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1
HEALTHCARE
Form CMS-2552-96 Update (Transmittals 18 and
19) Don Fry Director, Healthcare Advisory HFMA,
New York Chapters March 30 - April 2, 2009
KPMG LLP
2
Summary of effective dates and significant
changes

• The effective dates for instructional changes
  vary due to different implementation dates.
• TRANSMITTAL 18
• Worksheet S-3 Part II the instructions were
  revised to accommodate the inclusion of fees and
  hours for legal and consulting services in
  contract administrative and general costs.
• Worksheet S-5 Questions 16 through 19 added
  to capture data associated with Darbepoetin Alfa
  (Aranesp) for renal patients
• Worksheet B-2 Lines 3 and 4 added to
  accommodate post stepdown adjustments for
  Darbepoetin Alfa (Aranesp)
• Worksheet E Part B revised to reflect that
  interns and residents not in approved programs
  and professional services of teaching physicians
  is not subject to LCC
• Changes to the electronic cost reporting
  specifications are effective for cost reporting
  periods ending on or after April 30, 2008.

3
Summary of effective dates and significant
changes

• TRANSMITTAL 19
• Worksheet S-2 Question 30.04 is revised to
  emphasize that subproviders in a CAH are
  reimbursed for GME on Worksheet E-3, Part IV,
  while the CAH is reimbursed for GME at 101
  percent.
• Worksheet S-2 Question 63 is added to indicate
  if the cost report was filed using the PSR in
  its entirety or in part.
• Worksheet A-8-2 Columns 2 and 11 are revised
  to reflect the use of generic physician
  identifiers (Dr. A, Dr. B, etc.) as opposed to
  confidential or traceable identifier such as the
  physicians name, NPI, UPIN or social security
  number, etc.
• Worksheet E Part A Question 24.98 is added to
  capture all credits received from manufacturers
  for replaced medical devices in accordance with
  change request 5680, transmittal 1509, dated May
  9, 2008.

4
Summary of effective dates and significant
changes

• TRANSMITTAL 19 (Continued)
• Worksheet L, Part I - Lines 2 and 4.01 through
  4.03 are revised to reflect the phase out of the
  IME adjustment factor in accordance with the
  August 19, 2008 Federal Register, Vol. 73, No.
  161 on page 48672. The IME adjustment factor is
  reduced by 50 percent for services rendered
  during the period 10/1/2008 through 9/30/2009
  and is eliminated for services on or after
  10/1/2009. NOTE The phase-out of Capital IME was
  reversed in H.R.1. American Recovery and
  Reinvestment Act (AKA the Stimulus
  legislation), Section 4130. CMS has advised
  2552-96 system vendors not to implement the
  change noted herein for Worksheet L Part I. CMS
  will confirm this reversal in Transmittal 20.
• Changes to the electronic cost reporting
  specifications are effective for cost reporting
  periods ending on or after October 31, 2008.

5
Worksheet S-2, Line 30.04 (T19 change)

• GME AND CAH-BASED SUBPROVIDERS
• Line 30.04--If this facility qualifies as a CAH
  is it eligible for cost reimbursement for IR
  training programs? Enter a Y for yes or an N
  for no. If yes, the GME elimination is not made
  on Worksheet B, Part I, column 26 and the program
  would be cost reimbursed. If yes complete
  Worksheet D-2, Part II. Additionally, CAHs are
  reimbursed for GME in subproviders on worksheet
  E-3, Part IV and are reimbursed for GME in the
  rest of the CAH at 101 percent of reasonable
  cost. When a CAH has subproviders, it must
  maintain separate records (for the CAH and
  subprovider(s)) documenting the FTE count, time
  spent and which component the resident is
  training in.

6
Worksheet S-2, Lines 40.01 through 40.03

• To capture home office identifying information
  when the provider is part of a chain

• Section originally added in T16 FI / MAC name
  and FI / MAC number added in T17, clarified in
  T18.

7
Worksheet S-2 (T18 change)

• ADDITION OF S-2 LINES 61 AND 62 (Multi-campus)
• Line 61--If this facility is part of a
  multi-campus complex and was issued a separate
  CCN (formerly known as a provider number), enter
  a Y for yes, otherwise enter N for no.
• Line 62--If you responded Y to question 61,
  enter all campus(es) information (including this
  campus) as follows name in column 0, the county
  in column 1, state in column 2, zip code in
  column 3, the CCN in column 4, the CBSA in column
  5, and the FTE count for this campus in column 6.
  If additional campuses exist, subscript this
  line as necessary.
• NOTE Per 2/3/2009 conversation with CMS These
  instructions will be clarified in the near future
  (Transmittal 20!) to indicate that these
  questions pertain only to multi-campus hospitals
  under one hospital provider number that have
  campuses in more than one CBSA.

8
Worksheet S-2 (T18 change)

• ADDITION OF S-2 LINES 61 AND 62 (Multi-campus)
  Appearance in ICR-2008
• NOTE ICR-2008 currently provides ten subscripts
  to Line 62, numbered 62.01-62.10. We will expand
  the number of subscripts if needed, based on user
  experience.

9
Worksheet S-2 (T19 change)

• ADDITION OF S-2 LINE 63
• Line 63--Was this cost report filed using the
  PSR (either in its entirety or for total charges
  and days only)? Enter Y for yes or N for no
  in column 1. If Y, enter the paid through
  date in column 2 (mm/dd/yyyy).

10
Worksheet S-3 Part II (T18 change)

• CLARIFICATION TO INSTRUCTIONS FOR LINE 9.03
• Line 9.03--Enter the amount paid for management
  and administrative services furnished under
  contract, rather than by employees. Include on
  this line contract management and administrative
  services associated with non-overhead cost
  centers that are included in the wage index.
• Examples of contract management and
  administrative services that would be reported on
  line 9.03 include, department directors,
  administrators, managers, ward clerks, and
  medical secretaries. Report only those personnel
  costs associated with the contact. DO NOT
  include on line 9.03 any contract labor costs
  associated with lines 21 through 35 and
  subscripts for these lines. DO NOT include the
  costs for contract top level management chief
  executive officer, chief operating officer, and
  nurse administrator these services are included
  on line 9. DO NOT include costs for equipment,
  supplies, travel expenses, or other miscellaneous
  items. (10/1/2003b).

11
Worksheet S-3 Part II (T18 change)

• CLARIFICATION TO INSTRUCTIONS FOR LINE 22.01
• Line 22.01--AG costs are expenses a hospital
  incurs in carrying out its administrative and/or
  general management functions. Include on line
  22.01 the contract services that are included on
  Worksheet A, line 6, column 2 (General Service -
  Administrative and General, Other). Contract
  information and data processing services, legal,
  tax preparation, cost report preparation,
  clerical, and purchasing services are examples of
  contract labor costs that would be included on
  Worksheet S-3, Part II, line 22.01. Do not
  include on line 22.01 the costs for top level
  management contracts (these costs are reported on
  line 9) or non-overhead management and
  administrative contracts (these costs are
  reported on line 9.03).

12
Worksheet S-5 (T18 change)

• ADDITION OF S-5 LINES 16 THROUGH 19 (Darbepoetin
  Alfa (Aranesp))
• Line 16--Enter the direct product cost net of
  discount and rebates for Darbepoetin Alfa
  (Aranesp) Include all Aranesp cost for patients
  receiving outpatient, home (method I or II), or
  training dialysis treatments. This amount
  includes Aranesp cost furnished in the renal
  department or any other department if furnished
  to an end stage renal disease dialysis patient.
  Report on this line the amount included in line
  57 of Worksheet A.
• Line 17--Based on the instructions contained on
  line 16, enter the dollar amount of Aranesp
  included on line 64 (home dialysis program) from
  Worksheet A.
• Line 18--Enter the number of micrograms (mcgrs)
  of Aranesp furnished relating to the renal
  dialysis department.
• Line 19--Enter the number of micrograms of
  Aranesp furnished relating to the home dialysis
  program.

Costs entered on S-5 Lines 16 17 will be
removed via a post-stepdown adjustment on
Worksheet B-2 line numbers 3 and 4)
13
Worksheet S-5 (T18 change)

• ADDITION OF S-5 LINES 16 THROUGH 19 (Darbepoetin
  Alfa (Aranesp)) appearance in ICR-2008

14
Worksheet A-8-2 (T19 change)

• USE OF GENERIC PHYSICIAN IDENTIFIERS
• List each physician using an individual
  identifier (not the physicians name, NPI, UPIN
  or social security number of the individual, but
  rather, Dr. A, Dr. B, , Dr. AA, Dr. BB,
  etcetera). However, the identity of the
  physician must be made available to your fiscal
  intermediary upon audit. When RCE limits are
  applied on a departmental basis, insert the word
  "aggregate" (instead of the physician
  identifiers) on the line below the cost center
  description.
• NOTE Although these changes are being made in
  Transmittal 19, this is a clarification to
  instructions that have been in place since
  Worksheet A-8-2 was first created in the early
  1980s. It was never CMS intent that physicians
  actual identities would be reported on Worksheet
  A-8-2.

15
Worksheet B-2 (T18 change)

• LINES 3 AND 4 NOW RESERVED FOR TRANSFER OF S-5
  LINES 16 AND 17 appearance in ICR-2008

16
Worksheet E Part A (T19 change)

• CREDITS FOR REPLACED MEDICAL DEVICES
• Line 24--Enter any other adjustments. For
  example, enter an adjustment resulting from
  changing the recording of vacation pay from cash
  basis to accrual basis. (See CMS Pub. 15-I,
  2146.4.) Specify the adjustment in the space
  provided. Enter on line 24.98 all credits
  received from manufacturers for replaced medical
  devices (See change request 5680, transmittal
  1509, dated May 9, 2008). Only FI/contractors
  complete line 24.99 by entering the sum of lines
  52, 53, 55, and 56.

17
Worksheet E Part B (T18 change)

• REVISED TO REFLECT THAT INTERNS RESIDENTS NOT
  IN APPROVED PROGRAMS AND PROFESSIONAL SERVICES OF
  TEACHING PHYSICIANS IS NOT SUBJECT TO LCC
• Line 7 Enter zero (0) on this line because the
  hospital / component cannot bill separate charges
  for services of residents (in unapproved or
  approved programs) which are reimbursed under
  Part B.
• Line 9 Enter zero (0) on this line because the
  hospital / component cannot bill separate charges
  for the direct patient care services rendered by
  physicians in teaching hospitals under the
  election described in 42 CFR 415.160.

18
Worksheet I-1 (T18 change)

• CLARIFICATION TO THE INSTRUCTIONS FOR LINES
  10-16
• Lines 10 through 16--Include on the appropriate
  lines costs directly charged to the renal
  department after reclassifications and
  adjustments. Report other direct costs on line
  16 that cannot be specifically identified on
  lines 11 through 15.
• NOTE Line 15 should exclude the costs of EPO
  and Aranesp administered to ESRD patients in the
  renal department and home program identified on
  Worksheet B-2, lines 1, 2, 3 or 4.

19
Worksheet I-2 (T18 change)

• ADDITION OF LINE 14.01
• Line 14.01.--Report the direct costs of Aranesp
  net of discounts furnished in the renal
  department. Include all costs for patients
  receiving outpatient, home, or training dialysis
  treatments. This amount includes Aranesp cost
  furnished in the renal department or any other
  department if furnished to an end stage renal
  dialysis patient. Enter Aranesp amount for
  informational purposes only. This amount is not
  included in the total on line 16.
• Line 15.--Report the costs of other services
  furnished and billed in the renal department that
  are paid for outside the composite payment rate.
• Line 16--Add columns and enter totals. Since
  lines 14 and 14.01, column 9 are shaded, no costs
  for EPO and Aranesp are included in the total for
  line 16, column 9 and column 6, lines 14 and
  14.01 should be excluded from total.
• Column 9--Add columns 1 through 8 for each line,
  except lines 14 (EPO) and 14.01 (Aranesp), and
  enter the total.

20
Worksheet I-3 (T18 change)

• CHANGE TO COLUMN 10 INSTRUCTIONS TO ACCOMMODATE
  NEW LINE 14.01 (ARANESP)
• Column 10--Use subtotal costs in column 9,
  Worksheet I-2 to allocate overhead cost. To
  compute the unit cost multiplier, transfer the
  amount from Worksheet I-2, line 16, column 9 to
  Worksheet I-3, line 16, column 10. Do not
  allocate overhead costs to lines 14 (EPO) or
  14.01 (Aranesp).

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2552-96 FORMS AND INSTRUCTIONS ARE AVAILABLE VIA
THE CMS WEB SITE

• CMS web site URL for cost reporting forms
• http//www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?
  filterTypenonefilterByDID-99sortByDID1sortOr
  derascendingitemIDCMS021935

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Questions?
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HEALTHCARE
Form CMS-2552-09 Progress Update Don
Fry Director, Healthcare Advisory HFMA, New York
Chapters March 30 - April 2, 2009
KPMG LLP
24
What Needs to Happen

• Based on recommendations, CMS is revising the
  Cost Reporting Forms and Instructions
• The Cost Report must be internally reviewed by
  various CMS divisions to validate that the
  changes comply with their data requirements.
• The Cost Report must be released to the industry
  for Comment, in the form of a prior
  consultation draft. The announcement must appear
  in the Federal Register. Organizations, such as
  AHA, HFMA and state hospital associations have
  historically taken a great deal of interest in
  such changes.
• The Office of Management and Budget must review
  the cost report to verify that the cost report
  conforms with federal budgetary requirements.

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Timing

• In late February 2008, a very rough, incomplete
  preliminary draft was provided to the cost report
  system vendor community for initial comments.
  This draft contained selected sets of forms but
  no instructions.
• The original estimated release date for the prior
  consultation draft was May, 2008. To date, this
  has not occurred.
• There is a Federally-mandated minimum of 150 days
  elapsed time between publication in the Federal
  Register and approval.
• Once approved, the cost report will be effective
  for Fiscal Years Beginning on or after a specific
  date. CMS had been aiming for 10/1/2008. This
  would have meant that the first full-year cost
  reports using the new forms would have been due
  150 days after September 30, 2009.
• The actual release date of the prior consultation
  draft will determine the actual effective date,
  considering the 150-day comment period.

26
Highlights of the February 2008 rough draft

• GENERAL CHANGES
• All references to Old and New capital removed
  throughout cost report
• Cost center list renumbered
• Subprovider I and Subprovider II designations
  replaced by
• Subprovider IPF
• Subprovider IRF
• Subprovider Other

NOTE At this time, this is all subject to change
by CMS
27
Highlights of the February 2008 rough draft

• Worksheet S-2 Part I
• List of provider components (lines 3-17) includes
  columns for CBSA (all lines) and Provider Type
  (hospital / subproviders only)
• Hospital-based HHAs continue to list multiple
  CBSAs on Worksheet S-4
• Questions reorganized into sections by function
• Inpatient acute care PPS
• PPS-Capital
• Teaching hospitals
• IPFPPS
• IRFPPS
• LTCH PPS
• TEFRA providers
• Title XIX inpatient services
• Rural providers
• Miscellaneous cost reporting information

NOTE At this time, this is all subject to change
by CMS
28
Highlights of the February 2008 rough draft

• Worksheet S-2 Part II
• New questions, generally organized by type of
  provider
• Many questions on draft S-2 Part II are also on
  current 339-95 questionnaire
• ALL PROVIDERS
• Provider Organization and Operation (addresses
  change of ownership, provider Medicare
  termination, transactions with related
  organizations / individuals)
• Financial Data Report (confirming preparation of
  financial statements by CPA, indicating of
  expenses revenue on C/R differ from those in
  the financials)
• Bad Debts (includes asking if providers bad
  debt policy changed and if deductibles
  co-payments were waived by the provider)
• PSR Data (questions asking about use of PSR
  data to prepare the cost report and the extent of
  adjustments made to PSR data)
• Rural providers
• Miscellaneous cost reporting information

NOTE At this time, this is all subject to change
by CMS
29
Highlights of the February 2008 rough draft

• Worksheet S-2 Part II (continued)
• PPS PROVIDERS
• Contract services, cost of home office / related
  organization personnel, Wage Related Costs
• COST REIMBURSED PROVIDERS
• Capital Related Cost (asset status, impact of
  appraisals on depreciation expense, new/amended
  leases, policy changes)
• Interest Expense (new loans / mortgages,
  treatment of funded depreciation, replacement /
  recall of existing debt)
• Purchased Services
• Provider-Based Physicians
• Home Office Costs
• Change in Bed Compliment

NOTE At this time, this is all subject to change
by CMS
30
Highlights of the February 2008 rough draft

• RE-NUMBERED COST CENTER LIST (A-series, B-series,
  C, D-series)
• Line 90 (Other capital) positioned with other
  capital-related lines as Line 3
• Blank lines at end of each cost center category
  for future expansion
• COST CENTER CATEGORIES
• General Service Lines 1-23
• Inpatient Routine Service Lines 30-46
• Ancillary Service Lines 50-73
• New ancillary cost center Medical Implants
  Charged to Patients
• Outpatient Service Lines 90-93
• Other Reimbursable Lines 95-102
• Special Purpose Lines 105-117
• Nonreimbursable Lines 120-124
• Total Line number is now 200 instead of 101

NOTE At this time, this is all subject to change
by CMS
31
Highlights of the February 2008 rough draft

• OTHER SIGNIFICANT CHANGES
• Worksheet S-7 completely reorganized to include
  SNF-related questions from 2552-96 S-2 and to
  eliminate obsolete columns
• Worksheet D Part V completely revised to
  eliminate obsolete columns
• Worksheet E Part A DSH and IME calculations
  moved to separate worksheet Bed Days
  calculation moved to Worksheet S-3

NOTE At this time, this is all subject to change
by CMS
32
Highlights of the February 2008 rough draft

• OTHER SIGNIFICANT CHANGES (continued)
• Worksheet E-3 Parts I, II, III will be separate
  worksheets for IPF, IRF, LTCH, respectively
• Worksheet E-3 Part IV to combine functions of
  old E-3 Parts IV and VI

NOTE At this time, this is all subject to change
by CMS
33
The cost report has always been important, even
in the age of prospective payment

• Most Medicare providers and services
  (approximately 88) are now paid under a form of
  PPS instead of a cost-reimbursement system.
• CMS uses cost report data for purposes that are
  critical to the proper updating of prospective
  payment systems Market baskets and payment
  adequacy analysis.
• CMS market baskets are used to update payments
  and cost limits in the various CMS prospective
  payment systems.
• Payment adequacy analysis is used as a tool to
  determine if Medicare is paying fair and
  efficient rates for different classes of
  providers, different types of services, and for
  Medicare relative to non-Medicare populations.
• When providers do not validly and completely fill
  in relevant cost report fields, CMS is compelled
  to make assumptions about the validity of those
  fields.

34
CMS-2552-09

• Are there any questions?

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35
HEALTHCARE
CMS New PSR System Don Fry Director,
Healthcare Advisory HFMA, New York
Chapters March 30 April 2, 2009
KPMG LLP
36
CMS Web-Based PSR System

• The Centers for Medicare and Medicaid Services
  (CMS) has been developing, over the past few
  years, a web-based PSR tool for Intermediaries
  and providers to access PSR summary and detail
  data files for cost report purposes and for
  financial analysis.
• CMS contracted in 2003 with CGI Federal, a large,
  independent government systems IT contractor, to
  redesign, program and implement the system.

37
CMS Web-Based PSR System

• Why redesign Medicares PSR system?
• The Medicare PSR legacy system has been in use
  since 1985, and has had 38 version updates in
  that time.
• The technology, although adequate, is out-dated
  and cumbersome to maintain.
• The current system is installed on multiple
  mainframe computers located at various Medicare
  Fiscal Intermediary sites around the country.

38
CMS Web-Based PSR System

• What will be the advantages of the new PSR
  system?
• A web-based system allows direct access to data
  and reports by providers as well as MACs.
• The system and the data will reside on servers at
  CMS in Baltimore instead of in multiple FI
  locations. This will aid in timely updates and
  maintainability of the system.
• Users will be able to obtain summary or detail
  reports based on their specific requirements of
  date ranges, report types and provider numbers.
• Users will be able to obtain data in PDF or CSV
  formats.

39
CMS Web-Based PSR System

• What is the current status of the new PSR
  system?
• Originally expected to go-live in April, 2007.
• System has been tested and is ready for use.
• However, CMS delayed implementation pending
  satisfactory implementation of a security
  front-end called IACS
• CMS finally released the new system in February,
  2009.
• The first cost report FYEs will be 01/31/2009.

40
CMS Web-Based PSR System

• What is IACS?
• Individual Authorized Computer Services
• A gateway security front-end to all CMS
  web-based systems requiring a user ID, password
  and profile
• The profile identifies the user, systems to which
  they have access, provider numbers to which they
  have access, contact information, etc.

41
CMS Web-Based PSR System

• When the new PSR is released, what will it look
  like?
• Two formats PDF and CSV
• PDF affords better readability
• CSV enables importation into Excel for further
  analysis
• Much of the data remains the same, but is
  presented in a more logical and user-friendly
  format.
• Lets take a look at the before and after formats!

42
Legacy Report 110 Summary
43
New Report 110 Summary
44
New Report 110 Summary Section and Line
Reorganization
45
New Report 110 Summary Section and Line
Reorganization
46
Legacy PSR Detail Report
47
New PSR Detail Report PDF File
48
New PSR Detail Report CSV File
49
CMS Web-Based PSR Report Request Process

• Request a summary report by entering report
  parameters in a sequence of Web pages

50
CMS Web-Based PSR System

• Summary Reports can be requested on-line by the
  provider and will be returned to their system
  in-box. This file can then be saved to the
  providers local hard drive or server for further
  review and analysis.
• Detail Reports (with PHI data) can be ordered
  on-line, but must be mailed to the authorized
  provider contact on a password protected CD-Rom
  by the MAC.
• NOTE Only providers have access to this system
  at the present time, not chains or consultants.

51
CMS Web-Based PSR System In-Box
Displays a list of all reports that have been
submitted for processing. If there are no
reports, There are no results to view at this
time message appears.
52
CMS Web-Based PSR System

• Reports should be deleted from the in-box after
  saving to hard drive or server. Reports not
  deleted after 21 days will be automatically
  deleted by the system. These can however be
  reordered at any time.
• Use parameter criteria for zeroing in on needed
  data, dont order everything. Select based on
  report types, dates, provider numbers and formats.

53
CMS Web-Based PSR System

• CMS will be providing training in use of the
  system. This may entail web-based training or
  live sessions conducted by MACs.
• On-line Help system steps you through the
  process, and should be able to answer most of
  your questions.

54
CMS Web-Based PSR System

• Are there any questions?

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