October 21, 2019

The Proposed Home Health Agency Cost Report – CMS-1728-19

By Donna Zoelick, Director, Advisory Services

The Proposed Home Health Agency Cost Report – CMS-1728-19

On April 16, 2019, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to update the home health agency (HHA) cost report to form CMS-1728-19. The proposed effective date for this new form is for cost reporting periods beginning on or after January 1, 2019 and ending on or after December 31, 2019. We are already three quarters through the 2019 calendar year and CMS has not issued the form in a final format; therefore, agencies might need to retroactively gather the additional information required by these new forms going back to January 1, 2019 or the beginning of their cost reporting year. Following is a recap of the noteworthy changes from the CMS-1728-94 current form to the CMS-1728-19 proposed form.

Worksheet S-3 Part I

Currently, Medicaid visit and patient counts are combined in the “Other” column. The new forms will have a separate column to report Medicaid statistics. Therefore, the number of visits and the number of patients will need to be separately reported for Medicare, Medicaid and all other.

An additional change to this worksheet is the segregation of Skilled Nursing visit and patient data between RN and LPN. Similarly, there is also a new segregation of Physical Therapy and Occupational Therapy visit and patient counts between Physical Therapy, Physical Therapy Assistant, Occupational Therapy and Occupational Therapy Assistant.

Worksheet S-3 Part V

This is a new worksheet to the HHA cost reporting form. Direct salaries and fringe benefits, contract labor costs and paid hours will be reported for the following categories. The cost report will calculate the average hourly wage for each line based on this data. This may cause a challenge for any staff or contractors that are paid per visit rather than per hour.

  • Registered Nurses
  • Licensed Practical Nurses
  • Certified Nursing Assistants / Nursing Assistants / Aides
  • Physical Therapists
  • Physical Therapy Assistants
  • Physical Therapy Aides
  • Occupational Therapists
  • Occupational Therapy Assistants
  • Occupational Therapy Aides
  • Speech-Language Pathologists
  • Other Medical Staff

Worksheet A

Similar to the segregated reporting of patient visits on S-3 Part I, new cost centers have been created on the CMS-1728-19 Worksheet A for RN, LPN, Physical Therapy, Physical Therapy Assistant, Occupational Therapy and Occupational Therapy Assistant.

A new cost center has also been created to report the administrative costs of Remote Patient Monitoring. Per 42 CFR 409.46 (e), “remote patient monitoring is defined as the collection of physiologic data (for example, ECG, blood pressure, or glucose monitoring) digitally stored and transmitted by the patient or caregiver or both to the home health agency. If remote patient monitoring is used by the home health agency to augment the care planning process, the costs of the equipment, set-up and service related to this system are allowable only as administrative costs”. This should not be confused with Telehealth, which has its own line on Worksheet A. The recommended allocation basis for Remote Patient Monitoring on Worksheet B-1 is “Time Spent” by discipline.

Worksheet C

The proposed CMS-1728-19 form has eliminated the reporting of visits by CBSA code on Worksheet C. Only the aggregate cost per visit will be calculated for the expanded discipline list, on Worksheet C Part I.

Worksheet F-1

The reporting of Gross Patient Revenue will now be segregated between Medicare, Medicaid and Other. Previously, this was reported as one number for all payer types combined.

With the additional reporting requirements noted above, below is a list of items that HHA’s should be working on to prepare for the new reporting requirements.

  1. Confirm that your payroll system provides the detail for the new cost centers: RN, LPN, Therapists and Therapy Assistants (PT and OT). All nursing can no longer be combined, and all PT and OT can also no longer be combined.
  2. Request that your outside contractors provide the costs and hours for the new list of reporting disciplines. If current invoicing does not identify therapists, assistants, and aides and other information needed separately, they will need to provide that information going back to the beginning of your cost reporting year, and going forward.
  3. Reach out to your billing software vendor to confirm that reports will be available to provide the number of visits and patients for the expanded list of disciplines and broken down between Medicare, Medicaid and all other payer sources as well.
  4. Modify your chart of accounts as needed to separate expenses for the new cost centers on Worksheet A, and to separate the patient revenue by payer source for Worksheet F-I.

It is important that all HHA’s are proactive and begin preparing for the additional reporting requirements of the CMS-1728-19 forms. At Marcum, we have a team of professionals ready to answer any questions you may have regarding these new forms and how to be best prepared for their implementation.

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