DZA’s Healthcare Finance Forecast – Catherine Bauman, Manager
Optimizing Medicare Cost Reports: Best Practices for Managing Inpatient Days
Accurate reporting of inpatient days is a key component in preparing a Medicare cost report. Medicare reimburses healthcare facilities based on a calculated per diem, which involves dividing total allowable costs by the number of patient days. Since this formula directly impacts a facility’s reimbursement, it is crucial to ensure that inpatient days are correctly reported. Overstating patient days can decrease the facility’s per diem rate, which ultimately reduces the facility’s reimbursement from Medicare.
In this post, we’ll explore common issues related to inpatient days, and provide tips for reconciling internal statistics to ensure a smooth and accurate Medicare cost report submission.
Understanding the Role of Inpatient Days in Medicare Reimbursement
Medicare reimburses facilities for inpatient days based on a calculated per diem. This per diem is determined by dividing the facility’s total allowable costs by the total number of patient days. It’s essential to accurately track patient days, as any errors or discrepancies can directly affect the reimbursement amount. Overstating patient days will decrease the per diem, which results in lower Medicare reimbursement for the facility.
Step 1: Reconcile Internal Statistics to the Revenue Code Report
The first recommended step is to reconcile internal statistics to the revenue code report regularly. This should ideally be done monthly or at least quarterly to catch any discrepancies early.
Here’s how to do it:
- Start by comparing the inpatient charges from the revenue code report to those reported in the facility’s internal statistics. These figures should align or be close to one another.
- If discrepancies are found, it’s important to scrub the internal statistics to ensure that:
- Patient days are not being overstated.
- Swing bed patients are not mistakenly included as inpatient days.
The Importance of Properly Reporting Swing Bed Patients
Swing bed patients have unique reporting requirements that are sometimes overlooked. To qualify for swing bed status, patients must have a three-day qualifying stay before being admitted. However, there are instances where the entire stay of a swing bed patient is reported as inpatient days, which can lead to inaccuracies in the cost report.
It’s important to remember that swing bed patients are reported separately and have their own per diem. Therefore, it’s crucial to distinguish between these patients and traditional inpatient days to prevent errors in the reimbursement calculation.
Step 2: Compare Medicare Patient Days to the PS&R
Another effective way to verify the accuracy of inpatient days data is by comparing the Medicare patient days to the Provider Statistical and Reimbursement Report (PS&R). This report reflects the total number of patient days that have been processed and paid by Medicare.
While there can be lags in Medicare’s processing, this report can still be used as a valuable cross-reference to ensure that your internal statistics align with what Medicare has processed and reimbursed. Any variances can be addressed and corrected during this comparison.
Step 3: Final Check Before Submitting the Data
Before submitting the final data to the cost report preparer, it’s essential to conduct one last thorough review of the internal statistics. This end-of-year review ensures that the data is up to date and accurate before being sent for calculation.
Once the data is reconciled and finalized, it can be entered into the Medicare cost report to calculate the new inpatient per diem.
Need Assistance? Don’t Hesitate to Reach Out
If there are still questions or if additional assistance is needed during the preparation of the Medicare cost report, please reach out to Catherine Bauman at cbauman@dza.cpa.
Want to learn more about Catherine? Read her blog.
