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Sept 27 -- The Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS), invites comment by November 27, 2023 on the reinstatement of the Skilled Nursing Facility/Skilled Nursing Facility Complex Cost Report.

The primary function of the cost report is to implement the principles of cost reimbursement that require that SNFs maintain sufficient financial records and statistical data for proper determination of costs payable under the program. Specifically, CMS–2540–23 collects discrete data, previously reported in summary form, used in determining the cost weights for the SNF market basket and for payment adequacy analyses. SNFs and SNF health care complexes participating in the Medicare program submit these cost reports annually to report cost and statistical data used by CMS to determine reasonable costs. Essentially the methods of determining costs payable under Medicare involve making use of data available from the provider's accounting records, as usually maintained, to arrive at equitable and proper payment for services to beneficiaries.
The Form CMS-2540-23 cost report is needed to determine a provider’s reasonable cost incurred in furnishing medical services to Medicare beneficiaries and reimbursement due to/or from a provider. The Form CMS-2540-23 cost report is also used for annual rate analyses and payment refinement activities, including the SNF market basket and the possible development of a SNF wage index. Additionally, the Medicare Payment Advisory Commission (MedPAC) and the Office of the Actuary (OACT) use the SNF cost report data to calculate Medicare margins, to formulate recommendations to Congress regarding the SNF prospective payment system (PPS), and to conduct additional analyses of the SNF PPS.
Providers receiving Medicare reimbursement must provide adequate cost data based on financial and statistical records that can be verified by qualified auditors.
The S series of worksheets collects statistical data that identify the provider’s location, CBSA, date of certification, questions relative to their operations, average length of stay, number of inpatient stays and discharges. The A series of worksheets collects the provider’s trial balance of expenses for overhead costs, and revenue and non-revenue generating cost centers. The B series of worksheets allocates the overhead costs to the revenue and non-revenue generating cost centers using functional statistical bases. The C series of worksheets collects charges for the revenue generating cost centers and computes a cost to charge (CCR) ratio for each cost center. The D series of worksheets are Medicare specific and are used to determine Medicare reasonable costs. The E series of worksheets are settlement worksheets used to determine the amount due to or from the provider or program. The G series of worksheets are used to collect a SNFs financial statement information (balance sheet and income statement).
Additionally, the cost report is used by CMS to support program operations, payment refinement activities, and to make Medicare Trust Fund projections.

Skilled Nursing Facility Cost Report: https://data.cms.gov/provider-compliance/cost-report/skilled-nursing-facility-cost-report
Draft data collection instrument and technical documentation: https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing/cms-2540-23
FRN: https://www.federalregister.gov/d/2023-21122

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