As providers continue to navigate the new CMS Form 2540-24, early challenges, findings, and observations are emerging. Providers should understand initial challenges and assess updates to their accounting and reporting systems to improve accuracy and establish a consistent process for compiling the required cost reporting data.
What to Know
Areas to evaluate include, but are not limited to, the following:
- Contract labor expenses are now reported separately on worksheet A.
- Review general ledger chart of accounts to include separate accounts for contracted labor by department.
- Ensure that guidance is provided to the accounts payable team regarding the appropriate coding of invoices for contracted labor expenses.
- Medicare Advantage/Medicare HMO and Medicaid HMO are now reported separately, including revenues, census, admissions, and discharges.
- Review internal financial statements to identify that these payers are being reported separately. If not separated, update the accounts receivable system for mapping payers to separate general ledger accounts.
- Many providers are still combining Medicare Advantage/Medicare HMO with commercial insurance payers.
- Cost centers were added, including, but not limited to, the Activities Program, Quality Assurance and Performance Improvement Program (QAPI), Training and In-Service Education, and Patient Transportation Part A. This requires providers to accurately capture, separate, and report these expenses on the applicable lines of the new cost report forms.
- Review current general ledger accounts and create new accounts or sub-accounts to align with the new cost centers.
Another key form change was preventative (not therapeutic) vaccines being reported in a separate cost center. Capturing and reporting applicable expenses, revenues, and payments was crucial to receiving the correct settlement calculation. Thus, providers should safeguard that they are accurately capturing and tracking preventative vaccine revenues and expenses and consider coding to separate general ledger accounts.
Additional information not previously required to complete Worksheet S-2 – Identification Data (such as the Medicaid certification date, the Clinical Laboratory Improvement Amendments (CLIA) number, or a CLIA certificate of waiver that meets the requirements in 42 CFR 493, and if applicable, the ambulance provider number) must now be reported. Providers may conduct an annual review of certification information and ensure maintenance of permanent file documentation to support this newly reported information.
Next Steps & Considerations
Providers should remember that the intent of the updated cost report forms has remained the same and will allow Medicare to:
- Obtain more relevant data for rate-setting
- Refine Skilled Nursing Facility (SNF) Market Basket modeling
- Possibly develop an SNF wage index
- Better calculate program margins, and then make recommendations to legislators
While additional information and reporting were required for the new forms, the purpose of each worksheet remains the same. Additional time may be needed to comply with the new reporting requirements and changes, especially during the preparation process.
Looking ahead, providers may focus on the following considerations:
- With the new column added to Worksheet A for contracted labor expense, this could lead to contracted hours being requested for all cost centers, as applicable. This would require additional tracking from providers.
- While not required yet, providers may benefit from recording their ancillary expenses related to Medicare Advantage/Medicare HMO stays separately from traditional Medicare expenses in their general ledger due to the revenues related to these payers now being reported separately.
- With the many changes to the CMS Form 2540-24, CMS could expand its intentions and use of the additional requested information. Therefore, accurate record keeping and reporting are essential.
Assistance and support for providers is available, and the Senior Living & Long-Term Care team at Forvis Mazars is ready to help. If you have experienced difficulties with these form changes and requirements, or have further questions, please reach out to a professional from Forvis Mazars.