![\"\"](\"https:\/\/advantagehcconsulting.com\/blog\/wp-content\/uploads\/2018\/03\/Logo-2.jpg\"){kind=logo}
<\/p>\n<\/p>\n
Note this big change to reporting drug costs.<\/em><\/strong><\/span><\/p>\n Newly released hospice cost report revisions may mean more work for you, but should result in more accurate data that will be used for rate-setting and other purposes in the future.<\/p>\n In an April 13 transmittal, the\u00a0Centers for Medicare & Medicaid Services\u00a0<\/strong>lays out a series of changes that have been a long time coming, according to industry sources. Unlike with many Medicare requirement changes, the cost report revisions began with a group of CPAs and cost report preparers organized under the\u00a0National Association for Home Care & Hospice\u00a0<\/strong>asking CMS to improve the form, according to participants in the process.<\/p>\n \u201cWe didn\u2019t get everything we asked for, but we got a lot,\u201d says finance expert\u00a0Dave Macke\u00a0<\/strong>with\u00a0VonLehman & Co.\u00a0<\/strong>in Ft. Wright, Kentucky, who was involved in the process that began in June 2016.<\/p>\n \u201cIt was refreshing for CMS to listen to the industry\u2019s pleas for more guided compliance to the cost report completion,\u201d says\u00a0Mark Sharp\u00a0<\/strong>with\u00a0BKD\u00a0<\/strong>in Springfield, Missouri.<\/p>\n The problem:<\/span>\u00a0<\/strong>Hospices haven\u2019t put a lot of resources into submitting accurate cost reports, cost report experts say. There is no direct financial settlement tied to the report, and there is no incentive \u2014 or penalty \u2014 for hospices to put forth the effort to make sure their reports are as accurate as possible.<\/p>\n \u201cAs we complete the third year with the new freestanding hospice cost report, we see many hospices that have not adopted changes to their accounting and data collection systems to accommodate the filing requirements,\u201d observes industry veteran\u00a0Sandy McCleve\u00a0<\/strong>with\u00a0Advantage Healthcare Consultants\u00a0<\/strong>in Salt Lake City, Utah. \u201cComplete compliance is a burden to many hospices, which often results in a lack of effort for partial compliance. The CMS estimate of 188 hours to collect the data and properly prepare the hospice cost report is not reality.\u201d<\/p>\n By the way:<\/span>\u00a0<\/strong>\u201cCompliance with the home health agency-based hospice cost report \u2018O\u2019 series is more lacking, as these hospices are often smaller and function secondary to the HHA,\u201d McCleve adds.<\/p>\n While cost reports don\u2019t have an immediate financial impact for hospices, they can have tremendous influence for long-term reimbursement, Sharp points out. Expect to see CMS and\/or Congress use cost report data to adjust Medicare payment rates.<\/p>\n The\u00a0Medicare Payment Advisory Commission\u2019s\u00a0<\/strong>annual report to Congress notes hospices\u2019 average profit margin, and that figure comes directly from cost report data, Macke highlights. That figure is often influential in helping lawmakers pinpoint areas for cuts.<\/p>\n Another likely use for cost report data is rebalancing pay rates among care levels, Macke expects. In Worksheet C of the report, hospices report their per diem costs by care level \u2014 Routine Home Care, Continuous Home Care, Inpatient Respite Care, and General Inpatient Care.<\/p>\n Reports from MedPAC and others already have shown that reported costs for RHC are lower than Medicare payment rates, while costs for the other care levels are higher. Don\u2019t be surprised to see CMS run with that information and lower Routine Home Care rates while raising those for GIP and CHC, Macke predicts.<\/p>\n Level 1 Edits Comprise Biggest Change<\/strong><\/span><\/p>\n The solution:\u00a0<\/strong><\/span>In order to get better, more accurate data, the industry group asked CMS to make some changes. And nearly two years later, the agency has come through, implementing these revisions for cost reports covering years ending Dec. 31, 2017 and later:<\/p>\n Level 1 Edits.<\/span>\u00a0<\/strong>Previously, CMS would accept cost reports that contained no reported costs in vital areas in which every hospice must have costs.<\/p>\n Now, at the industry\u2019s request, CMS has implemented Level 1 edits for a number of cost report lines (see box, p. 125, for affected lines<\/em>). Medicare won\u2019t electronically accept reports that can\u2019t pass Level 1 edits.<\/p>\n \u201cThe intention of the new Level 1 edits is to force better compliance and quality of cost reports,\u201d Boyd says.<\/p>\n Initially, the edits and resulting requirement to fill out the affected lines may mean more work for hospices that haven\u2019t recorded their costs in such detail before, Sharp allows. But in the long run, hospices will benefit from the increased accuracy of the data reported.<\/p>\n Many hospices were previously \u201cdumping\u201d their costs into line 4 of Worksheet A \u2014 the category for \u201cAdministrative & General\u201d costs, Macke notes. Or they lumped costs together into other lines. Now they\u2019ll need to separate those out more carefully into the other areas that require Level 1 edits.<\/p>\n For example:<\/span>\u00a0<\/strong>For line 13, \u201cVolunteer Service Coordination,\u201d some hospices didn\u2019t report any costs, Macke relates. But every hospice is required to coordinate volunteers under Medicare. Instead, some providers would just report related costs under the category for the person doing the coordination \u2014 i.e., under the \u201cMedical Social Services\u201d line if the volunteer coordinator was a medical social worker spending part of her time on the task, Macke offers. Now hospices will have to separate out how much time the MSW spends on coordination and allocate the cost to line 13 accordingly.<\/p>\n Drug costs<\/span>.\u00a0<\/strong>In the old report\u2019s Worksheet A, hospices had line 14 in the \u201cGeneral Service Cost Center\u201d section to record drug costs. Now they can also use a new line, 42.50 \u201cDrugs Charged to Patients,\u201d in the \u201cDirect Patient Care Service Cost Centers\u201d section.<\/p>\n This change \u201cis significant for many reasons, including reporting costs where they should be reported and providing an opportunity for improving the accuracy of the cost report itself,\u201d NAHC notes in its member newsletter.<\/p>\n General costs such as pharmacy consultant fees, pharmacist salaries, etc., will go into line 14, while the direct drug costs recorded on claims will go into the new 42.50.<\/p>\n Tip:<\/span>\u00a0<\/strong>If you track drug costs by level of care, put them into 42.50, Macke advises. If you don\u2019t track the costs by level of care, put them in line 14.<\/p>\n Durable Medical Equipment<\/span>.\u00a0<\/strong>\u201cTransmittal 3 provides the ability to record DME costs, when appropriate, directly to inpatient respite care services (Worksheet A-3) and general inpatient costs (Worksheet A-4),\u201d NAHC explains. \u201cPreviously, these costs could not be reported directly to these levels of care.\u201d<\/p>\n No Inpatient Care.<\/span>\u00a0<\/strong>For hospices that don\u2019t furnish any GIP or Inpatient Respite care, they can record costs for \u201cPlant Operation & Maintenance\u201d (line 5 of Worksheet A) and \u201cHousekeeping\u201d (line 7) under the A&G line (line 4), Macke explains.<\/p>\n \u201cWhile not overly significant, it can simplify cost reports for smaller hospices without impacting the overall integrity of the cost report submission,\u201d NAHC notes.<\/p>\n Electronic signatures.<\/span>\u00a0<\/strong>CMS is implementing a new electronic signature option for cost reports for all provider types, not just hospices (see story, p. 126<\/em>).<\/p>\n June 1 Is Cut-Off Date<\/strong><\/span><\/p>\n The pharmacy changes, adding drugs charged to patients by level of care, \u201cis a needed improvement,\u201d Boyd judges. \u201cThe other changes are minor fixes.\u201d<\/p>\n Watch out:<\/span>\u00a0<\/strong>Don\u2019t give in to the temptation to give the changes short shrift. Some hospices may \u201cdiscover late the new requirements and have to hustle to comply, or choose to fudge the data simply to clear the edits,\u201d Boyd warns.<\/p>\n While Transmittal 3 and its changes are effective for cost report years ending Dec. 31, 2017 and later, hospices do have some wiggle room with implementing the new requirements.<\/p>\n Many cost reports for 2017 have already been submitted, NAHC notes. But CMS has told the trade group that any cost report created prior to June 1 using the old forms will be accepted, NAHC reports. After June 1, all cost reports must use the new form.<\/p>\n The catch:<\/span>\u00a0<\/strong>If you want to use the electronic signature option before June, you\u2019ll have to use the new form, CMS has also told NAHC.<\/p>\n Note: See the new form and instructions in Transmittal 3 at\u00a0www.cms.gov\/Regulations-and-Guidance\/Guidance\/Transmittals\/2018Downloads\/R3P243.pdf<\/a>.<\/em><\/p>\n Source- SuperCoder<\/span><\/i><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"