How to File a Medicare Cost Report

How to File a Medicare Cost Report

CMS and AHCA require Home Health Agencies (HHA), Hospice, Hospitals, and Renal Facilities to file an annual Medicare Cost Report and or Medicaid Cost Report.


Federal/State program administered through the State of Florida Agency for Health Care Administration (AHCA). Each provider participating in the Medicaid or Medicare program shall submit a uniform Medicaid Cost Report and or Medicare Cost Report and related documents required by the Florida Title XIX Long-Term Care Reimbursement Plan (Plan). For Medicaid Cost Report and or Medicare Cost Report periods ending on or after December 31, 2003, cost reports must be filed using “SEXTANT”, the October 2003 Electronic Cost Report (ECR); the October 2003 Chart of Accounts; and instructions provided by AHCA. Further, this Medicaid Cost Report and or Medicare Cost Report must be filed within the timeframe specified in the Plan. All required schedules MUST be completed or marked N/A. Note that Schedules I, J and J-2 are only required for providers on cost or payback reimbursement.

Limited amounts of supplemental supporting documentation can be added to the Notes Schedule provided within the ECR. Additional supporting documentation or attachments may be mailed to the address provided below. All additional information and documentation, whether on the Notes Schedule or mailed separately, must be referenced to the applicable cost report schedule.

The provider of the Medicaid Cost Report and or the Medicare Cost Report home office cost report must each stand-alone. Do not indicate, “see home office cost report” on any schedule in lieu of completing the schedule.

All schedules must be completed with all applicable information each year. Do not reference a prior year report as containing the information requested in lieu of completing the schedule in the current year cost report.

In addition to submitting the ECR as per the instructions in Appendix B, one hard copy of the cost report, the certification page, supplemental schedules and attachments, and accountant’s compilation reports must to be sent to:

Agency for Health Care Administration

Audit Services 2727 Mahan Drive, Mail Stop 21

Tallahassee, Florida 32308

The recognized Medicaid Cost Report Medicare Cost Report will be determined by utilizing the accrual method of accounting in accordance with generally accepted accounting principles (GAAP) as established by the American Institute of Certified Public Accountants (AICPA), the methods of reimbursement in accordance with Medicare (Title XVIII) Principles of Cost Reimbursement, the Centers for Medicare and Medicaid Services Provider Reimbursement Manual (CMS Pub. 15-1) except as modified by the Florida Title XIX Long-Term Care Reimbursement Plan, and State of Florida Administrative Code.


The input worksheet is where the bulk of the cost report data will be entered. Enter text using proper case; please do not use all capital letters. Enter whole numbers only unless the input number is a percentage. Enter a percentage in decimal form (i.e. input .047635 for 4.7635%). Debits are entered as positive numbers and credits are entered as negative numbers unless otherwise specified.

Patient days input fields cannot be left blank; these include In-House Patient Days; Reserved Bed Days; Holding Bed Days; and Skilled, Intermediate I, and Intermediate II Medicaid Days. When appropriate it is required that zero be entered.

Other input worksheets that require the input of data are designated with a “(W)” on the worksheet tab (such as, Cover (W), B (W), K (W) or L (W), etc). “See attached” is not considered valid for Electronic Cost Reporting purposes.

Input areas have cells with a light yellow background. When a choice is required, a brown background is used with a dropdown box. Clicking on the arrow to the right of the dropdown box allows for an appropriate selection to be made. (Appropriate selections must be made from the dropdown box to avoid a validation error).

When data is entered on the input worksheet, the appropriate schedule changes can be reviewed by clicking on the schedule tab. Many schedules have validity checks built into the system. In some instances, an error message may appear on the applicable schedule to the right side of the row being checked. In other circumstances, validation checks are a part of the applicable schedule.

When data input is completed for the entire Cost Report, the “VALIDATE” tab should be referenced to locate any remaining exceptions noted. Sextant currently checks for more than 190 different potential exceptions to the Medicaid Cost Report or Medicare Cost Report.

Certification Page:

The Provider may use the “optional Medicaid Cost Report or Medicare Cost Report identifier” for internal tracking purposes. If the cost report is prepared in house choose “yes” in the dropdown box; otherwise, choose “no” in the dropdown box.

Enter the name of CPA (or CPA firm) responsible for preparation of the cost report.

Enter the CPA (or CPA firm) license number. If not a Florida CPA identify the state of licensure.

Please contact us for a complete how to guide on how to prepare a Medicaid Cost Report or Medicaid Cost Report



Miami Home Healthcare Accountants Bad Debt Recovery

Miami Home Healthcare Accountants Bad Debt Recovery

Miami Home Healthcare Accountants Gustavo A Viera CPA we’re concerned as the economic recession continues and with the rise in unemployment, Home Healthcare Accountants must deal with accelerated growth in bad debts in addition to the myriad of other financial and operating challenges presented during the downturn. Home Health Agency Accountants understand that while all bad debts cannot be recovered, 70% of allowable Medicare bad debt claims, including Medicaid cross-over balances, can be salvaged through the filing of a Medicare Cost Report.

CMS Home Healthcare Accountants define allowable bad debt in Provider Reimbursement Manual, Part I, Section 308 as debt that meets the following criteria:

The bad debt must be related to covered services and derived from deductible and coinsurance amounts.

  • The provider must establish that reasonable collection efforts were made.
  • The debt was actually worthless at the time of write-off.
  • There is no likelihood of recovery of the debt in the future.

Recent CMS Home Healthcare Accountants rulings provide some clarification regarding these criteria.  If the services of the Home Healthcare Accountants or clearing house are used by a facility, those bad debt claims must be returned to the facility and collection efforts discontinued before the debt is deemed “worthless”.  The Home Healthcare Accountants rulings also suggest that Home Healthcare Accountants Firms or clearing houses must treat Medicare Cost Report claims in a similar manner.

To mitigate any potential adjustments or reductions in Home Healthcare Accountants Medicare reimbursement during the annual audit of the Medicare Cost Report, Home Health Agencies Accountants should take the time beforehand to carefully review and analyze their bad debt logs. If you have any questions or concerns about your bad debt listings and would like more information on VieraCPA Home Health Agency Accountants bad debt review services, please call us.

As the largest operating division of HHS, the Centers for Medicare and Medicaid Services (“CMS”) undergoes multiple scheduled program reviews by the OIG.  As such, the Work Plan outlines the following areas of CMS evaluation:

  • Hospital Capital Payments – The OIG will evaluate Medicare reimbursement to hospitals for capital expenditures (facilities and equipment) for appropriateness.
  • Hospital Wage Data – Hospitals will be evaluated on the accuracy of wage data reported to CMS.  Specifically, because the wage data reported is used to calculate wage indices for the Inpatient Prospective Payment System (“IPPS”), appropriate representation of this data remains critical.
  • Critical Access Hospitals – The OIG will analyze payments made to Critical Access Hospitals; and, hospitals will additionally be evaluated on their ability to meet the criteria which defines a critical access hospital.
  • Medicare Disproportionate Share Payments – OIG will (i) evaluate Medicare disproportionate share payments made to qualifying hospitals and (ii) analyze the total amount of uncompensated care at these hospitals.
  • Hospital Readmissions – The OIG plans to assess trends related to hospital readmissions.  Specifically, oversight in same-day readmissions will be critically reviewed.
  • Diagnostic Imaging – According to CMS, increased use of diagnostic imaging services has proliferated during recent years.  As such, evaluations on potential overuse and service costs will be conducted.
  • Unbundled Laboratory Tests – The OIG plans to assess clinical laboratories which have unbundled laboratory tests to increase Medicare payments.  Specifically, the extent of this inappropriate unbundling will be evaluated by analyzing claims data.
  • Physician Reassignment of Benefits – Pursuant to the Social Security Act, physicians are not allowed to reassign Medicare beneficiaries except in the case of a specific exception. As such, the OIG will analyze reviews of such reassignments.  In addition, an examination of physicians’ awareness of these reassignments will reveal the extent of these occurrences.
  • Physician Identifier Number – The OIG plans to review Medicaid claims associated with invalid or inactive Physician Identifier Numbers; primarily, numbers used on claims after a physician’s death.
  • Managed Care Organizations (“MCO”) – MCO’s will be evaluated based on Federal standards regarding fraud and abuse safeguards and marketing practices.
  • Provider-Based Status – OIG plans to compile cost reports for hospitals claiming provider-based status for both inpatient and outpatient facilities.  Based upon such reports, it will then identify hospitals improperly claiming provider-based status for facilities.
  • Physician Hospice Billing – Based upon the standard that physicians should receive payments for hospice services solely under the Medicare Part B Physician Fee Schedule, the OIG will conduct reviews to identify whether physicians are double-billed (under Medicare parts A and B) for such services.

Physician Self-Referral for Durable Medical Equipment – OIG will conduct analyses to review the legality of physician referrals to durable medical equipment suppliers in which the physician holds ownership.

Given the aforementioned items, Home Health Agency Healthcare Accountants and physicians should assess both operational and financial relationship matters in order to ensure proper compliance moving forward into 2010.


Healthcare Accounting & Medicare Cost Report

Healthcare Accounting & Medicare Cost Report

Within the last 25 years our Healthcare Accounting Service in Miami have prepared hundreds of Medicare Cost Report and our commitment to Healthcare Accounting Service has grown stronger as the financial changes have forced the healthcare industry to look past their primary objective, that of providing care, to that of earning a living.

Our Healthcare Accounting Service abilities will aid the preparation of a tax return and especially Medicare Cost Report. Tax & Medicare laws are complicated and filled using exceptions to every regulation. Most clients do not know if the return is wrong and right, and it may well not matter since defending an audit, even if you are 100% correct, can cost you thousands of dollars. In many cases, different Healthcare Accounting Service will discover things differently and get different conclusions good facts of your go back. The most important thing is that you understand what is on the return. The IRS & MEDICARE get increased the fines and penalties for return errors plus its becoming increasingly more complicated to arrange a return or Medicare Cost Report.

We’ve had clients who prepare their own Medicare Cost Report, come to him after the Medicare has suspended billing during a review.

Healthcare Accounting Service

Our Healthcare Accounting Service are precisely that – healthcare accountants. With Gustavo A Viera CPA you will be assured that your Medicare Cost Report company has significant, relevant experience with healthcare providers like you. Your Healthcare Accounting Service team will involve individuals who spend virtually all of their professional time serving that healthcare industry – not necessarily manufacturing, retail or some other industries.

Viera provides audit and Healthcare Accounting to healthcare entities ranging in dimensions from small physician practices and ancillary providers to help multi-state integrated healthcare organizations with assets for longer than $1 billion. This experience across the spectrum of healthcare enables Healthcare Accounting Service to quickly identify the financial reporting areas of greatest risk to your small business and to more efficiently and effectively perform audit or accounting services. Further, our Healthcare Accounting Service teams are structured providing our senior executives more hours with our clients so as to provide the hands on encounter and oversight.

The following can be a partial listing of the categories of audit and Healthcare Accounting solutions Gustavo A Viera CPA offers our clients:

· Audits, feedback, and compilations of fiscal statements

· Audits in acquiescence with Government Auditing Principles and OMB Circular A-133

· Internal control reviews and risk assessments

· Impairment testing of intangible possessions

· Agreed-upon procedure reports together with special reporting

· Transaction accounting assistance, including allocation of final cost

· New accounting standard setup

· Outsourcing of inside audit functions

· Accounting insurance coverage and procedure manual advancement

As Healthcare Accounting Service dedicated to serving the healthcare market (over 75% of our revenues are healthcare related), we have available that resources to supplement the extensive knowledge of our Healthcare Accounting Service through the use of our dedicated reimbursement, scientific and healthcare tax sections. Our relationships with loaning institutions, bond underwriters and rating agencies are in a way that Viera is a nationally recognized Healthcare Accounting Service in connection with debt issues.

Our Medicare Cost Report consults practices and healthcare related small businesses at every stage with the business cycle across that spectrum of medical areas and allied fields. We help you to increase income, reduce costs and increase client/patient satisfaction.


Medicare Cost Report Payments for Meaningful Use of Electronic Health Records

Medicare Cost Report Payments for Meaningful Use of Electronic Health Records

The American Recovery and Reinvestment Act of 2009 (ARRA) established incentive payments under the Medicare Cost Report programs for certain professionals and hospitals that “meaningfully use” certified electronic health record (EHR) technology. These provisions of ARRA , together with certain of its other provisions, are referred to as the Health Information Technology for Economic and Clinical Health (HITECH) Act. The HITECH Act’s overall public policy goal is “to pro- mote the adoption and meaningful use of interoperable health information technology and qualified electronic health records (EHRs).” The government’s ultimate goal is to promote more effective (quality) and efficient healthcare delivery through the use of technology—reducing the total cost of Medicare Cost Report care for all Americans and using the savings to expand access to the healthcare system.

ARRA set aside $19 billion for making incentive payments to hospitals and physicians that implement and meaningfully use EHR technology by 2014. Incentive payments will be paid out over four years on a transitional schedule. To qualify for incentives under the HITECH Act, hospitals and physicians must meet EHR “meaningful use” criteria. The Centers for Medicare Cost Report (CMS) chose to take a phased approach to defining meaningful use (through three stages), using cri- teria that become more stringent over time.

Generally, it appears that short-term acute care IPPS hospitals3 receiving Medicare Cost Report payments have accounted for them using either a contingency model or an IAS 20 grant accounting model. Although the Securities and Exchange Commission (SEC) had not issued any formal views on EHR income recognition at the time this paper was published, preliminary indications are that SEC registrant hospitals are applying a contingency model. Other hospitals—i.e., those that are privately-held, not-for-profit, or governmental—appear to be choosing between the two models as a matter of accounting policy. If an SEC registrant chooses to apply any model other than a gain contingency model, consultation with the SEC staff is strongly recommended.

The remainder of this Medicare Cost Report position paper discusses accounting for the incentive payments under the two accounting models. Because the SEC has not yet issued any views on the specific requirements associated with the contingency model, the primary emphasis of this paper is on the grant accounting model.

1. See the July 28, 2010, Federal Register (starting on page 44314) for the final rule issued by the Department of Health and Human Services, Centers for Medicare & Medicaid Services, that implements the applicable provisions of ARRA.

2. Federal Register, p. 44316.

3. This is referring to “subsection (d) hospitals” in section 1886(d)(1)(B) of the Social Security Act that are paid under the hospital inpatient prospective payment system (IPPS) and are located in one of the 50 states or the District of Columbia.

Medicare Cost Report P&P Board Issue Analyses

The Healthcare Financial Management Association through its Principles and Practices (P&P) Board publishes issue analyses to pro- vide short-term practical assistance on emerging issues in healthcare financial management. To expedite information to the industry, issues analyses are not sent out for public comment. Therefore, they are factual, but not authoritative. The purpose of this issue analysis is to provide some clarity to the healthcare industry on certain accounting and reporting issues resulting from incentive payments under the Medicare program for the meaningful use of electronic health record (EHR) technology. Consultation on these matters with independent auditors is highly recommended. Also, Security and Exchange Commission registrants that are contemplating use of a method other than the contingency model are encouraged to consider pre-clearing their views with the SEC staff.

Medicare Cost Report Payments for Meaningful Use of Electronic Health Records.

Note: Because this is an area where accounting practices are just starting to emerge, entities are strongly encouraged to discuss ac- counting for the incentive payments with their independent auditors as soon as possible. In addition, SEC registrants that are contemplating use of a method other than the contingency model are encouraged to consider pre-clearing their views with the SEC staff.


This Medicare Cost Report paper focuses on accounting for the Medicare EHR incentive payments to acute-care inpatient hospitals that are paid under the IPPS. The provisions of the incentive program are applied differently to critical access hospitals (CAHs) and eligible professionals (EPs); however, read in conjunction with the rules applicable to those types of providers, the concepts discussed in this position paper may be useful in determining the appropriate accounting in those situations as well. The concepts discussed in this position paper may also be helpful in determining the appropriate accounting for incentive payments received under state Medicaid programs, which are similar in some ways to the Medicare Cost Report program.

Overview of Accounting Models

Contingency Model

A key consideration in applying the contingency model is appropriately identifying the contingencies that must be satisfied prior to recognizing the revenue. When EHR incentive payments are viewed within the context of a contingency model, one contingency involves the fact that receipt of an incentive payment occurs only if the hospital is successful in complying with the meaningful use criteria during the entire EHR reporting period (90 consecutive days in the first payment year and 365 consecutive days during each of the second through fourth payment years). The contingency model would not permit income from incentive payments to be recognized until the hospital has actually complied with the meaningful use criteria for the full EHR reporting period in a given year. For example, if in the first payment year the hospital successfully complied with the criteria during days 1 through 89 but failed to comply on day 90, the entire incentive payment for that year would be forfeited. How- ever, if compliance was maintained for the entire 90 day period, income could be recognized on the 90th day if the discharge condition noted below is also met as of that day. It would not be appropriate under a contingency model to consider the proba- bility of complying with the requirements when considering when to recognize income from the incentive program.

Medicare Cost Report Payments for Meaningful Use of Electronic Health Records

Another potential contingency relates to the discharges upon which the final incentive payment is based. As discussed in Appendix B of this paper, Medicare’s incentive payments are based on a formula which utilizes discharges occurring during a hospital’s cost report year4 that begins in the EHR reporting period (see Figure 1). The EHR reporting period is based on the federal fiscal year, which runs from October 1 through September 30. Therefore, unless an entity’s fiscal year coincides with the federal fiscal year, a portion of the discharges used in the payment calculation will occur after the EHR reporting period ends. Because the actual numbers of Medicare discharges and total discharges will typically not be known until the hospital’s fiscal year has ended, under a contingent gain model, these amounts would likely be considered an uncertainty that must be resolved prior to recognition of income. Similar considerations may apply to the total charges, charity care charges, and patient days used in the final incentive payment calculation. It is therefore expected that hospitals using the contingency model would typically not meet the contingency for discharge and other final payment calculation data until the last day of the cost report year.

Under the contingency model, the income from the incentive payments would be recorded entirely in the period in which the last remaining contingency is resolved (see Figure 2). Thus, the cash received or receivable from an incentive payment would be recognized as income entirely in a single quarter (i.e., the last quarter of the fiscal year end that is used in the incentive payment calculation).

Submission of the cost report and its subsequent desk review or audit by CMS would not likely be viewed as contingent events that must occur prior to the recognition of income.


Business Trends

Medicare Cost Reports

Medicare Cost Reports Gustavo Viera Miami CPA has been providing Medicare Cost Reports and accounting and tax services to Home Healthcare


Medicare Cost Report Preparation Strategies

Medicare Cost Report Preparation Strategies

Our Medicare Cost Report Preparation, Reimbursement & Cost Report Services Strategies for enhanced reimbursement. With the increasing pressure on hospital margins, it is imperative that providers obtain accurate reimbursement from Medicare and Medicaid as well as other third-party payors in order to file an accurate Medicare Cost Report.

You can benefit from our experience with Medicare Cost Report Preparation since the inception of Medicare for hospitals and health systems of all sizes and types, including critical access hospitals (CAHs). We have a team dedicated to Medicare Cost Report Preparation and defending them through reviews and appeals. Our Medicare Cost Report Preparation team keeps up with changes in Medicare Cost Reports and requirements to better serve you and includes members who have hands-on experience with reimbursement issues on both sides – Medicare and hospitals.

We have helped numerous clients increase their reimbursement by assisting them with conversion to special Medicare status such as sole community provider, regional referral center, and critical access hospital.

We’ve also assisted them with various Medicare prospective payment systems (PPS) reimbursement issues such as:

  • Wage index analysis
  • Disproportionate Share Hospital (DSH)
  • Medicare bad debt optimization

For academic medical centers, we’ve assisted in proper reporting for post acute transfer issues, graduate medical education (GME), independent medical examiners (IME), and organ transplant costs. On behalf of hospitals and health systems, VieraCPA also has negotiated with various third-party payors including state Medicaid programs.

As part of our Medicare Cost Reports preparation service, we provide a summary of observations and recommendations about the data provided for the cost report as well as opportunities to enhance reimbursement in the future. We’ll help you interpret the results of your Medicare Cost Reports so you know if you make or lose money on individual service lines.

State Statutes require applicants to show anticipated provider revenue and expenditures, the basis for financing anticipated cash-flow requirements of the provider, and an applicant’s access to contingency financing. All schedules must be prepared in accordance with generally accepted accounting principles (GAAP). CPA Firms must compile, examine, or apply agreed-upon procedures to prospective financial statements, including summaries of significant assumptions and accounting policies. An applicant will have demonstrated Proof of Financial Ability to Operate by completing schedules 1-7 in conformity with the below instructions and GAAP, all relevant rules and statutes, and projections that show assets, credit, and projected revenues meet or exceed projected liabilities and expenses and Independent evidence of sufficient funds for starting a Home Health Care Agency, working capital & contingencies.


Proof of Financial Ability to Operate

Healthcare Accounting Specialist Explains Proof of Financial Ability to Operate

As you may know, part of the process to complete the Health Care Licensing Application, the Florida Agency for Health Care Administration (AHCA) and the Florida Statutes requires that each applicant to establish AHCA Proof of Financial Ability to Operate and to show per Healthcare accounting requirements the anticipated provider revenue and expenditures, the basis for financing anticipated cash-flow requirements of the provider, and an applicant’s access to contingency financing. To establish AHCA proof of financial ability to operate, information is provided in detailed forms and schedules which include the monthly projected summary of revenue and expenses, the monthly projected cash flow statements for 24 months and the two annual balance sheets and detailed footnotes that include summaries of significant assumptions, accounting policies and other informative disclosures as required by Generally Accepted Accounting Principles (GAAP). Typical Excel based spreadsheets may be cumbersome to design for this purpose.  Because of the special requirements to produce monthly income statements and cash flows for 24 months, customized projection software is needed to meet the reporting requirements. Subsequent to approval, certain Medicare providers will have to file an annual Medicare Cost Reports.

To show AHCA proof of financial ability to operate per Healthcare accounting requirements the forms and schedules must accompany any initial or change of ownership (CHOW) application for the following types of health care providers.

•  Adult Day Care Centers

•  Assisted Living Facilities

•  Health Care Clinics

•  Home Health Agencies

•  Home Medical Equipment

•  Hospice

•  Intermediate Care Facilities for the Developmentally Disabled

•  Prescribed Pediatric Extended Care Center

•  Skilled Nursing Facilities

All schedules must be prepared in accordance with generally accepted accounting principles (GAAP). A Certified Public Accountant (CPA) must compile, examine, or apply agreed-upon procedures to prospective financial statements, including summaries of significant assumptions and Healthcare accounting policies. Such a requirement is usually not required for the annual Medicare Cost Reports

To establish AHCA proof of financial ability to operate each applicant can select the type of financial statement to be given to the Provider.  As mentioned above, the three choices are :

1.  Compiled

2.  Agreed-upon procedures

3.  Examined

To establish AHCA proof of financial ability to operate and to learn more about your financial statement options and Healthcare accounting requirements:

Before you select the level of service from the CPA , the following will serve as a brief analysis of each option.

1.  Compile – A compilation engagement is the lowest level of service that an accountant can perform on prospective financial presentations that is intended for third parties. Despite it being the lowest level of service, it is a very common deliverable provided by a CPA and often a cost effective solution for many companies, when required or accepted by third parties and acceptable healthcare accounting practices utilized. Compilation procedures includes assembling, to the extent necessary, the prospective financial information based on the responsible party’s assumptions. Performing the required compilation procedures, including reading the prospective financial statements with their summaries of significant assumptions and healthcare accounting policies, and considering whether the prospective financial statements appear to be (1) presented in conformity with American Institute of Certified Public Accountants(AICPA) guidelines and (2) not obviously inappropriate. The compilation procedures are not performed for the purpose of providing any assurance on the presentation or on the underlying assumptions. The accountant may prepare the financial statements or then reads them when they are prepared by the Company’s management  to make sure that they appear appropriate in form and content. Because the accountant does not perform any other procedures, the accountant does not obtain any assurance that the financial statements are free of material misstatement. A compilation report is issued by the CPA.

2.  Agreed-upon procedures – With an agreed-upon procedures engagement the accountant is engaged by a client to perform specific procedures and report findings. The accountant does not perform an examination or provide an opinion. Rather, the accountant reports only procedures and findings. In this type of an engagement, the accountant performs whatever procedures the users of the prospective statements specify. It is a flexible form of engagement; the procedures may be as extensive or cursory as the specified parties want, but should include more than a mere reading of the prospective financial statements. The service may be lower than a compilation, between a compilation and an examination, or as high as an examination.

3.  Examined – An examination engagement is a professional service that involves extensive corroborative procedures, resulting in the CPA’s expression of positive assurance about the presentation and the underlying assumptions. It is similar to an audit of historical financial statements and is the highest level of service that CPA’s can provide on prospective financial statements. The examination involves (a) evaluating the preparation of the prospective financial statements,(b) evaluating the support underlying the assumptions,(c) evaluating the presentation of the prospective financial statements for conformity with AICPA presentation guidelines, and (d) issuing an examination report.

Some additional insight factors to consider when choosing the levels of service

In an examination engagement an opinion is given by the CPA and it states that (i) the prospective financial statements are presented in conformity with AICPA guidelines and (ii) the assumptions provide a reasonable basis for the responsible party’s projection, the assumptions provide a reasonable basis for the responsible party’s projection given the hypothetical assumptions. Because an examination is an extensive service, it is more expensive to provide than the other two alternatives. Examinations are typically performed when the prospective presentation is associated with a decision involving a large amount of money or when a regulatory agency (such as a securities commission or health care authority) requires it.

Notwithstanding the statutory requirement for either a compilation, or agreed-upon procedures or examination to establish the AHCA proof of financial ability to operate, you may want to consult with your counsel and the healthcare accounting authority before hiring the accountant to prepare the Florida AHCA Proof of Financial Ability application.

We can help you with …..

•Due diligence on acquisitions of Home Health Agencies  that are  primarily Medicare based.

•To provide the AHCA proof of financial ability to operate, we can assist  you with the Florida AHCA Proof of Financial Ability application including assistance with compiled prospective(projected) financial statements that are required to be completed by a Certified Public Accountant for Home Health Agencies that are primarily Medicare based. We have developed specialized projection software that was customized to meet the AHCA requirement(s) for a Medicare based Home Health Agency that shows the monthly projected summary of revenue and expenses and the monthly projected cash flow statements for 24 months and the two annual balance sheets.

•Setting up accounting systems with QuickBooks and related training after obtaining your license from the State of Florida.

We have prepared dozens of projections  over the years in various industries and recently successfully assisted a Medicare based Home Health Agency and HME   in completing and filing a AHCA proof of financial ability to operate (CHOW) and to attain a license from The Florida Agency for Healthcare Administration (AHCA) by completion of the  Proof of Financial Ability To Operate application, which included preparation of the projections, forms and schedules referred to above and communication with the AHCA reviewer.


ZPIC Audits- Do I need a CPA?

ZPIC Audits- Do I need a CPA?

It depends? If your CPA a Medicare Cost Report expert? If the answer is yes, he or she probably prepared your annual Medicare Cost Report or Medicaid Cost Report and getting them involved as as soon as possible is a good idea during ZPIC Audits.Wow what a feeling!!

I have talked to potential clients as they are actually having chest pains and snacking on nitro tabs or spray as they describe this over the phone to me, they have been to the hospital already and continue to have the pains weeks later. ZPIC Audits are is indeed very stressful.

You have just been selected  for a ZPIC Audits amongst an elite group of many who during the last 36 months have submitted via your billing, OASIS, Service Utilization, et al.. to the folks at CMS, created a data profile and pattern, which has been confirmed by the computers as 90% or greater chance it contains errors allowing them to recover several million dollars from you. (More of that another time)

The data is so compelling that it leaves CMS no other option than to validate what your doing. Via a post payment review.

So you have a letter.
CMS is fishing for money.
No denial of payment has been made as of yet.
A lawyer will do what at this point?
A consultant will do what at this point?
What can I the agency owner do for FREE, The answer is an amazing amount, and most owners properly coached need very little intervention until the midpoint of the process.
It is actually more important to build a financial rainy day fund at this point than spend like a sailor.

Everything that needs to be done at this point can be done by you, auditing of the census and the charts to look for the data patterns that triggered this fiasco, and the documentation patterns that will be denied, and perform a sample extrapolation from your global universe of claims to validate and assess your liabilities.

ZPIC Audits rather simple low-level activities.

So we now know that if you’re the recipient of this type of probe there will be financial losses at some point in time. Certainly not until charts are reviewed, as the law does not allow for the debit of money, until charts are approved and or denied.

So calm down take a deep breath this is not the end of the world, but ZPIC Audits it will not go away either. Some of you will need to go to the gym and work it out, others will resort to a few drinks whilst others will bury their head in the sand.

I have actually been in agencies that did not “get it” even though the pattern or trend was imminently clear to me. Too often owners and administrators really do not know the home health Conditions of Participation and documentation requirements for billing. What generally occurs is that the owner or administrator delegates “auditing” to a nurse or group of nurses who may understand basic documentation requirements but who also are very familiar with the clinical staff and often equally familiar with patients. They frequently “read between the lines” when auditing – and if in addition they do not know the requirements for skilled care they are likely to miss the point. Some documentation issues can be at least partially mitigated if identified and addressed appropriately. A ZPIC auditor will not read between the lines. The major areas of concern will of course be the agency’s understanding of what is required for adequate documentation of therapy provided, REASONABLE goal setting and skilled nursing “observation and assessment”. (Hello, now we even have separate billing codes to distinguish the types of care provided – how’s that for an audit edit set up?). Also there are many agencies who use “managment and observation” as a reason to recertify 85% of their patients often for multiple episodes without documentation of significant clinical issues requiring skilled nursing. Many agencies believe that one or two aberrant blood pressures with no change in medications or other treatment constitute the need for ongoing “observation and assessment”.

Maybe it is too soon to call an attorney when the letter arrives but if there is any chance of lessening the impact an ZPIC Audits may have – they must make sure they understand the rules if they are going to adequately respond to the audit requests yourself.



What is included in your Medicare Cost Report?

What is included in your Medicare Cost Report?

Gustavo A Viera a Medicare Cost Report Preparation firm with nearly 30 years of experience preparing Medicare Cost Reports. This Report is used by the government to track the Cost of Medicare and Medicaid programs. In addition, Medicare CPA uses the data from the Cost Reports to set reimbursement. Due to reductions in the Reimbursement System, choosing the right Medicare Accountant to prepare your Cost Report has never been more important.

Every year, Gustavo A Viera Medicare Cost Report Preparation firm prepares over a hundred Cost Report. Our highly trained and experienced Medicare Accountant review and ensure that your Medicare Cost Report is prepared in compliance with all CMS’s regulations.

We provide expert Medicare Cost Report Preparation services including:

  • Analysis of Accounting Records to ensure Compliance with Cost Reporting Regulations
  • Year End Adjusting Journal Entries, Adjusted Trial Balance
  • Cost Report Package for submission to corresponding Medicare Intermediary, including:
  • Electronic Cost Report
  • Work Papers related to Cost Report reclassification and adjustments
  • CMS Form-339 Questionnaire
  • Trial Balance
  • Grouping Schedule
  • Compiled Financial Statements
  • Electronic AHCA Cost Report File and copy of submitted AHCA Cost Report

Medicare Cost Report Preparation

Preparation of CMS annual Medicare Cost Report and supplementary schedules in one nice package, with suggestions for reimbursement opportunities when applicable. We also prepare the Medicaid Cost Report, in a similar fashion.

Medicare Cost Report Review Services

Review of the CMS annual Medicare Cost Report is prepared for you, to highlight any potential improvements, issues or omissions, and to offer suggestions to streamline the AHCA Cost Report preparation of future years.

Hospital Medicare Cost Report Preparation

Medicare Training & Consulting prepares several Critical Access Hospital Cost Reports. Our staff is well trained at the different reimbursement schedule for Critical Access Hospitals.




Medicare CPA Approximates Providers Received $6.6 Billion despite Tax Debts

Medicare CPA Approximates Providers Received $6.6 Billion despite Tax Debts

Medicare CPA VieraCPA approximates 7,000 Medicaid Cost Report providers in three selected states—Florida, New York, and Texas—had an estimated $791 million in unpaid federal taxes from 2009 or earlier, but nonetheless received about $6.6 billion in Medicare Cost Report and Medicare Cost Report reimbursements that year, according to a new study by the Government Accountability Office and Medicare Cost Report Preparation firms.

This represents about 5.6 percent of the Medicare Cost Reporting reimbursed by the selected states during 2009. The report noted that the amount of unpaid federal taxes that the GAO identified is probably understated because taxpayer data from the Internal Revenue Service reflects only the amount of unpaid taxes either reported on a tax return or assessed by the IRS through enforcement. It does not include entities that did not file tax returns or underreported their income.

The GAO report also profiled 40 Medicare Cost Reports providers, including dentist, home care providers, doctors, hospitals, medical suppliers and others. These individuals and businesses received a total of $235 million in Medicare Cost Reporting reimbursements, while having unpaid taxes of about $26 million. The amount of unpaid federal taxes ranged from approximately $100,000 to over $6 million.

Medicare CPA VieraCPA approximates these 40 cases, according to the report, show “the sizable amounts of unpaid federal taxes owed by some Medicaid providers, are among the most egregious examples of Medicare Cost Report Preparation providers with unpaid federal taxes we identified.”

Records reviewed by the Medicare CPA indicate that two of the providers reviewed by GAO investigators are currently, or were previously, under criminal investigation. One example of criminal behavior was a provider caught in a Medicare Cost Report Preparation billing fraud scam. Another company was found guilty of “improperly prescribing controlled substances.”

Other providers profiled in the report took actions that were not illegal, but raised the suspicions of state regulatory agencies and others. For example, providers reviewed by the GAO have had their professional licenses revoked and have been fined by state oversight agencies for regulatory violations. One provider was disciplined by the state Board of Medicine for “quality of care and record-keeping violations.”

Wining and Dining

One dentist profiled by the GAO owed over $100,000 in federal taxes, but nonetheless continued to spend money on “fine dining, trips, spas, shopping and wine.” Another couple bought a new home while their Medicare Cost Report business accumulated a $3 million tax debt.

More than 77 percent of the taxes owed by the 7,000 Medicaid providers came from payroll and individual and corporate tax. In addition, 72 percent of the taxes owed have been owed for more than five years, since 2007. The longer the IRS takes to collect taxes owed to the federal government, the odds grow that the tax revenue with never be collected.

The report showed that the IRS attempted to collect taxes from all 40 of the Medicaid health care providers who were examined in detail, but the IRS was often stymied due to hidden assets, broken commitments, or legal or corporate maneuvers taken by the providers to avoid paying their tax debts.

GAO investigators attempted to include the state of California in the report by obtaining Medicaid data from California, but determined that the data was unreliable for the purpose of the report and removed them from the analysis.

The report found that current federal law does not prohibit Medicaid providers who owe federal taxes from participating in Medicaid or receiving Medicaid payments. In addition, the report found that the IRS is limited to issuing a one-time tax levy to collect the unpaid taxes owed to the federal government. If the payment does not cover the tax debt owed, then the IRS has to issue another levy. Medicaid payments have never been continuously levied because they are not considered or do not qualify as “federal payments” under federal law.

If the IRS had a continuous levy authority for Medicaid, it could have collected between $22 million and $330 million from tax cheats from the three states studied, according to the report.

The report recommends that the IRS “explore further opportunities to enhance collections of unpaid federal taxes from Medicare Cost Report providers.” While citing operational challenges, the IRS agreed to further explore “opportunities to enhance collection of unpaid federal taxes.”