Medicare Cost Reports and Appeals: It's a Whole New World


Dramatic new rules for claiming and appealing Medicare Part A provider costs became effective January 1, 2016.Over the years, the appeals process has seemingly evolved into a game of “gotcha,” in which one misstep could result in a forfeiture of appeal rights and Medicare payments.   It’s important to note that cost reports and related appeals filed by hospitals with a December 31 fiscal year end are now subject to the new rules.

The American Health Lawyers Association published this article by Honigman health law partner Ken Marcus, which comprehensively reviews the amended rules:

A Funny Thing Happened on the Way to the PRRB: The Amended Cost Reporting and Appeal Rules.  

In sum, a provider is required, as a condition of payment , to either claim a cost item on the Medicare cost report or to include a detailed protested amount explaining and quantifying a cost item not claimed. The Medicare Provider Reimbursement Review Board (PRRB) appeals rules have been revised to correspond to the new cost reporting rules. As a result, the PRRB’s initial focus is on the cost report. Previously the presence or absence of a protested amount was a PRRB jurisdictional question which providers challenged with some measure of success. Under the new rules, the protested amount becomes a condition of payment.   Courts may grant greater deference to the protested amount requirement as a condition of payment.

The appeals process, which historically began upon receipt of the final payment determination – typically the notice of program reimbursement—in effect begins upon filing the cost report.   

Provider reimbursement and finance management is advised to thoroughly review the amended rules to assure full Medicare reimbursement and to pave the way for potential PRRB appeals.

To discuss the article or the amended rules, please connect with a member of the Honigman Health Care practice group.  

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