eligible day information from the State. Also, you should file an appeal if you do not receive a notice of reopening within the 180 day timeframe. This may be important since we are changing to a new MAC, and things tend to get lost. J. Berry Consulting Services, Inc.

7. Bad Debts • Bad Debts – timeliness of billing, FCSO using arbitrary 60 days after payment by Medicare. This may not take into account other insurance, Medi-Cal eligibility, etc. • Bad Debts – timeliness of write-offs. FCSO will accept the Med-Cal RA date as write-off date, but must write-off the system. One month is OK, but 1 year is not. Some auditors disallowing anything over 30 days. Nothing in writing from FCSO, so it is auditor dependent. J. Berry Consulting Services, Inc.

8. Bad Debts • Bad Debts – 10% reduction in MCal payments for Inpatients for the period 10/1/2010 – 4/7/2011. Regulations state that if not part of State Plan, Medicare won’t pay. Need to appeal this. It will be a group appeal, but not until they issue NPRs for 2010. • Bad Debts – Share of Cost Computation • Originally FCSO used 2% of unpaid cross-overs based on testimony in late 90s. • Told by CMS they could not use the 2%, had to check each patient for SOC. • FCSO is accepting the Aide codes as methodology for determining potential share of cost. Some hospitals have SOC in their system. • Problems – SOC not a static amount, SOC on admission may not be SOC on discharge.Access to old records if looking after the fact can be a problem. • Bad Debts – Moratorium – eliminated for cost reports beginning after October 1, 2012. J. Berry Consulting Services, Inc.

9. S-10 • HIT reimbursement – Charity number used in calculation for Medicare payment. Also, now a level 1 error to not fill in S-10. • DSH Section 3133 – Uncompensated care amounts used for amount and share of allocation? Be sure to separate insured vs. uninsured charity. • Bad Debts – Medicare Bad Debts are deducted from the bad debt amount on S-10, so make sure you know if your GL bad debts are net or gross of Medicare. • Who will be auditing these amounts? J. Berry Consulting Services, Inc.

10. Medi-Cal and Other • Medi-Cal HIT reimbursement- Unlike Medicare, Medi-Cal used cost report and OSHPD data to calculate the incentive payments. They do not change based on future cost reports or OSHPD reports. Does anyone know if these amounts will be audited subsequent to the computation? • One auditor suggested that they may be auditing to insure that the HIT amounts you received from DHCS was actually used for HIT implementation. They say it is like auditing grant money. I disagreed with that saying it was an incentive, not a grant. Any thoughts? • Medi-Cal DRG simulated payment letter sent out 1/30/2013. No hospital will get less than 50% of what they were previously receiving. J. Berry Consulting Services, Inc.

11. Other • Other Items -Any updates on when we will transfer from FCSO (Palmetto GBA) to Noridian? • Revenue and Expense matching for CCR for outlier calculations. • Services between SNF and Residential – how to get correct data. J. Berry Consulting Services, Inc.