Insights: Article

Ready for Worksheet S-10 Uncompensated Care Changes?

By Eddie Phibbs

October 17, 2017

For several years, the Centers for Medicare and Medicaid Services (CMS) has said data from Worksheet S-10 would be used for calculating uncompensated care. Finally, the 2018 Medicare Inpatient Prospective Payment System (IPPS) final rule went into effect Oct. 1.

Why is this important?
This final rule makes significant changes to the computation of Factor 3 for Disproportionate Share Hospital (DSH) Uncompensated Care. CMS has specified that it will begin to incorporate Worksheet S-10 data from Fiscal Year (FY) 2014 cost reports into the computation of Factor 3 for FY 2018.  

In addition, the factor will also be computed using a three-year average so the 2014 data will impact 2018, 2019 and 2020 calculations.

Uncompensated care defined
The 2018 final rule also provides a clearer definition of what CMS considers “uncompensated care” for purposes of calculating Factor 3. Uncompensated care will be the amount on line 30 of Worksheet S-10, which is the cost of charity care (line 23) and the cost of non-Medicare bad debt (line 29). This excludes Medicaid shortfalls.  

CMS will continue to work with the provider community to address concerns on these changes through education and further refinement of the instructions to the Worksheet S-10 as appropriate.

Now what?
Further guidance on S-10 is available from CMS via Transmittal 10, issued in November 2016. It clarifies and revises the instructions for the Worksheet S-10, including the instructions regarding the reporting of charity care charges 

IPPS hospitals initially had until Sept. 30 to submit amended cost reports. However, CMS granted an extension for hospitals to resubmit certain Worksheet S-10 data. In order to be considered, amended FY 2014 and FY 2015 cost reports due to revised or initial submissions of Worksheet S-10 must be received by Medicare Administrative Contractors (MACs) on or before Oct. 31.

Going forward, it will be more important than ever to understand your Worksheet S-10 data.

Update: CMS has extended the filing date from October 31, 2017 to January 2, 2018.

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