Cost Reporting and Settlement Processes

Institutional providers prepare cost reports at the end of their fiscal year and send them to an FI for review and settlement. The FI performs a clerical desk review of each cost report using Automated Desk Review (ADR) software. This review process identifies mathematical errors and data inconsistencies. After resolving all anomalies, the FI uses ADR software to apply additional edits prescribed by CMS. After a file passes this second set of edits, the FI sends a cost report extract file (referred to "as submitted") to CMS. CMS reapplies the second set of edits and either accepts or rejects the file.

The FI decides whether to audit a cost report on the basis of findings from a professional desk review. The FI adjusts the cost report for clerical and professional desk review findings and audit adjustments if they exist. Next, the FI settles the cost report and issues a Notice of Program Reimbursement to the provider. When the cost report has been "settled," the FI sends another cost report extract to CMS. After an FI has settled a cost report, it may be reopened for further changes. Once the FI has made necessary changes, the FI settles the cost report again, and sends the "reopened" file to CMS.

Cost Report Datasets

CMS creates a Minimum Dataset for each type of provider cost report received (hospital, SNF, HHA, and ESRD). For hospitals, additional files are available including the Exempt Hospital and Excluded Unit Dataset, the Part B Dataset, the Capital Dataset, the Worksheet A Dataset, and the Hospital Cost Report Systems Master File. Each of the datasets contain only the most accurate version of the cost report available from each provider. For example, if CMS has an "as submitted" and a "settled" cost report for a provider, the dataset will include only the settled cost report data for that provider. If CMS has only an "as submitted" cost report, the report will be contained in the dataset.

File Creation

The datasets are subsets of the data maintained in the HCRIS Provider Master Files. Each dataset is a snapshot of the provider cost report data that has been received to date for provider reporting periods beginning on or after October 1 of one year and before October 1 of the following year (except for ESRD providers). The ESRD datasets are maintained by calendar year. CMS creates a dataset when cost report data for reporting periods beginning in the one year span have been received from at least 50% of the providers. CMS updates the datasets quarterly at the end of March, June, September, and December. The files are available on the last day of the month following the end of the quarter.

The first available Hospital datasets contain data for all hospital fiscal periods beginning on or after October 1, 1982, and before October 1, 1983. The first available SNF Minimum Dataset contains data for all SNF fiscal years beginning on or after October 1, 1988, and before October 1, 1989. The first available ESRD dataset contains data for calendar year 1993. The HHA data are available for cost reporting years ending on or after December 31, 1994.

File Maintenance

As described in File Creation, CMS updates the datasets quarterly. The edits performed on the data are described under Cost Reporting and Settlement Processes in the Introduction to this chapter.

File Structure and Usage

The datasets contain provider-specific information extracted from hospital, SNF, HHA, and ESRD datasets. The data include provider characteristics, utilization data, costs and charges by cost center (in total and for Medicare), Medicare settlement data, and financial statement data. The data are used within CMS and by other government agencies, and the public.

Data Structure and Usage

The Datasets have fixed length records. They are available as either SAS datasets or flat files, sorted by provider number.

Methods of Access

Authorized CMS users can access the datasets directly at the CMS Data Center (HDC). Unauthorized users, who cannot directly access the files may obtain Public Use Files (PUFs) in either the SAS or sequential flat file format. Further information about PUFs is available in the Public Use Files section of this document.

Migration of Data

The Medicare cost reporting forms that are the source of the provider data are modified or new forms are issued as the reporting requirements change. For example, new versions of the hospital cost reporting forms were issued in 1981, 1983, 1984, 1985, 1989, 1992, and 1996. The specifications are usually maintained in the same file structure.

List of Data Elements

A list of data elements will be included in the future on the CMS web site at www.cms.hhs.gov.

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