Medicare Administrative Contractor (MAC) Worksheet S-10 audits are complete for federal fiscal year (FFY) 2017, and the Centers for Medicare & Medicaid (CMS) appears ready for MACs to begin the next round of audits.
A Change Request notice has been distributed to MACs that signals audits of FFY 2018 S-10 data.
Below, we provide important details we understand are contained in the Change Request as well as information hospitals should keep front of mind when preparing for imminent audits.
FFY 2018 Worksheet S-10 data will be reviewed for all qualifying providers that receive federal uncompensated care (UC) reimbursement.
Reviews of Worksheet S-10 data will need to be completed by the MACs by December 31, 2020.
Impact to Hospitals
Due to the significant increase in hospitals that will require MAC reviews of Worksheet S-10 from previous years, MACs are expected to begin requesting FFY 2018 S-10 data in March 2020 in an effort to complete reviews by the end of the year. At the time of publication, we know of three MACs that have already begun requesting data.
This could create further burdens for hospitals to meet the stringent requirements necessary to complete the MAC S-10 audit. This is especially true for hospitals that weren’t selected for previous S-10 audits for either FFYs 2015 or 2017—a strong majority as only 25% of hospitals were audited those years.
Considerations to Prepare for Your Audit
Regardless of your hospital's S-10 audit experience, your teams should consider the following areas when planning for impending FFY 2018 audits.
Previous audit request letters asked for extensive information to be provided during a limited timeframe of two weeks. Hospitals should prepare for similar timeframe deadlines in this round of audits.
Financial Assistance Policies
Hospitals' financial assistance policies (FAP) in effect during FFY 2018 are certain to be requested.
In the most recent rounds of FFY 2017 audits, hospitals were asked to provide additional responses regarding certain charity transactions and programs, and how the transactions were reported in the charity section of the hospital's FAP.
Hospitals will need to provide patient detailed charity care and bad debt listings tied to the hospital's actual filings on the S-10.
Hospitals will also be asked to describe their reasoning behind the way S-10 charity care and bad debt data is prepared.
Further, hospitals will be expected to append this patient detail to a universal template; thus a massive amount of S-10 data will need to be formatted, creating an additional burden for hospitals.
If data isn't formatted according to CMS and MAC standards, it could be considered incomplete and won't be accepted for MAC review purposes.
Hospitals should prepare for extensive sampling of both charity care, including insured and uninsured, and bad debt patients.
We're Here to Help
With this level of scrutiny, it's imperative that all hospitals that qualify for UC payments prepare to meet this audit standard and do so in a limited timeframe.
If you have questions about potential implications of the audits, contact your Moss Adams professional.
Michael Newell has worked in health care financial management since 1982. He specializes in preparing and reviewing hospitals’ Medicare DSH and Worksheet S-10 for cost report filings. He can be reached at (469) 587-2120 or [email protected].