The Importance of Medicare Cost Report Compliance

We know that CMS requires the Medicare Cost Report as a condition of payment, but we should also note the basic principle of Medicare Cost Report filing. See 42 C.F.R. s. 413.24.

The overarching principle reads: “Providers receiving payment on the basis of reimbursable cost must provide adequate cost data.” Id.

You need to:

  1. Make sure you maintain records
  2. Make sure it is capable of being audited
  3. Make sure the records are accurate and complete
  4. Make sure the method of allocation is approved
  5. Make sure you file the cost report annually

If you wish to explore the impact of certification on the Medicare cost report, there are numerous District Court decisions that hold a facility accountable under the False Claims Act.  For example, one court wrote:

Relator alleges that both Medicaid and TRICARE reimbursements are based on representations made in Tenet's Medicare cost reports. Because the Court finds that the cost reports submitted to Medicare can form the basis for liability under the False Claims Act, the Court arrives at the same conclusion regarding the cost reports submitted to Medicaid and Tricare, in light of the fact that both Medicaid and Tricare rely on the representations made in the Medicare cost report. – U.S. ex. rel. Osheroff v. Tenet Health

As always, please don’t rely on this post for legal advice. Seek competent counsel should you need.



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