Reviews of Cost Report Worksheet S-10

Reviews of Cost Report Worksheet S-10


In the Fiscal Year (FY) 2018 Inpatient Prospective Payment System (IPPS) Final Rule, CMS finalized that uncompensated care data from the Medicare Cost Report Worksheet S-10 would be incorporated into Factor 3 of the Disproportionate Share Hospital Uncompensated Care Payment (DSH UCP). This payment methodology continued with the FY 2019 IPPS Final Rule, and was also proposed in the FY 2020 IPPS rule.

In the FY 2019 IPPS Final Rule, CMS indicated that audits of the data reported on providers' Worksheet S-10 of their Medicare Cost Reports were expected to begin in the fall of 2018. In the fall of 2018, CMS issued instructions to the Medicare Administrative Contractors (MACs) with steps for review of Worksheet S-10 for selected FY 2015 cost reports.    

The S-10 audits included a review of provider's compliance with their own documented charity care and financial assistance policies (FAP) as well as the Medicare Cost Report instructions, the completeness and accuracy of provider's bad debts, reconciliation of the provider's financial accounting records with the bad debt amounts, and charity care/FAP amounts reported on Worksheet S-10. The audits of Worksheet S-10 may have resulted in adjustments to both bad debt and charity care amounts.

The audit process will continue in subsequent years as future uncompensated care payments are expected to be based on Worksheet S-10 data. In June 2019, CMS issued instructions to MACs to begin audits of FY 2017 cost reports. MACs began sending information to selected providers in June/July 2019.

The IPPS Proposed and Final Rules can be found on the CMS website at:


The links below provide additional information on the reviews and references to the reporting of Worksheet S-10.

Page Last Modified:
09/06/2023 05:05 PM