Home Health & Hospice Week

For home health agencies that have let cost reports slide to the bottom of their priority lists, now's the time to get a handle on the problem.

Consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas offers these tips for cost report success:

1. Understand accrual accounting. Using Medicare's required accounting method isn't optional. Providers using cash-based accounting need to learn how to do it correctly.

2. Don't retro-fit your data. HHAs should keep a good chart of accounts as they go along. "A good chart of accounts allows the expenses to be recorded in a natural manner and [is] designed to flow into the cost report," Boyd explains.

For example, providers should keep six separate salary accounts rather than one (see related story, p. 210), record medical supplies into nonroutine and routine categories, and record aide salaries for Medicare versus non-Medicare duties separately, Boyd suggests.

Agencies can do this "via the chart of accounts rather than trying to do at year end as required for cost report," he tells Eli.

3. Use technology. You can make your life easier by utilizing some simple accounting software, Boyd believes. For example, Boyd likes Intuit QuickBooks accounting software for small businesses.

4. Sign up for the new PS&R system. Don't risk cost report delays by putting off registration for the new Internet-based provider statistical and reimbursement (PS&R) reporting system that the Centers for Medicare & Medicaid Services introduced in June. Using the new system requires an Individuals Authorized Access to CMS Computer Systems (IACS) login and password, and that can take two to four weeks to obtain.

The new system began operations July 13 and is effective for cost report years ending in February 2009 and later, CMS says.

5. Utilize education and information. Be ready to use the educational information offered by trade groups, intermediaries, and other government entities to sharpen your cost report accuracy.