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Volume 20.13

The Hospice Cost & Data Report (“Cost Report”) was substantially modified in 2014 to facilitate the accumulation of hospice costs by level of care (“LOC”), as well as capture other information, which can be used in establishing Medicare reimbursement rates for hospice providers.  The importance of the Cost Report became increasingly evident as the FY 2020 hospice payment rates for continuous home care (“CHC”), general inpatient care (“GIP”), and inpatient respite care (“IRC”) were rebased as a result of Cost Reports submitted for FY 2017.  Routine home care (“RHC”) rates were not rebased but were reduced to provide the funding to support the rebased rates for the other three LOCs.  As provided in the Fiscal Year 2020 Hospice Payment Rate Update Final Rule, “CMS is finalizing changes to the hospice payment rates to improve payment accuracy within the system. This includes rebasing the CHC, GIP, and IRC per diem payment rates, in a budget-neutral manner as required by statute, to more accurately align payments with the costs of providing care in different settings.”

Given the importance of the Cost Report in the determination of Medicare hospice payment rates and the financial and operating changes resulting from the COVID-19 PHE, consideration of and guidance from CMS regarding how COVID-19 PHE incremental expenses should be reported on the cost would be greatly appreciated.

Hospices, like other healthcare providers, are incurring substantial expenses during the COVID-19 PHE.  These expenses fall into three (3) general categories which are consistent with the manner that costs are accumulated and reported in the Cost Report:

  • General Service Costs
  • Direct Patient Care Service Costs
  • Nonreimbursable Costs

Barring any direction from CMS, The Health Group, LLC will be reporting COVID-19 PHE expenses on the cost report based on the nature of the expenditure.  Additionally, Provider Relief Funding will be provided as “Other Revenue” and not applied as an offset to expense in accordance with current cost reporting instructions.

We have requested CMS guidance if they intend to segregate COVID-19 PHE expenses on future cost report submissions.  The following questions have been sent to CMS:

Question 1: Inasmuch as CMS has provided guidance on the reporting of telecommunication technology costs in the Hospice Cost & Data Report (line 46 or a subscript of line 46 on Worksheet A, via Worksheet A-2), is it CMS’s position that all incremental patient care costs should be reported on line 46, thereby identifying and segregating those incremental patient care expenses attributable to COVID-19 PHE?

Question 2: Are incremental COVID-19 PHE expenses that are general and administrative in nature to be reported with other general and administrative expenses on the Hospice Cost & Data Report (Worksheet A lines 1-16) or are they to be separately reported from ongoing administrative activities?

Question 3: We are assuming that Provider Relief Funding Revenues, as earned, would be reported as Other Revenue in the Worksheet F Series.  Provider Relief Funding is not specifically targeted to Medicare patients.  Is this assumption that Provider Relief Funding is to be reported as “Other Revenue” correct?

Question 4: Expenses submitted to HHS as a use of Provider Relief Funds cannot be funded by any other revenue source.  This is not a problem for 2020 as hospice rates are based on historical, pre-COVID 19 PHE expenses.  However, how does CMS intend to segregate, or address, these expenses for purposes of setting future hospice Medicare reimbursement rates?

Question 5:  Will CMS be providing an update to the cost reporting instructions that addresses reporting the incremental COVID-19 PHE expenses, as well as reporting Provider Relief Funding Revenues?