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4 Things You Need to Know About Medicare Cost Reports

Properly filing your Medicare Cost Reports is one the most important things you can do to keep your facility’s doors open. Certain facilities must file these reports to receive appropriate reimbursement for services provided. These reports detail provider information, including facility type and ownership, employee wage data, and financial data like revenue, bad debt, and, most importantly, expenses incurred.

There have been many changes to Medicare cost reporting rules and regulations this year, especially in light of the COVID-19 pandemic and the resulting global healthcare emergency. Many Medicare reimbursable facilities that could take advantage of new governmental grants and loans faced uncertainty and confusion due to unclear communication, continuous review, and ever-evolving rules regarding cost and reimbursement. Given the changes pertaining to Medicare Cost Reporting over the last year, it is more important than ever to highlight the most important things to be aware of.

Which Facilities Should File and When?

First and foremost, it’s imperative to know which facilities need to submit Medicare Cost Reports. According to CMS, the majority of facilities that are Medicare-certified must submit a cost report. The reports only apply to Medicare Reimbursable facilities. These facilities include:

  • Hospitals
  • Skilled Nursing Homes (SNFs)
  • Rural Health Clinics (RHCs)
  • Home Health Agencies (HHAs)
  • Federally Qualified Health Centers (FQHCs)
  • Comprehensive Outpatient Rehabilitation Facilities (CORFs)
  • Renal Facilities
  • Hospices
  • Community Mental Health Centers

Medicare Cost Reports should be filed with the Centers for Medicare and Medicaid Services (CMS) annually. You should file them within five months of closing your books.

Due to the COVID pandemic, facilities are receiving an automatic filing extension. Any delay could affect the reimbursement you contracted with Medicare to receive. If you are still unsure when your cost report is due, contact your Medicare Administrative Coordinator (MAC).

Electronic Submission Option

The CMS ensures that your information is filed and kept up to date in the Healthcare Provider Cost Reporting Information System (HCRIS) so that they can use the data to determine future reimbursement rates. The data may also be used to inform Medicare Trust Fund projections, among other things.

Facilities must submit their cost reports electronically through Electronic Cost Reports (ECRs). These submissions must include the ECR files, the signed signature page, and any supporting financial documentation (as determined by your MAC).

In the past, Medicare Cost Reports needed to be saved onto floppy disks, CDs, or flash drives and couriered or mailed directly to the facility’s fiscal intermediary (also determined by CMS).

Fortunately, you can now submit your reports online via the MCReF (Medicare Cost Reporting eFiling) portal. You also have the option of signing the reports electronically, either by signing within the actual software itself or by printing out, physically signing, and rescanning the signature page before submission. Just be sure to check the electronic signature box for this form of signing to be valid. Otherwise, you’ll need to physically sign the cost report’s signature page and send in the original signature page as a hard copy. 

Provider Relief Fund (PRF) Updates

According to the HHS, any money given to healthcare facilities through the Provider Relief Fund must be used “to prevent, prepare for, or respond to coronavirus, or to cover healthcare-related expenses or lost revenues attributable to coronavirus.”

In the wake of the COVID-19 Pandemic, the Provider Relief Fund (PRF) payment that many medical practices and facilities received from the government seemed like a boon. But now, many facilities that received the checks are struggling with uncertainty due to the changing rules regarding reporting and record keeping. The new Biden administration is currently reviewing the rules, so we will have to wait and see if the previous laws and regulations are still applicable. 

Regardless of the changes, or lack thereof, recipients need to make sure they are registered with the Provider Relief Fund Reporting Portal to receive real-time information straight from the government about when, where, how, and what they have to report. 


Provider Relief Fund recipients who got $10,000 or more will have to report how that money was used and may be subject to audits. Provider Relief Fund recipients who received $500,000 or more should anticipate having to do significantly more reporting and are even more likely to be audited. Any facilities that received over $750,000 total from all federal grant providers (i.e., PRF, CARES Act, Paycheck Protection Program, etc.) will be audited and should make sure they have a CPA who is well versed in auditing for federal grants.

Record Keeping

To reduce the risk of issues during the reporting and auditing process, ensure that your facility has clean and clear ledgers and records. These records should show exactly how you spent the PRF payments and confirm that the money was spent per PRF rules. You can find more information on spending rules for PRF payments here.

PRF Payments

Also, make sure to report all PRF payments on your Medicare Cost Report. The PRF payments should be listed under the statement of revenues section of the cost report and should be identified as “COVID-19 PHE PR”.

It is also important to note that payments from the PRF Uninsured Program, which take a portion of the PRF and allocate it towards treating uninsured persons, should not be reported on Worksheet S-10.

Paycheck Protection Program (PPP) Nuances

The Paycheck Protection Program is intended to provide incentives for small businesses to retain their employees on their payroll roster, even as business demand takes a hit due to COVID-19. These loans can be partially forgiven through the Small Business Administration (SBA).

In completing the Medicare Cost Report, facilities that previously qualified for the PPP and have received loan forgiveness must still report the forgiven amount on their cost report. The forgiven amount should be listed under the statement of revenues section of the cost report in the same field used for reporting PRF payments. The forgiven amount should not offset expenses in the Medicare Cost Report unless they went towards specific patient claims or were attributed to the Uninsured Program.

Being able to clearly, easily, and efficiently file Medicare Cost Reports is incredibly important for Medicare reimbursable facilities. This is especially true as the COVID-19 pandemic ravages the country, and newly introduced governmental regulations and grants must be accounted for. Hopefully, this article has shed some light on a few key things you should be aware of, making it easier to file your Medicare Cost Report.