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How to Increase Accuracy on the Skilled Nursing Facility Medicare Cost Report?

January 26, 2021
Compliance, Documentation, Billing, & Coding By Jennifer Matoushek, Senior Consultant

Accuracy on Skilled Nursing Facility (SNF) Medicare Cost Reports can cause anxiety for even the most seasoned business managers, so, what can be done to improve on this metric?

It first starts by classifying expenses and revenues to the correct accounts. Having an effective accounting system in place, and trained staff, are key to achieving this success. An area to focus on for upcoming cost reports is COVID-19 Public Health Emergency (PHE) Funding. Your organization needs to ensure any revenue received is reported on the organization’s trial balance and is then reported on Worksheet G-3 line 24.50 on the Medicare cost report. Miscoding of journal entries can impact a facility’s cost report and can have other impacts on a facility’s Medicaid Medicare Part B offsets where applicable. For more information on reporting COVID-19 PHE funding, read “Closing the Books on 2020? Don’t Make This Mistake on Your Cost Reports!”




The second area where nursing facilities should focus on are adjustments made on Worksheet A-8. This worksheet is utilized to offset all non-allowable expenses. The cost report preparer should be well versed with the regulations and know when to offset non-allowable costs for the current fiscal year. Offsetting too much or not enough cost could have further implications for your organization down the road.

The third area of focus is Worksheet S-3, Part III, SNF wage index information. Nursing facilities should pay particular attention to this schedule to ensure wages and hours for the different direct salary positions are accurately reported. Nursing facilities should be looking to see if a direct salary position has increased from the prior year. If so, is this accurate? What caused the increase? Cost report preparers should be analyzing this area carefully and asking questions to nursing facilities when needed.

The next area of focus should be the nursing facility’s bad debt log. The nursing facility should be monitoring this information monthly and continued collection efforts to ensure the bad debt log is substantial. Your organization wants to ensure all information associated with the current year bad debt log is easily obtainable if requested during desk review. There are several requirements that should be followed to claim bad debts on your organization’s Medicare cost report. Another focus area that aligns with bad debt logs is bi-weekly payments and lump sum adjustments (LSA) from your Medicare Administrator Contractor (MAC). Incorrectly reporting this information could result in an incorrect Medicare settlement amount.

The last area of focus is ensuring your organization meets the cost report due date. Providers have been granted an additional 60 days to file their cost reports from the initial due date for any cost reporting ending date between March 1, 2020 and December 31, 2020.

LW Consulting, Inc. (LWCI) can assist with each of the areas listed above. If you feel that your organization is struggling with any of these areas, reach out to LWCI, our experts are happy to help.


For assistance with any of these cost report focus areas, contact Jennifer Matoushek, Senior Consultant, at 717-213-3130 or email

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