Date

Press release

CMS REQUIRES CERTAIN TYPES OF MEDICAL CENTERS AND FACILITIES TO SUBMIT COST REPORTS IN ELECTRONIC FORMAT

CMS REQUIRES CERTAIN TYPES OF MEDICAL CENTERS AND FACILITIES TO SUBMIT COST REPORTS IN ELECTRONIC FORMAT

The Centers for Medicare & Medicaid Services (CMS) today announced it will require certain types of medical centers and facilities to submit their annual Medicare cost reports in an electronic format, starting in May 2005.

The final rule on electronic reporting will be published tomorrow in the Federal Register covering hospices, organ procurement organizations, rural health centers, federally qualified health centers, community mental health centers and end-stage renal disease facilities.

Generally, CMS is applying the current electronic cost reporting requirements used for hospitals since October 1989, and for skilled nursing facilities and home health agencies since January 1997. Benefits of the standardized electronic format include increased accuracy of these cost reports and reduced preparation time.

The new regulation supports Health and Human Services Secretary Tommy G. Thompson's regulatory reform initiative, which aims to streamline regulatory requirements in order to improve quality of care and access to care for Americans.

"This change will make it quicker and easier to file and review cost reports, helping Medicare to pay for services more accurately." Secretary Thompson said. "By adopting common-sense reforms like this, we are freeing up time and resources that would be better spent improving the lives of individual patients."

The Medicare law requires that no payments be made to a provider unless it has furnished the information needed to determine the amount of payments due them. Providers generally submit this information through cost reports covering a 12-month period. The reporting period is based on the provider's accounting year.

"This rule will continue to help bring greater efficiency to the Medicare program," CMS Administrator Tom Scully said. "We believe the software for the cost reports will virtually eliminate the chance of computation errors that can cost taxpayer money. Moreover, the changes will be phased in gradually and we will make free software available when requested, based only on a provider's financial need."

The new rule requires providers to submit their cost reports via electronic means, beginning with cost reporting periods that end on Dec. 31, 2004. This means the first electronic reports will be due May 31, 2005. (Cost reports are due by the last day of the fifth month following the close of the reporting period.)

The file will include a statement signed by the provider's administrator or chief financial officer certifying the accuracy of the electronic file or the manually prepared report. A proposed rule on electronic cost reports for these types of medical centers and facilities was published in the Federal Register on July 26, 2002.

The new rules for the medical centers and facilities will be phased in over two years. This will allow providers to become familiar with the electronic filing requirements. For the first two years a print copy of the report must be submitted, along with the electronic version. Until Dec. 31, 2006, the print copy will continue to be the official copy.

During the initial phase-in period, CMS will not reject any electronic cost report, but Medicare's fiscal intermediaries, who are contractors that process Medicare Part A medical claims, will make the provider aware of what the fiscal intermediary did not approve. This allows the provider to correct any problems with electronic filing during

To get free software, a provider must request the software and explain to the fiscal intermediary how it would be a financial hardship to purchase the software, which should be available by October 2004.

Waivers of the electronic filing requirement can be requested if the health care facility believes it would cause a financial hardship. Additionally, CMS will continue to allow providers with low or no Medicare utilization to request a waiver of full or simplified cost reporting requirements.