IRS INCREASES ALLOWABLE
Effective July 1, 2022, the standard mileage rate for business travel has been increased to 62.5 cents per mile, an increase of 4 cents from the current allowable reimbursement rate. This increase, mid-year, is in recognition of the increase in fuel costs being experienced across the country. Mid-year increases in the optional mileage rate are rare, as the rate is usually modified at the beginning of each year. The last mid-year increase occurred in 2011.
This reimbursement rate can be paid to employees for the use of their personal vehicles in the conduct of business. The announcement is located at A-2022-13 (irs.gov). Additional information is available at IRS increases mileage rate for remainder of 2022 | Internal Revenue Service.
IS IT TIME FOR A SPECIAL INCREASE
IN REIMBURSEMENT RATES?
U.S. inflation is at a 40-year high. According to Bloomberg, the consumer price index rose at an annual rate of 8.6% in May. Few observers see any reduction in inflationary pressures until such time as energy costs decline. It is quite apparent that the proposed reimbursement rate increases, scheduled to take affect in October 2022, are significantly insufficient to meet hospice cost increases being experienced and to be experienced. Personnel cost pressures on healthcare providers, including hospices, are exceeding the 8.6% increase based on conversations with our hospice clients.
National and state hospice organizations are addressing the increasing costs in many ways, including comments to the proposed hospice payments scheduled for October 2022. Hospices should be contacting their Senators and Representatives directly regarding the insufficiency of the scheduled reimbursement increases, especially in the short-term.
COST REPORTING: MEDICARE INTEREST
Based on cost reports prepare by and reviewed by The Health Group, LLC, we will be providing information to assist hospices to improve the accuracy of the cost report submission. Many hospices have secured an Extended Repayment Schedule (“ERS”) to liquidate a CAP liability, or a liability related to significant claim denials. Interest expense is a nonallowable expense if the interest is related to the repayment of an assessment on a determined Medicare overpayment. Generally, the interest incurred is nonallowable whether the repayment is part of an Extended Repayment Schedule (“ERS”) or is incurred due to another borrowing secured to repay the Medicare program liability. Hospices, and other providers, should segregate interest incurred relating to a Medicare overpayment from other interest expense in the accounting records.
Medicare interest should be reported as an expense on the Hospice’s cost report but removed as an adjustment to allowable expenses on Worksheet A-8.
2022 HOSPICE FINANCIAL MANAGEMENT ACADEMY
The program provides a vast array of financial coverage specifically designed for hospice providers regardless of size, operating structure, and geography. Space is limited for the program to better ensure the benefits to the attendees. Information concerning the program, including registration is available here. Special rates have been secured with the Hotel Monteleone. Hotel registration information, including a reservation link, is also provided with information on the program.