As most of you know, the new hospice cost report (Form 1984-14) was issued in the last half of 2014, and is required to be used for hospices with cost report years beginning on or after October 1, 2014. For most agencies, your first filing using the new forms will be in May 2016 for the 2015 calendar year.
What Does the New Cost Reporting Form Require?
The new cost reporting form requires several substantial changes in how you track and report costs:
1. New general ledger accounts (if applicable) will be required to separately identify the following costs:
- Nurse Practitioner
- Registered Nurses
- Nursing Administration
- Medical Records Costs
- Volunteer Service Coordination
- Physician Administrative Services
- Patient/Residential Care Services
- Contracted Palliative Radiation Therapy
- Contracted Palliative Chemotherapy
- Contracted Laundry and Linen Services
- Hospice/Palliative Care Fellows
- Palliative Care
- Thrift Store
2. All direct care costs must be separately tracked by level of service. This means that every direct care cost should be broken down by level of service. As an example, RN salaries will need to be both identified in a general ledger account as Registered Nursing Salaries and also broken down by the following levels of care:
- Continuous Care (New worksheet A-1)
- Routine Home Care (New Worksheet A-2)
- Inpatient Respite Care (New worksheet A-3)
- General Inpatient Care (New Worksheet A-4)
3. New cost centers have been identified for allocation (step down) to the levels of care (and other non-reimbursable departments). This means that you must identify costs related to these cost centers in enough detail so they can be grouped onto the cost report. The following cost centers will be stepped down to other cost centers:
- Capital related costs – buildings and fixtures
- Capital related costs – movable equipment
- Employee benefits department (new)
- Administrative and general costs
- Plant operations and maintenance
- Laundry and linen service (new)
- Housekeeping (new)
- Dietary (new)
- Nursing administration (new)
- Routine medical supplies (new)
- Medical records (new)
- Staff transportation (new)
- Volunteer service coordination (new)
- Pharmacy (new)
- Physician administrative services (new)
- Other general services (must specify) (new)
- Patient/residential care services (new)
4. There are some new non-reimbursable cost centers that may require you to separately account for costs. The specifically identified non-reimbursable cost centers are:
- Bereavement programs
- Volunteer programs
- Hospice/Palliative Medicine Fellows
- Palliative care program
- Other physician services
- Residential care
- Advertising (no longer just an expense account to be adjusted)
- Thrift store
- Nursing facility room and board
5. The statistics that are used to allocate expenses are also changing. Note the new allocation statistics below:
- Capital related costs: Buildings & Fixtures– Square footage
- Capital related costs: Moveable Equipment – Dollar value
- Employee benefits – Gross salaries
- Administrative and general costs – Accumulated costs
- Plant operations and maintenance – Square footage
- Laundry and linen service – In facility days
- Housekeeping – Square footage
- Dietary – In facility days
- Nursing administration – Direct nursing hours
- Routine medical supplies – Patient days
- Medical records – Patient days
- Staff transportation – Mileage
- Volunteer service coordination – Hours of service
- Pharmacy – Charges
- Physician administrative services – Patient days
- Other general services (must specify basis)
- Patient/residential care services – In facility days
What do you need to do?
There are number of things you need to consider:
1. Review your chart of accounts carefully – make sure you separate direct care costs by level of care (Continuous, Routine, Respite, Inpatient). This can be accomplished by creating separate accounts for each level of care, or by creating departments or classes within your accounting system for each direct care general ledger account.
2. Review your time keeping/payroll system to confirm all direct care staff are tracking hours by level of care (Continuous, Routine, Respite, Inpatient) to ensure that you will be able to record payroll appropriately.
3. Add accounts as necessary to separately account for items outlined above which are now lumped into other accounts. As an example, many agencies will need to expand their nursing direct care general ledger accounts to accommodate the new, more detailed reporting requirements.
4. Review each allocation statistic and make sure you are able to accumulate the information required for the new forms. If you believe you will be unable to accumulate the required statistics for any of the cost centers identified above, you should file a request to change the allocation statistic with your Medicare Administrative Contractor and request a different allocation statistic.
5. Prepare an accurate map of your office(s) and identify the functions that are occurring within each area/office.
As always we are here to help you, so please don’t hesitate to call with questions.
DISCLAIMER: This post contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link. Any advice or recommendations given is general and specific questions should be directed to professional counsel.