Supporting Statement for the
Home Health Agency Cost Report
And Supporting Regulations in 42 CFR 413.20, 413.24, 413.106
FORMS CMS‑1728-94
A. BACKGROUND
1. CMS is requesting the Office of Management and Budget (OMB) review and approval of Form CMS‑1728-94, the Home Health Agency Cost Report. Revisions have been made to the original forms and have been incorporated within this request for approval. These Cost Report Forms are filed annually by freestanding providers participating in the Medicare program to effect year end cost settlement for providing services to Medicare beneficiaries.
This makes corrections to Chapter 32 of the Provider Reimbursement Manual, Part II (CMS Pub. 15-II). In addition, this revision implements regulations at 42 CFR 413.20 and 413.24. 42 CFR 413.20 and 413.24 require adequate cost data and cost reports from providers on an annual basis. The data submitted on the cost reports supports management of Federal programs.
Providers receiving Medicare reimbursement must provide adequate cost data based on financial and statistical records which can be verified by qualified auditors.
The data from these cost reporting forms will be used for the purpose of evaluating current levels of Medicare reimbursement.
B. JUSTIFICATION
1. Need and Legal Basis
Providers of services participating in the Medicare program are required under sections 1815(a) and 1861(v)(1)(A) of the Social Security Act (42 USC 1395g) to submit annual information to achieve settlement of costs for health care services rendered to Medicare beneficiaries.
The CMS-1728-94 cost report is needed to determine the amount of reimbursable cost, based upon the cost limits, that is due these providers furnishing medical services to Medicare beneficiaries.
2. Information Users
In accordance with sections 1815(a), 1833(e) and 1861(v)(1)(A) of the Social Security Act, providers of service in the Medicare program are required to submit annual information to achieve reimbursement for health care services rendered to Medicare beneficiaries. In addition, 42 CFR 413.20(b) requires that cost reports will be required from providers on an annual basis. Such cost reports are required to be filed with the provider's fiscal intermediary. The functions of the fiscal intermediary are described in section 1816 of the Social Security Act.
The Fiscal Intermediary uses the cost report not only to make settlement with the provider for the fiscal period covered by the cost report, but also in deciding whether to audit the records of the provider. 42 CFR 413.24(a) requires providers, receiving payment on the basis of reimbursable cost, to provide adequate cost data based on their financial and statistical records which must be capable of verification by qualified auditors.
Besides determining program reimbursement, the data submitted on the cost reports supports management of the Federal programs. These data are extracted from the cost report, by the fiscal intermediaries, for transmission to CMS, and are used by the Office of the Actuary in making projections of Medicare Trust Fund requirements and by CMS to develop the cost limits per discipline. In addition, the data is available to Congress, researchers, universities, and other interested parties. However, the collection of data is a secondary function of the cost report, whose primary function is the reimbursement of providers for services rendered to program beneficiaries.
3. Improved Information Technology
Consideration has been given to reduction of burden by the use of improved information technology to report required cost data. While some providers compute the cost report manually, many providers use an automated cost report preparation process. The use of a computer in the preparation results in a significant reduction of burden. CMS has, in the past, encouraged providers to submit their cost reports using automated cost report preparation packages on a voluntary basis. However, for cost reporting periods ending on or after March 31, 1997, Home Health Agencies are required to submit via an electronic medium.
4. Duplication and Similar Information
The cost report is a unique form that does not duplicate any other CMS information collection. This form specifically provides for the reimbursement methodology that is unique to freestanding home health agencies. No other existing form can be modified for this purpose.
5. Small Business
This form has been designed with a view towards minimizing the reporting burden for small providers. Worksheets are completed on an as‑needed basis which is dependent on the complexity of the provider. Consequently, the burden imposed on them is minimized. A provider may submit its own computer generated forms for their use only in lieu of the forms provided by CMS. These computer prepared cost reports, however, must be reviewed by CMS or affected intermediary before being placed into use.
6. Less Frequent Collection
If the annual cost reports are not filed, the Secretary will be unable to determine whether proper payments are being made under Medicare. If a provider fails to file a cost report by the statutory due date, it is notified that interim payments are reduced unless a cost report is filed. If the report is not filed within another 30 days, interim payments are suspended. Finally, if a provider fails to file a cost report, all interim payments made since the beginning of the cost reporting periods may be deemed to be overpayments, and recovery action may be initiated.
7. Special Circumstances
This information collection complies with all general information collection guidelines in 5 CFR 1320.6.
8. Federal Register Notice/Consultations Outside of CMS
The 60-day Federal Register notice was published on January 19,2007, attached.
The instructions and the electronic reporting specifications with respect to the various revisions are new sections in this chapter and have been revised in accordance with prior consultation with the appropriate industry. The comments submitted by the industry were analyzed and where applicable changes to the forms and instructions were made.
9. Payment/Gift to Respondent
There is no payment or gift to respondents.
10. Confidentiality
Confidentiality is not pledged. Medicare cost reports are subject to disclosure under the Freedom of Information Act.
11. Sensitive Questions
There are no questions of a sensitive nature.
12. Estimate of Burden (Hours and Wages)
For each HHA it takes 176 hours to fill out the form CMS-1728-94, without the revisions for PPS, this includes reporting hours and record keeping hours. The revisions to the forms will take an additional one hour to complete. There are approximately 5,069 free-standing and provider based HHAs resulting in 892,144 total hours of burden associated with the HHA cost report.
The information collection of data for HHA-based hospices is now accounted for under the free-standing hospice cost report R-249 (agency form number identifying the collection) (OMB 0938-0758). This form is also referred to for cost reporting purposes as the form CMS-1984-99.
Therefore, the total national annual burden is 892,144 hours.
The respondent cost is calculated as the number of hours of paperwork burden (892,144) times the standard rate of $12.00 per hour. Thus, the respondent cost is $10,705,728.
13. Capital Cost
There are no capital costs.
14. Cost to Federal Government
Annual Cost:
Cost associated with distribution of forms and instructions:
Shipping, collation, printing, and packaging copies of Form CMS‑
1728-94 and corresponding instructional revisions $8,360.00
Annual cost to intermediaries:
Annual cost incurred is related to processing information contained on the forms, particularly associated with achieving settlements. Intermediaries handling cost are based on what intermediaries spent in 1996. This information comes from the latest available Contractor Audit and Settlement Reports, CMS-1525A, maintained by the Office of Financial Management.
$7,480,940
Annual cost to CMS:
Total CMS processing cost: $283,800.00
Total Federal Cost $10,372,248.00
15. Program/Burden Changes
There is an adjustments reported on the OMB Form 83-I as a result of the information collection of data for HHA-based hospices now being accounted for under the free-standing hospice cost report CMS R-249 (OMB 0938-0758).
16. Publication and Tabulation Dates
The data submitted on the cost report supports management of the Federal programs. These data are extracted from the cost report, by the fiscal intermediaries, for transmission to CMS, and are used by the Office of the Actuary in making projections of Medicare Trust Fund requirements. In addition, the data is available to Congress, researchers, universities, and other interested parties. CMS now offers some public use data files via the Internet and through mail order.
17. Expiration Date
These cost reports do not lend themselves to an expiration date, as they are used on a continuous basis. They appear (in paper form) only in a provider manual; revising the manual to change the date for 5% of the forms’ user would not be efficient. Nor would it be efficient to expect software vendors to revise their software for a date, or to expect the providers to buy new software for this purpose. Therefore, we request this exception.
18. Certification Statement
There are no exceptions to the certification statement.
Statistical Methods
There are no statistical methods employed in this collection.
| File Type | application/msword |
| File Title | Supporting Statement for the |
| Author | HCFA Software Control |
| Last Modified By | CMS |
| File Modified | 2007-03-30 |
| File Created | 2007-01-04 |