Prepaid Health Plan Cost Report (HCPPS)

Prepaid Health Plan Cost Report

CMS-276.Cost Report Instructions

Prepaid Health Plan Cost Report (HCPPS)

OMB: 0938-0165

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FORM CMS 276

CHAPTER 23
INSTRUCTIONS FOR THE
PREPAID HEALTH PLAN
COST REPORT
FORM CMS-276-08

FORM CMS 276

Table of Contents
2300 INTRODUCTION..........................................................................3
2302 WORKSHEET S - CERTIFICATION PAGE...............................5
2303 WORKSHEET A - BUDGET FORECAST..................................6
2304 WORKSHEET B - PREMIUM DETERMINATIONS...............11
2305 WORKSHEET C - INTERIM REPORTING..............................14
2306 WORKSHEET D - PLAN STATISTICS....................................16
2307 WORKSHEET E - SUMMARY TRIAL BALANCE.................20
2308 WORKSHEET F - RECLASSIFICATIONS...............................24
2309 WORKSHEET G - ADJUSTMENTS TO EXPENSES..............25
2310 WORKSHEET H - STATEMENT OF COSTS OF
SERVICES FROM RELATED ORGANIZATIONS...........................28
2311 WORKSHEET I - ALLOCATION-AND STATISTICS
FOR A & G ALLOCATION.................................................................29
2312 WORKSHEET J - SUMMARY OF PROVIDER COSTS...........30
2313 WORKSHEET K - SUMMARY APPORTIONMENT OF
NONPROVIDER COSTS.....................................................................32
2314 WORKSHEET L - SUMMARY OF MISCELLANEOUS
ITEMS....................................................................................................33
2315 WORKSHEET M - SETTLEMENT SHEET...............................34
2316 WORKSHEET N - MEDICARE PREMIUM
RECONCILIATION...............................................................................35
2317 CERTIFICATION BY INDEPENDENT AUDITOR...................36
APPENDIX A - OPTION 2 INSTRUCTIONS......................................37

FORM CMS 276
2300

INTRODUCTION

The reporting requirements of a prepaid health care plan that has contracted with CMS are
specifically defined in 42 C.F.R. §417.572(a) and (c), and 417.576(b) (1). For reimbursement
purposes, these plans can be grouped into two major categories - Health Maintenance
Organizations/Competitive Medical Plans (HMOs/CMPs) and Health Care Prepayment Plans
(HCPPs). Briefly, the reporting requirements for each category are:
HMO/CMP

HCPP

1. Budget forecast
(Submit original
and two copies)

No later than
90 days prior
to the beginning
of the contract
period

2. Interim reports
(Submit original
and two copies)

The Semi-Annual
Interim no later than
60 days after the close
of the first 6 month
of a contract
period.

3. Final cost report Billing Option 1
Plans Only (Submit
Original and two
copies)

No later than
60 days prior
to the beginning
of the contract
period

Worksheets
S, A and B

The Semi-Annual S and C
Interim no later than
45 days after the close
of the first 6 month
period of a contract
period

The Interim Final report
must be filed on the
worksheets for the final
cost report no later than
60 days after the close of
the contract period.

N/A

S, D thru M

No later than180
days after the close
of the contract period.
This cost report may
be used only by Plans
electing Billing Option 1
and must be certified by
an independent certified
public accountant (42
C.F.R. §417.576(b) (2)).

No later than
120 days after
the close of
the contract
period

S, D thru N

If a plan fails to submit the budget and enrollment forecast on time, CMS may (1) establish an
interim per capita rate of payment on the basis of the best available data and adjust the rate
accordingly; or (2) if insufficient data exists on which to base an interim rate, suspend interim
payments until the required report is filed and a new rate is established (42 C.F.R. §417.572(b)).

FORM CMS 276

For failure to submit the final cost report on time, CMS may (1) initiate recovery of amounts
previously paid, or (2) reduce interim payments, or (3) both (42 C.F.R. §417.576(b)(3)). CMS
may extend the period for filing the cost report for good cause shown by the Plan (42 C.F.R.
§417.576(b) (1)).

The worksheets comprise the prescribed format for the cost reports and are provided in Excel
format. Electronic copies of the worksheets for each category of filing are accessible through
CMS’ Health Plan Management System (HPMS). If the worksheets require modification to
accommodate a Plan's unique reporting requirements, written approval must be obtained from
CMS in advance of the contract period to which the report applies. CMS' approval of an
alternative cost report may be granted if the alternative format presents cost and statistical data in
the same detail as the prescribed format. In addition, CMS must be assured that such an
alternative format can be used efficiently to determine the proper amount of reimbursement for
covered services furnished to Medicare enrollees.
Methods of allocation and apportionment of costs set forth in these worksheets are not optional,
but they are required for the determination of reimbursement. If the Plan wishes to use an
alternative method of allocation or apportionment or just change the approved method of
allocation or apportionment from the prior contract year, CMS' advance approval is required.
The Plan's request for such a change must be received by CMS at least ninety (90) days prior to
the beginning of the first affected reporting period (42 C.F.R. §417.566)).
The cost report worksheets are designed to be of sufficient flexibility to take into account the
diversity of operations, yet provide sufficient cost and statistical information to enable CMS to
determine the proper amount of payment to the Plan. These worksheets accommodate the various
bill processing options described in the Medicare Managed Care Manual (Pub. 100-16, Chapter
17a, §10.2). Therefore, the Plan may not be required to complete all worksheets. The Plan should
confirm the particular reporting requirements applicable to which lines must be completed by
discussing them in detail with the CMS accountant assigned to the Plan. This discussion should
take place prior to the contract period. To avoid any later misunderstanding, the Plan should
submit written confirmation of the conclusions reached to CMS. The Plan must submit all
worksheets. Where appropriate, Plans should enter "NA" on those worksheets that are not used.
The Plan's cost reporting requirements in no way supplant the specific reporting requirements
applicable to providers of services under the Medicare program. Each provider of services,
whether owned or operated by the Plan, must comply with its own cost reporting requirements.
(The Provider Reimbursement Manual, HCFA Pub. 15-II, sets forth these requirements in detail).
The costs and statistics submitted for provider services furnished to enrollees are summaries of
the information set forth in the provider cost reports and/or Bill Summary Report using the
options detailed for Worksheet J.
The following sections explain how to fill out each individual worksheet for each category of
reporting.

FORM CMS 276
2302

WORKSHEET S - CERTIFICATION PAGE

Line 1 - Name and Address of Plan - Enter the name and address including any trade name of
the plan, if applicable.
Line 2 - Reporting Period and Plan Number - Enter the reporting period starting and ending
dates. Enter the Plan identification number.
Line 3a - Type of Report - Identify the type of report you are filing: Budget Forecast, Interim
Report, or Final Cost Report. See Section 2300, for the required worksheets that are filed with
the type of report identified.
Line 3b - Bill Processing Option - Indicate the bill processing option selected by the plan. For a
description of the different options available, refer to Chapter 17a, Subchapter A, Section 10.2 of
the Medicare Managed Care Manual (HCFA Pub 100.16).
Line 3c - Reimbursement Under - Indicate by selecting from the drop down list the appropriate
section of the Social Security Act under which the plan is seeking reimbursement. Section 1876
is for Health Maintenance Organizations and Competitive Medical Plans (HMOs/CMPs).
Section 1833 is for Health Care Prepayment Plans (HCPPs).
Certification Statement - The certification must be prepared and signed after the worksheets
have been completed in their entirety. The individual signing the certification must be an officer
or responsible person authorized to act as an agent of the organization.

FORM CMS 276
2303

WORKSHEET A - BUDGET FORECAST

This worksheet is provided to forecast the allowable Medicare costs per member per month that
will be paid on an interim basis during the period covered by the report. The worksheet uses a
prior year's final cost report, as revised by CMS if applicable, as a basis for establishing
forecasted Medicare costs. If the Plan finds that this worksheet produces results that are not
reflective of the forecasted period, use Column 4 of Part II to make the necessary adjustments to
correlate the financial data to the forecasted period. Adjustments in Column 4 of Part II must be
supported by the worksheet attached. For cost Plans that are new to the Medicare program and
have no historical cost and statistical data as the basis for the current year budget, these Plans
must instead use the final cost report form to project the current year budgeted figures. The
period's budgeted cost and statistical data are entered into the final cost report form to generate
the Medicare interim PMPM amount from Worksheet M. All applicable worksheets must be
filed as required by the instructions for that final cost report form, if used for budget purposes.
Since this form is used by HCPPs, HMOs, and CMPs, not all lines and columns will apply for all
plans. This worksheet is only prepared in the submission of the Budget Forecast. If the prior
year's final cost report submission is delinquent at the due date of the budget, the budget will be
automatically rejected until the final cost report is submitted.
2303.1

Part I - Prior Year Cost & Statistical Data

In the Part I heading, enter the fiscal year-end date from which all of the cost and statistical data
reported in this part are taken. The prior year cost and statistical data must be taken from the
period ending two (2) years prior to the budget period. For example, if the budget forecast is for
the period January 1 through December 31, 2008, the final cost report for the period January 1
through December 31, 2006 will be used. Since the costs entered in columns 1 through 6 are
taken from the final cost report covering the period January 1 through December 31, 2006, the
plan should enter this period in the Part I heading. This final cost report should be used for all
data requested in Part I.
Column and Line Descriptions
Column 1 - Trial Balance Per Books - Enter in this column the Trial Balance Per Books taken
from Worksheet E, Column 1 of the prior year final cost report approved by CMS, plus or minus
Reclassifications from Column 2. Cost data should be grouped using the same method of
groupings used for Medicare costs on that prior year final cost report submitted to CMS. The
amount for Part B Deductible on Services Paid by CMS' Carriers reported on Line 16 of the prior
year final cost report must be included with the amount reported for Nonprovider costs on the
Budget Forecast Line 5. The elements of the Special Administrative Costs reported on Line 26 of
the prior year final cost report must be broken out on Lines 7a thru 7c of the Budget Forecast.
Line 7b - Cost Report Certification - Enter the cost incurred for the independent certified
public accountant to certify the final cost report submitted to CMS according to 42 C.F.R.
§417.576(b)(1). This applies only to 1876 contracts (HMOs and CMPs).

FORM CMS 276
Line 9 - Total Cost - The total cost on this line must equal Column 1, Line 29 on the Worksheet
E of the prior year final cost report.
Column 2 - PMPM Cost - Enter on Line 0 the Total Member Months shown on the prior year
final cost report Worksheet L, Column 5, Line 1. The worksheet formulas divide the cost on each
line in Column 1 by the Total Member Months on Line 0 and the results are entered in this
column, lines as appropriate.
Column_3 - Total Medicare PMPM Cost - The worksheet calculates the sum of Columns 4
plus 5 on the lines as appropriate.
Column 4 - Medicare Part A PMPM Cost - Enter in this column the Medicare Part A cost
PMPM taken from the appropriate lines of Worksheet M, Column 2 of prior year final cost
report.
Line 9 - Total Cost - The total PMPM amount on this line must equal Column 2, Line 7 on the
Worksheet M of the prior year final cost report.
Column_5 - Medicare Part B PMPM Cost - Enter in this column the Medicare Part B cost
PMPM taken from the appropriate lines of Worksheet M, Column 3 of the prior year final cost
report. The following cost centers should be combined on the Budget Forecast:
•
•
•

Part B Deductible on Services Paid by CMS' Carriers reported on Line 5a of the
prior year final cost report must be included with the amount reported for
Nonprovider costs in Column 5 on the Budget Forecast Line 5.
Medicare Bad Debts reported on Line 16 of the prior year final cost report must
be included with the amount reported for Plan Administration costs in Column 5
on the Budget Forecast Line 6.
Part B Costs Not Subject to Coinsurance reported on Line 16a of the prior year
final cost report must be included with the amount reported for Nonprovider costs
in Column 5 on the Budget Forecast Line 5.

The elements of the Special Administrative Costs reported on Line 15 of the prior year final cost
report must be broken out on Lines 7a thru 7c of the Budget Forecast.
Line 9 - Total Cost - The total PMPM amount on this line must equal Column 3, Line 7 plus
Lines 15, 16, and 16a on the Worksheet M of the prior year final cost report.
Column_6 - Medicare Ratio - The worksheet calculates the ratio of the Medicare PMPM
amounts to the total by dividing each line of Column 3 by each line of Column 2. All ratios must
be rounded to 4 decimal places.
Column 7 - Medicare Part A Ratio - The worksheet calculates the ratio of the Medicare Part A
PMPM Cost in Column 4 to the Total Medicare PMPM cost in Column 3. All ratios must be
rounded to 4 decimal places.

FORM CMS 276

2303.2

Part II – Current Year Cost & Statistical Data

This part determines the interim payment rate by applying the ratios developed in Part I to the
projected costs for the period covered by the Budget Forecast Report to derive the estimated
Medicare costs for the period. Projected costs shown in Column 1 of this part should be
classified in the same manner as Column 1 in Part I (including reclassifications) plus expected
Third Party Revenue. The assumption being used in Part II is that the relative ratio of Medicare
costs to total costs should remain fairly constant. Column 4 is provided for those instances where
the relative ratio is expected to vary significantly for a given line item. Adjustments made in
Column 4 must be supported by the attached worksheet.
Column and Line Descriptions
Column_1 - Total Projected Cost - Enter the projected trial balance of expenses for the period
covered by the Budget Forecast Report. The cost data should be grouped using the same method
of groupings used in Part I, Column 1.
Column 2 - Projected PMPM Cost - Enter on Line 0 the Total Member Months projected for
the period that were used in developing the projected trial balance of expenses in Column 1. The
worksheet calculates the projected PMPM cost by dividing the costs in Column 1, lines as
appropriate, by the Total Member Months on Line 0.
Column_3 - Medicare Projected PMPM Cost - The worksheet calculates the Medicare portion
of the total costs PMPM by multiplying the Total Projected PMPM Cost in Column 1 by the
prior period ratio of Medicare cost to total cost from Part I, Column 6, lines as appropriate.
Column 4 - PMPM Adjustment - The plan may adjust the costs calculated in Column 3 for any
amount believed to be necessary to produce a more appropriate Medicare cost per member
month for the budget period. Adjustments can be positive and negative. Due to changing facts
and circumstances, a plan may find it necessary to adjust the Medicare cost for a given period of
time. These PMPM adjustment amounts must be calculated on the supporting worksheet and
brought forward to Column 4 in this Part II. All rational and backup information that verify the
need and amount of the adjustment must be submitted with the Budget Forecast. No adjustment
will be accepted without this documentation.
Column 5 - Adjusted Medicare PMPM Cost - The adjusted Medicare PMPM is calculated in
this column by adding the amounts in Columns 3 plus 4 on the lines as appropriate.
Line 11 - Estimated Deductibles & Coinsurance - The worksheet enters on Line 11 the
amount computed from Part III, Column 1, Line 15 minus Lines 13 and 14.
Line 13 - Pay% - This is the interim PMPM payment rate calculated on the worksheet by
multiplying the total Medicare PMPM cost net of coinsurance and deductible on Column 5, Line
12 by the ratio of the Medicare Part B primary member months to the total Part B member
months from Part IV, Column 2, Line 4.

FORM CMS 276

Column 6 - Medicare Part A PMPM Cost - The Medicare Part A PMPM amounts are
calculated by multiplying the total Medicare PMPM Cost in Column 5 by the prior period
Medicare Part A Ratio determined in Part I, Column 7, on the lines as appropriate.
Line 9 - Third Party Insurer Revenue - The amount to be entered as "Third Party Insurer
Revenue” must be determined by the Plan by multiplying the amount in Column 5 times the
result of dividing the amount on the prior year final cost report Worksheet L, Column 1, Line 16
by Column 3, Line 16. A worksheet must be attached showing this calculation. The "Third Party
Insurer Revenue" is the amount received for those services that are not paid fully by the insurer.
These services pertain to only two categories of services for which Medicare has a secondary
liability: (1) services covered by workers’ compensation; and (2) services covered by auto
medical, no fault, or any liability insurance.
Line 11 - Estimated Deductibles & Coinsurance - The worksheet picks up this amount from
Part III, Column 2, Line 15.
Column 7 - Medicare Part B PMPM Cost - The worksheet calculates the Medicare Part B
PMPM amounts by subtracting the PMPM amounts for Medicare Part A in Column 6 from the
Total Medicare PMPM in Column 5 for each line in Column 7.
Line 11 - Estimated Deductibles & Coinsurance - The worksheet calculates the Part B
Deductible and Coinsurance amount by subtracting the Medicare Part A Deductible and
Coinsurance in Column 6 from the Total Deductible and Coinsurance in Column 5.
2303.3 Part III - Deductible and Coinsurance
Part III is used to calculate the projected Medicare deductible, coinsurance, and co-payment on
covered Medicare benefits incurred by the Plan during the budgeted period.
Line Descriptions
Line 1 - Total Estimated Part A Deductible and Coinsurance - Enter in Column 2 the
budgeted amount for Part A deductible and coinsurance. Attach a worksheet showing how this
amount was determined.
Line 6 - Part B Costs Not Subject to Coinsurance - Enter in column 3 the PMPM amount for
Part B costs not subject to coinsurance; e.g. clinical diagnostic lab according to §1833(a)(2)(D)
of the Social Security Act. A worksheet showing how this amount was determined must be
attached in order to include it in the budget forecast.
These costs must be reported on the budget forecast in order to be allowed on the final cost
report.
Line 8 - Part B Standard Deductible - Enter in Column 3 the Part B Standard Deductible
published by CMS for the budgeted period.

FORM CMS 276

Line 9 - Part B Blood Deductible PMPM - Enter in Column 3 the projected Part B Blood
Deductible PMPM for the budgeted period. Attach a worksheet showing the calculation of this
amount.
Line 10 - Mental Health PMPM - Enter in Column 3 the Mental Health PMPM for the
budgeted period. This is the same type of cost found on Worksheet L, Line 23 of the final cost
report. Attach a worksheet showing the calculation of this amount.
Line 13 - Part B Coinsurance on Carrier Paid Bills PMPM - Enter in Column 3 the Part B
Coinsurance on Carrier Paid Bills PMPM for the budgeted period. This is the same type of cost
found on Worksheet G, Part I, Line 23 of the final cost report. Attach a worksheet showing the
calculation of this amount.
Line 14 - Part B Coinsurance on Intermediary Paid Bills PMPM - Enter in Column 3 the
Part B Coinsurance on Intermediary Paid Bills PMPM for the budgeted period. This is the same
type of cost found on Worksheet G, Part I, Line 24 of the final cost report. Attach a worksheet
showing the calculation of this amount.
2303.4 Part IV - Membership
Part IV is used to report the number of Medicare member months for the budgeted period.
Line Descriptions
Line 1 - Total Medicare Member Months - Enter the total number of Medicare member
months, used to develop the budget, for Part A in Column 1 and for Part B in Column 2.
Line 2 - Medicare Secondary Liability Member Months - The Medicare program is usually
the primary payer for covered Medicare services provided to Medicare members of an
HMO/CMP or an HCPP. However, there are four categories of services for which Medicare is
secondary payer. These are:
(1)
(2)
(3)
(4)

Services covered by worker's compensation;
Services covered by employer group health plans in the case of end-stage renal disease
beneficiaries during a period of up to 36 months;
Services covered by auto medical, no fault, or any liability insurance;
Services covered by employer group health plans in the case of employed beneficiaries
and the dependents of the employed beneficiary

An HMO/CMP or HCPP need not coordinate benefits in situations where the probability of
recovery is highly unlikely or the amount recoverable does not exceed the cost to pursue the
claim. However, no payment will be made to a cost-based Plan for services to the extent that
Medicare is not the primary payer under the provisions of Section 1862 (b) of the Social Security
Act. In addition, no payment can be made for services not covered by Medicare. Therefore, enter

FORM CMS 276
on Line 2 the number of Medicare member months of those beneficiaries the plan has identified
to CMS as a Medicare enrollee that can be classified in categories 2 and 4 above.
2303.5 Part V - Semi Annual-Fluctuations
Part V is provided to develop ratios that will be used in the Plans' Interim Cost Report. The
fluctuation ratio is the ratio of the total projected Medicare PMPM net of estimated deductible
and coinsurance to the total cumulative PMPM for the first 6 months of the contract period. The
ratio calculated by this worksheet in Column 2, Line 3 derives the Medicare PMPM amount in
the Interim Cost Report that is used to establish the Interim Payment Rate. This part must be
completed. Therefore, a submitted Budget Forecast without this part fully completed will be
rejected as unacceptable.
Line Descriptions
Line 3 - Cumulative Estimate of Total Costs PMPM for First Two Quarters - Enter the
Plan's estimate of the total costs (Medicare plus non-Medicare cost) on a per member per month
basis that will be incurred by the plan during the first 6 months of the budget period.
2304

WORKSHEET B - PREMIUM DETERMINATIONS

This worksheet is provided for the HMO/CMP or HCPP to compute any over or under collection
of premiums from the Medicare enrollee and the premium for the Budget Forecast period. All
over collections of premiums must be returned to the Medicare enrollee. The Plan may select,
with prior approval, one of three methods to refund over collections. The three methods are:
1. By a lump sum payment to the enrollee;
2. By a premium adjustment to the individual enrollee's or all enrollees future years’
premiums; or
3. By a combination of premium adjustment and lump sum payment.
Unintentional under collections of premiums will be collected from the Plan’s Medicare
enrollees by an adjustment to its Medicare enrollee’s future premiums. However, the Plan must
collect the under collections through premium adjustments no later than 24 months following the
end of the contract period in which they were due. Intentional under collections of premiums
cannot be recouped by the HMO/CMP or HCPP from the Medicare enrollee.
If the plan decides not to incorporate the under or over collection into the period covered by the
budget forecast, a statement must be attached outlining in detail the method selected by the plan.
Failure to submit this statement would result in CMS deeming all under collections as being
waived by the plan. In addition, in Part II, Line 2, a zero should then be entered.
NOTE:

This worksheet is only to be completed in conjunction with Worksheet A - Budget
Forecast.

2304.1 Part I – Under and Over Collection of Premiums

FORM CMS 276
This Part I determines the premium over and under collections for the prior year used to develop
the budget forecast. This part is used to determine the limit for the amount that may be collected
for premiums for the budget period.
Line Descriptions
NOTE: If the plan maintains its records sufficiently to identify net collections and amounts to be
collected for deductibles and coinsurance applicable to the current reporting period, the
appropriate amount may be entered on Line 7 and omit Lines 1 through 6.
Line 0 - Total Medicare Member Months - Enter the total Medicare member months taken
from the prior year final cost report Worksheet D, Part II, Page 2, Section E, Column 2, Line 1.
The worksheet divides the cost entered on each line in Column 1 by the Total Medicare Member
Months on Line 0 and enters the result in Column 3, lines as appropriate.

Lines 1 and 2 - Enter on the appropriate lines in Column 1 the total amount of actual collections
made, for the prior year's final cost report period, of premiums, dues, and co-payments charged
to Medicare enrollees and to someone on behalf of the Medicare enrollee for all covered
Medicare items and services.
Line 4 - Enter in Column 1 the total charges for premiums, dues, and co-payments related to
Medicare enrollees for months prior to the plan's prior year's final cost report period, but not
collected by the plan before the end of the prior year's final cost report period. This is the
premiums, dues, and co-payments receivable reversal for the prior year's final cost report period.
Line 6 - Enter in Column 1 the total charges for premiums, dues, and co-payments related to
Medicare enrollees for months in the prior year's final cost report period, but not collected by the
plan as of the last day of the prior year's final cost report period. This is the premiums, dues, and
co-payments receivable for the prior year's final cost report period.
Line 8 - Medicare Deductibles and Coinsurance from Cost Report - This section
accumulates the actual total Medicare deductibles and coinsurance incurred by Medicare
enrollees in the prior year's final cost report period for comparison to the premiums and paid by
Medicare enrollees for that period.

Line 8a - Deductible and - Enter in Column 3 the accumulated PMPM Part A deductible and
coinsurance, Part B standard deductible, Part B blood deductible and the mental health copayments reported on the prior year's final cost report Worksheet M, Column 2+3, Sum lines 8
thru 11.
Line 8b - Part B Coinsurance - Enter in Column 3 the PMPM Part B coinsurance taken from
the prior year's final cost report Worksheet M, Column 3, Line 13.

FORM CMS 276
Line 8c - Part B Coinsurance on Services Paid By CMS - Enter in Column 3 the PMPM Part
B coinsurance amounts taken from the prior year's final cost report Worksheet G, Column 2,
Lines 23 + 24 divided by the total Medicare member months reported in Line 0 of Column 2 of
this worksheet.
Line 9 - Voluntary Under Collection for the Period - Enter the amount of voluntary under
collection reported on Worksheet B, Part II, Line 7 of the Budget Forecast applicable to the prior
year's final cost report period. For example, in preparing the Budget Forecast for contract year
2008, the period January 1 through December 31, 2006 is being used as the prior year's final cost
report period. The voluntary under collection determined on the Budget Forecast for the 2006
contract period is obtained from that Budget Forecast.
If the amount on the Budget Forecast applicable to the prior year's final cost report period is less
than zero (0), enter zero (0) on this line.

Line 10 - Under(Over) Collection From Prior Period - Enter the amount of the under/over
collection reported on Worksheet B, Part I, Line 12 of the Budget Forecast applicable to the
period that immediately precedes the current Budget Forecast period. For example, in preparing
the Budget Forecast for contract year 2008, the period January 1 through December 31, 2007 is
the immediate preceding Budget Forecast period. The under/over collection reflected on the
Worksheet B, Part I, Line 12 of the Budget Forecast for the 2007 contract period is entered on
this Line 10.
Any over collection from a prior period should be expressed as a negative number and any under
collection should be expressed as a positive number.

2304.2

Part II - Voluntary Undercollection for Budget Period

All figures entered in this part should represent amounts that will be incurred during the budget
period. The amount on Line 6 represents the monthly PMPM amount the plan intends to charge
Medicare enrollees.
Line Descriptions
Line 6 - Total Amount to be Charged Including Medicare Enrollee - Enter the PMPM
amount the Plan intends to charge. A worksheet must be attached to support the determination of
the amount. This worksheet must segregate the total amounts to be charged Medicare enrollees
for covered services into two categories: 1) the monthly premium per Medicare enrollee for
covered services, and 2) the average actuarial value of all deductibles, coinsurance, and copayments for covered services to be charged each Medicare enrollee each month. This included
Medicare enrollee co-payments collected by someone other than the plan (e.g. co-payments
collected for a doctor office visit by the physician's office).

FORM CMS 276

2305

WORKSHEET C - INTERIM REPORTING

In accordance with 42 C.F.R. 417.572(c)(1), an HMO or CMP must submit an interim cost report
on a quarterly basis in the form and detail prescribed by CMS. These quarterly interim cost
reports must be submitted no later than 60 days after the close of each quarter of the contract
period. Under subsection 42 C.F.R. 417.572 (c)(2) CMS may reduce the frequency of the reports
if CMS determines there is good cause for doing so.
Under 42 C.F.R.417.808(c), an HCPP must submit an interim cost report and enrollment data in
the form and detail prescribed by CMS applicable to the first 6 months of the contract period.
The interim cost report must be submitted no later than 45 days after the close of the first 6month period.
Each interim cost report must be submitted using this Worksheet C and the Worksheet S
indicating in Section 3 this is an interim report. These worksheets must be used by all HMOs,
CMPs and HCPPs in order to fulfill their requirement to submit interim cost reports.
The objective for submitting interim reports is to avoid having excessive balances due to or from
the plan at the end of the reporting period. For HMO and CMP, the final interim cost report for
the 12-month period of the contract must be filed on Worksheet S and D through M; the same
worksheets for the final cost report submission.
2305.1

Part I - Costs

All amounts entered in this part must be YTD cumulative amounts for the period being reported
on. If the Plan is aware of circumstances that will likely occur and will have a material impact on
costs after the interim reporting period, an adjustment should be made to reflect the estimated
impact of this change on the interim per capita rate. Workpapers supporting the estimation of the
impact adjustment must be submitted with the interim cost report; otherwise the adjustment will
not be allowed.
Line Descriptions
Lines 1 through 8 - The amounts entered are actual amounts incurred in the interim reporting
period. The trial balance underlying the amounts on these lines and showing the grouping of
individual expense items into each cost center must be submitted with the interim cost report.
Line 9 - This line accumulates the actual total costs reported on Lines 1 through 8.
Line 10 - Cost per Member Month - The worksheet calculates the total per member month
amount by dividing the total cost on Line 9 by the total member months in Part II, Line 1.
Line 11 - Ratio From Budget Forecast - Enter on this line the amount reflected on the Budget
Forecast for the contract period on Worksheet A, Part V, Column 2, Line 3.

FORM CMS 276
Line 12 - Medicare Costs - This is the Medicare PMPM amount calculated on the worksheet by
multiplying the Total Cost PMPM amount on Line 10 by the Medicare ratio on Line 11.
Line 13 - Payment Rate - This is the Medicare primary payment rate calculated on the
worksheet by multiplying the Medicare PMPM amount on Line 12 by the ratio of Medicare
primary member month to the total Medicare member months in Part II, Line 5.
Line 14 - Current Payment Rate - Enter the current Medicare PMPM payment rate on this line.
2305.2 Part II - Membership
Member month amounts reported on these lines should reflect cumulative member months for
the period covered by the report. A member month is defined as each month a person is a
member of the plan. For example, if a Medicare beneficiary was a member of the plan for the 6month period covered by the interim cost report, the plan would report a total of 6 Medicare
member months.

Line Descriptions
Line 1 - Total Member Months - Enter the total Medicare and non-Medicare member months
on this line.
Line 2 - Total Medicare Member Months - Enter on this line the information requested for
those Medicare enrollees that are enrolled in the Supplemental Medicare Insurance (Part B)
Program under Medicare. Part B Member Months should always equal Total Medicare Member
Months.

Line 3 - Medicare Member Months (Secondary) - The Medicare program is usually the
primary payer for covered Medicare services provided to Medicare members of an HMO/CMP
or an HCPP. However, there are four categories of services for which Medicare is secondary
payer. These are:
(1)
(2)
(3)
(4)

FORM CMS 276
on Line 3 the number of Medicare member months of those beneficiaries the plan has identified
to CMS as a Medicare enrollee that can be classified in categories 2 and 4 above.
Line 4 - Medicare Member Months (Primary) - The worksheet calculates the Medicare
primary member months by subtracting the Medicare secondary member months on Line 3 from
the total Medicare member months on Line 2.
Line 5 - Ratio - The worksheet calculates on this line the ratio of Medicare primary member
months to the total Medicare member months. This ratio is used in Part I to determine the
Medicare primary payment rate for the period being reported.
2306 WORKSHEET D - PLAN STATISTICS
In accordance with 42 C.F.R. 417.576, an HMO or CMP must submit an independently certified
cost report and supporting documents to CMS no later than 180 days after the end of each
contract period in the form and detail prescribed by CMS.
Under 42 C.F.R.417.810, a HCPP must submit to CMS for final settlement an annual cost report
and supporting documentation in the form and detail prescribed by CMS no later than 120 days
after the end of the contract period.
This Worksheet D and the Worksheet S indicating in Section 3a this is a final cost report along
with all subsequent Worksheets E through N (where applicable) must be included with the final
cost report.
This Worksheet D is provided for HMO/CMPs and HCPPs to list the providers and suppliers that
are frequently used by the plan.
2306.1 Part I - Plan Statistics - List Of Providers
This worksheet is provided for only HMOs/CMPs to list the providers that are frequently used by
the plan. HCPPs do not complete this worksheet since their reimbursement is limited to the
reasonable cost of non-provider services covered under Part B of the Social Security Act.
Therefore, HCPPs should mark Line 1 with N/A. HMOs/CMPs with bill processing option #1
reported in Worksheet S, Section 3b do not complete Sections A (Hospitals and SNFs) and B
(HHA’s and Other).
Column Descriptions
For the category descriptions below the "LIST OF PROVIDERS" column for plans with bill
processing option #2 only, list all hospitals and skilled nursing facilities rendering services to the
plan's Medicare enrollees under category "A. HOSPITALS & SNFS”. List all Home Health
Agencies under category “B. HHA” and all others (specifying Name & Type) under category “C
OTHER (SPECIFY NAME AND TYPE)" on the continuation age of Part I - Plan Statistics "LIST OF PROVIDERS."

FORM CMS 276
Column_1 – Provider Number - Enter the Medicare provider billing number assigned to the
provider.
Column 2 – Relationship - Enter the relationship code for that provider. If the provider is
owned or controlled by the plan or if the plan is owned or controlled by the provider, enter the
code "O” For a full description of Medicare's rules defining “ownership” or "control", refer to
the Provider Reimbursement Manual (HCFA PUB 15-I) Chapter 10. Where the code “O” is
entered, the Worksheet H, Section A. must be answered “Yes.” If there is no relationship
between the plan and the provider other than contractual, enter the code “P”.
Column_3 – Bills Processed By - Enter the code (“H” or “P”) representing the bill processing
option selected by the plan. If the plan has elected to process the bills of the provider, enter the
code “P”. If the plan has elected to have CMS process the bills of the provider, enter the code
“H”. This coding must be consistent with that reported In Section 3b on Worksheet S. For a
description of the different options available, refer to Chapter 17a, Subchapter A, Section 10.2 of
the Medicare Managed Care Manual (HCFA Pub 100.16).
Column 4 – Total Days - For category A, "Hospitals & SNFs", enter the total number of
inpatient days used by all enrolled plan members. This figure should include all of the days used
whether or not the plan has been billed by the provider due to timing delays. For categories B
and C, enter the total statistical unit for all enrolled plan members used to apportion the costs of
that provider type.
Column 5 – Total Medicare - For category A, "Hospitals & SNFs", enter the total number of
inpatient days for all Medicare enrollees. For categories B and C, enter the total applicable
statistical units for all Medicare enrollees.
Column 6 – Medicare Primary - The Medicare program is usually the primary payer for
covered Medicare services provided to Medicare members of an HMO/CMP. However, there are
four categories of services for which Medicare is secondary payer. These are:
(1)
(2)
(3)
(4)

services covered by workers’ compensation;
services covered by employer group health plans in the case of end-stage renal disease
beneficiaries during a period of up to 12 months;
services covered by auto medical, no fault, or any liability insurance; and
services covered by employer group health plans in the case of employed beneficiaries
and the dependents of the employed beneficiary.

An HMO/CMP need not coordinate benefits in situations where the probability of recovery is
highly unlikely or the amount recoverable does not exceed the cost to pursue the claim.
However, no payment will be made to a cost-based HMO/CMP for services to the extent that
Medicare is not the primary payer under the provisions of Section 1862 (b) of the Social Security
Act. In addition, no payment can be made for services not covered by Medicare.
Therefore, enter in Column 6 the number of days or statistical units used by Medicare enrollees
for which Medicare has primary liability and the days or statistical units that are covered by the

FORM CMS 276
Medicare program. Make certain to include in this column services covered by employer groups
(categories 2 and 4). The cost of these services will be removed through the apportionment on
Worksheets K, L and M.
Column 7 – Medicare Secondary - Enter only those inpatient days or statistical units for which
Medicare has no liability for categories 1 and 3 mentioned above. Refer to Chapter 17,
Subchapter B, Sections 310 through 350, and Subchapter F, Section 70 of the CMS Managed
Care Manual Pub #100-16 for a detailed discussion of the coordination of benefits provisions
under Medicare. Non-covered services should not be included in Column 7. Therefore, the
addition of Column 6 plus Column 7 will be less than Column 5 by the number of non-covered
inpatient days or statistical units used by the Medicare enrollee.
There are circumstances where plans are able to isolate the costs and statistical units of noncovered services and/or those services for which Medicare is secondary payer. The plan may
elect to exclude those statistical units from the total on Worksheet D, Part I, Column 4 and the
costs associated with them from total costs on Worksheet E through adjustments on Worksheet
G.
If that election is made then it must be disclosed in the footnotes to the HMO/CMP certified cost
report. Where this occurs, Columns 5 and 6 on these Worksheets will be the same amount and
there will be no entry in Column 7.
2306.2 Part II - Plan Statistics – List Of Suppliers
This worksheet is provided for all plans, including HCPPs, to list the suppliers that are frequently
used by the plan's membership. The column headings for Columns 4 through 7 are the same as
those for the "LIST OF PROVIDERS" (see § 2306.1 above).
Line Description
For the category descriptions below "LIST OF SUPPLIERS", list all suppliers of health services
rendering services to the plan's Medicare enrollees as follows:
Category A -Physician Services
Category B -Certified Labs
Category C -X-ray units
Category D -Others (Specify Type)
All related suppliers should be identified by placing an “R” next to its name.
Column Descriptions
Column 1 – Type of Group - Enter the type of supplier that can be grouped by using the
following codes:
A=
B=

IPA
Group Practice

FORM CMS 276
C=
C=

Staff *
Individual Practitioners**
* All services rendered by the staff of the plan should be grouped on one line in each
category (if necessary) and identified as either "staff" or "clinic".
** All individual practitioners should be grouped on one line in each category and
identified as "Individual Practitioners”.

Column 2 – Payment Mechanism and Column 3 – How Physicians Paid - For each supplier
listed, identify the method the plan is paying the supplier (Column 2) and the method the
supplier is paying physicians (Column 3). Use the following codes:
"A” for fee-for-service payments
"B" for capitation payments
"C" for other methods - specify the type of method being used
For Column 3 only, use “D" when the plan is an HCPP, a physician group pays its physicians
on a fee-for-service basis, and an exception to the Subpart E limits has been granted. The
exception would be granted under 42 C.F.R. 417.802 after CMS has determined that the
Physician Group has an agreement that includes acceptance by its members, to effective
incentives designed to avoid unnecessary or unduly costly utilization of health services. A copy
of the determination letter must be attached to Worksheet D.
For Column 4 only, The plan should have indicated whether CMS has determined that the
physician group has an agreement, which includes acceptance by its members, to effective
incentives designed to avoid unnecessary or unduly costly utilization of health services. A copy
of the determination letter should be attached to this Worksheet D and Column 4 for that
physician group should not be completed.
Column Descriptions - For Category E. Membership
Column_1- Medicare Part A - Enter the information requested for those Medicare enrollees
that are eligible to receive payment for covered services under Part A of the Medicare Program.
Column 2 – Medicare Part B - Enter the information requested for those Medicare enrollees
that are enrolled in the Supplemental Medicare Insurance (Part B) Program under Medicare. Part
B Member Months should always equal Total Medicare Member Months.
Line Descriptions - For Category E. Membership
Line 1 – Total Medicare Member Months - Enter in the appropriate column Medicare enrollee
member months. A member month is defined as each month a person is a member of the plan.
For example, if a Medicare beneficiary was a member of the plan for the twelve month period
covered by the report, the plan would report a total of 12 Medicare member months for that
individual.

FORM CMS 276

Line 2 – Medicare Secondary Liable (Employee Groups) Member Months - Enter the
number of member months of Medicare enrollees who are members of an employer group and
Medicare is secondarily liable for their services. These are the Medicare member months
associated with Categories (2) and (4) described above in Section 2306.1 Part I - Plan Statistics List Of Providers for the Column 6 description.
Line 3 – Medicare Primary Member Month - The worksheet calculates the Medicare primary
member months by subtracting the Medicare secondary liable member months on Line 2 from
the total Medicare member months on Line 1 for each column.
Line 4 - Ratio – The worksheet calculates the ratio of the Medicare primary member months to
total Medicare member months by dividing Line 3 by Line, 1. All Ratios must be reported to
four decimal places.
2307 WORKSHEET E - SUMMARY TRIAL BALANCE
This worksheet is provided to:
•
•
•

Record the operating expenses of the Plan according to Generally Accepted Accounting
Principles,
Summarize reclassification and adjustments of expenses in accordance with the Medicare
Principles of Reimbursement, and
Establish the ful1 cost of services for Medicare apportionment after reclassification into the
appropriate cost center..

The necessary reclassifications and adjustments needed for certain accounts detailed and
summarized on Worksheets F and G are brought forward to this worksheet. The allocation of
Administrative and General (A & G) costs on Worksheet I are brought forward to this worksheet
after the reclassifications and adjustments are made. Cost allocations are made in this cost report
in two steps:
1. Functional allocations to cost centers
2. Pool allocation of remaining A & G costs
* Direct allocations may also be accomplished but must be made as prescribed in Section 2307
A. of the Provider Reimbursement Manual (HCFA PUB 15-I).
The cost centers on this worksheet are listed in a manner to facilitate the transfer of costs to
subsequent worksheets. Column 7 displays the worksheet and line number reference to which
each entry in Column 6 is transferred. Not all of the cost centers will apply to all plans.
Column and Line Descriptions
Column 1 – Trial Balance - Enter on the appropriate lines the total costs the plan incurred
during the reporting period. These costs that are entered must agree with the plan's audited

FORM CMS 276
accounting records maintained under Generally Accepted Accounting Principles without any
adjustments.
The plan must maintain a worksheet that groups costs from the audited trial balance of expenses
to the various cost centers on this worksheet. Any needed reclassifications, adjustments and
allocations must be recorded in Columns 2, 3, and/or 5, as appropriate.
Column 2 – Reclassifications (Wkst F) - Reclassification made among the cost centers in
Column 1 which are needed to affect proper cost allocations are brought forward from the
summary on Worksheet F, Page 5. The Worksheet F series has been provided to help the plans
complete the reclassifications needed which affect the appropriate cost centers. Reductions to
cost centers should be shown in brackets ( ).
The net total of the entries in Column 2 must equal zero on Line 29.
Column 3 – Adjustments (Wkst G) – The adjustments summarized on Worksheet G, Part I are
brought forward to the appropriate lines in Column 3.
The amounts of any adjustments are those needed to determine allowable costs for
apportionment under the Medicare Principles of Reimbursement. The Worksheet G series and
Worksheet H (if applicable) are provided to help the plans to complete the proper adjustments to
the costs recorded in Column 1 in accordance with the Medicare Principles of Reimbursement.
Column_4 – Allowable Costs – The cost report calculates adjustments to Column 1 made in
Columns 2 and 3 and enters the net balance to Column 4.
Column 5 – A&G Allocation (Wkst I, Part I) – The cost report brings forward the amounts
resulting from the allocation of Administrative and General Costs shown on Line 28 Column 4
from the Worksheet I, Part I. Worksheet I is provided to allocate A & G costs to those cost
centers receiving a benefit from the A&G costs. Reductions to cost centers must be shown in
brackets ( ). The net total of the entries on Column 5 must equal zero on Line 29.
Column 6 – Totals – The allocated A&G costs in Column 5 are adjusted to the amounts in
Column 4 and extend to Column 6.
Lines 1 and 2 – Inpatient and Outpatient Hospital - Enter on these lines the costs incurred by
the plan, and reflected in the accounting records, for services furnished through a Hospital. Only
Plans electing billing option #1 in section 3(b) on Worksheet S, may use these forms. Those
Plans electing Billing Option 2 must use the CMS alternative Worksheets E through M.
Instructions for these Option 2 alternative worksheets are included as Appendix A.
Lines 3 and 4 – Other Provider Costs - Enter on the appropriate lines the cost of services
incurred by the plan, and reflected in the accounting records, for services furnished through a
Skilled Nursing Facility or Home Health Agency. Adjustments on Worksheet G must be made to
Lines 3 and 4 that include those necessary to remove the cost of non-covered services and the
cost of services to non-Medicare patients. As a result of these adjustments, only the reimbursable
portion of Skilled Nursing Facility or Home Health Agency services will be reflected in Column
4 and will flow to Worksheet J from Column 6 after cost finding.

FORM CMS 276

Lines 5 thru 13 – Non-Provider Costs - Enter on the appropriate lines the cost of services
incurred by the plan, and reflected in the accounting records, for services furnished by a non-provider. Separate lines are provided for the different types of suppliers of services. Services
may be furnished by the plan through its own employees, under arrangements with related and/or
unrelated parties, or a combination of both. Payment arrangements with each non-provider type
and/or service arrangement may vary. If this occurs and the plan has approval from CMS to
fragment the apportionment for a specific type(s) of payment and/or service arrangement on
Worksheet K, then these lines must be subscripted for each of the specific type of payment
and/or service arrangement consistent with those on Worksheet K.
Line 14 - Emergency-Urgently Needed Services - Enter the costs of services furnished in an
emergency or urgently needed situation that were provided out-of-plan on an infrequent basis.
Services of this type that were furnished by in-plan providers or suppliers would be entered on
Lines 1 through 13, as appropriate.
The cost of those services that would be entered on Lines 1 through 13 but were furnished
out-of-plan in an emergency or urgently needed situation will be recorded on this line.
Line 15 – Mental Health Services - Enter on Line 15 the cost of both the professional and
non-professional components of mental health services. The amount in Column 6 will be entered
on Worksheet K, Lines 19 and 20 in the amounts for professional and non-professional
components respectively. The professional component amount determined on Worksheet K
transfers to Worksheet L where the 37.5% co-payment will be calculated.
Note: Claims involving outpatient psychiatric services should no longer be processed by the
carrier.
Line 16 – Deductible and Coinsurance Paid by MAC/Carrier/Intermediary - From time to
time, bills for Part B services for which the plan has responsibility are processed by the CMS
MAC/Carrier/Intermediary. In addition, certain services must be billed to the
MAC/Carrier/Intermediary (see Section 6101.2 of HCFA PUB 75). Line 16 is provided for the
plan to enter the deductible and coinsurance amounts paid by the plan for those services
processed through the MAC/Carrier/Intermediary. The Adjustment in Column 3 is made to
eliminate the amount of Part B coinsurance included in these costs. Entries in Column 6 will be
brought forward to Worksheet L.
Line 17 – Medicare Bad Debts - Enter in Column 1 the total bad debt expense recorded in the
records. The bad debt adjustment on Worksheet G should result in the Allowable Medicare Bad
Debts (net of bad debt recoveries) for premiums, dues, and co-payments charged to Medicare
enrollees being reflected in Column 4. The amount of allowable bad debts for a Medicare
enrollee may not exceed three times the monthly rate (or its equivalent if the premium is payable
on other than a monthly basis) for the actuarial value of the deductible and coinsurance amounts.
Any allowable bad debts claimed on a cost report submitted by a provider or other facility
reimbursed on a cost-based may not be claimed as a bad debt by the plan. See the CMS Managed
Care Manual Pub #100-16, Chapter 17, Subchapter B, Section 220.1 for further discussion on
Bad Debts.

FORM CMS 276

Line 18 - Blood Deductible - Enter the amount of the beneficiary's share of the cost for the first
three pints of blood, if not replaced.
Line 19 through 23 - These lines are provided for the reporting of costs of any other provider or
supplier of health services rendering services to the plan's membership that are not reflected in
Lines 1 through 18. The type of organization paid and the kind of services rendered must be
entered in the far left column.
Non-reimbursable services must also be entered on these lines in order to receive their fair share
of cost finding on Worksheet I. Entries in Column 6 for reimbursable services will be brought to
Worksheet J or Worksheet K, as appropriate.
Line 25 – Plan Administration - These costs benefit the total enrolled population of the plan
and have no relationship to medical care or services.
Plan administration includes the total costs incurred for enrollment, marketing, membership,
plan administration and the following types of costs:
o
o
o
o
o
o
o
o
o
o
o
o
o

Directors’ salaries
Executive and staff administrative salaries
Organizational management costs
Organizational costs
The cost of preparing budgets and budget analyses
Management information systems
Research and development to expand the HMO
Feasibility studies
Studies conducted on utilization
Grant and loan applications
Grant and loan administration
Actuarial studies
Any other costs incurred for the benefit of the entire enrolled population

Entries in Column 6 will be brought to Worksheet L, Line 3.
Line 26 – Special Administrative Costs - Enter the special Medicare Program costs which are
fully reimbursable by the program as described in the Medicare Managed Care Manual Pub
#100-16, Chapter 17, Subchapter B, Section 200. These costs include:
1.
2.
3.

The reasonable cost of reporting Medicare beneficiary enrollment accretion and
deletion data.
The reasonable cost incurred solely for the purpose of independently certifying the
Medicare cost report of the HMO/CMP.
The reasonable cost of special data required from HMO/CMPs by Medicare solely
for program evaluation and planning purposes specifically requested and approved
by CMS.

FORM CMS 276
Prior approval of special administration costs is required through inclusion of such costs in the
annual budget forecast. Entries in Column 6 will be brought to Worksheet L, Line 6.
Line 28 – Administrative & General Costs – Enter on this line all other Administrative and
General costs not included on Lines 25 and 26 above. These costs generally bear a significant
relationship to services furnished by the plan. Include only those costs which are necessary and
proper to the efficient management of all services. All costs that do not pertain to the health plan
or are non-allowable must be adjusted out in Column 3. As a result of the cost finding that occurs
on Worksheet I and is brought forward to this Worksheet in Column 5, the amount in Column 6
for this line must equal zero.
2308 WORKSHEET F - RECLASSIFICATIONS
This worksheet provides for the reclassification of costs reported on Worksheet E to the
appropriate cost centers. These reclassifications are necessary for subsequent allocations and
apportionments. Review Section 2307 for the description of possible A & G allocations for
inclusion as items of reclassification. Direct allocations should be made to those cost centers
actually benefiting from the cost.
Worksheet F should be completed only to the extent that costs are not included in the proper cost
centers.
Submit with the cost report, copies of any work papers used to compute the reclassifications
affected on this worksheet.
Column Descriptions
Enter the explanation of the reclassification.
Column 1 - Enter a letter (A, B, etc) on each line used in Column 2 to identify each
reclassification entry.
Explain the reason for the reclassification entry just to the left of Column 1. If more than one
cost item is being reclassified, the plan should identify each item reclassified.
Column 2 - All cost centers being adjusted should be identified in this column. The names of
these cost centers should correspond to the names used on Worksheet E.
Column 3 - List the line number from Worksheet E for each cost center identified in Column 2
of this worksheet.
Columns 4 and 5 - These columns are provided to record the amount of increase (Column 4) or
decrease (Column 5) for each cost center listed in Column 2.
Examples of the six most common reclassification are as follows:

FORM CMS 276
1. Special Administrative costs must be removed from the Administrative and General cost
center. An adjustment should be made to increase Line 26 of Worksheet E and a
corresponding adjustment to decrease Line 28 of Worksheet E. (See Instructions for
Worksheet E, Line 26 for definition of Special Administrative Cost)
2. Certain insurance costs must be removed from the A & G cost center and placed in the cost
centers benefiting from these costs. Malpractice insurance should be allocated to the various
service components of the plan based on quotes from the plan's insurance company.
For example, if the plan's insurance company states that 50 percent of the malpractice insurance
premiums are for insuring the plan against claims arising out of inpatient hospital services,
then the plan must allocate 50 percent of the insurance to Inpatient Hospital (line 1 of
Worksheet E).
3. Space cost should be reallocated to the cost centers occupying the space.
4. Reclassify interest expenses to the cost centers benefiting from the loan for which interest is
incurred. Some plans may prefer to have interest in the A & G cost centers due to further
needed adjustments on Worksheet G for investment income.
5. Marketing, Membership, and Enrollment costs should be reclassified to Plan Administration.
6. All other Plan Administration type of costs should be reclassified from Administrative and
General to Plan Administration. These costs would include, but are not limited to, grievance
procedures, actuarial costs and any other A & G costs that benefit the entire population. (See
Section 2307 for more detailed descriptions).
Line Descriptions
Lines 1 through 50; 54-109, 111-166 and 168-223 - Enter on these lines the reclassification
entries. All explanations of reclassification entries and related cost center increases and decreases
must be completed on the page the entry began on.
Line 39 - Columns 4 and 5 must equal for all entries made on Lines 1 through 36. For those
health plans requiring more than one (1) page of entry, duplicate a blank copy of Worksheet F
and complete the information on the additional pages.

2309 WORKSHEET G - ADJUSTMENTS TO EXPENSES
2309.1

WORKSHEET G, PART I - ADJUSTMENT TO EXPENSES

This worksheet provides for adjustments to the cost centers listed on Worksheet E. These
adjustments, which are required under the Medicare Principles of Reimbursement, are to be
made on the basis of "cost" or "amount received." Enter the total "amount received" (revenue),
only if the cost (including direct cost and all applicable overhead) cannot be determined;
otherwise enter the "cost."

FORM CMS 276
Once an adjustment to an expense is made on the basis of "cost," the plan may not in future cost
reporting periods determine the required adjustment to the expense on the basis of "revenue."
The following symbols are to be entered in Column 1 to indicate the basis for adjustment: "A”
for cost; and "B" for amount received. Line description indicate the more common activities
which affect allowable costs, or result in costs incurred for reasons other than patient care and
thus, require adjustments.
Types of items to be entered on Worksheet G are: (1) those needed to adjust expenses to reflect
actual expenses incurred; (2) those items which constitute recovery of expenses through sales,
charges, fees, grants, gifts, etc.; (3) those items needed to adjust expenses in accordance with the
Medicare Principles of Reimbursement; and (4) those needed to reduce the plan's costs for
medical and other health care services to reasonable amounts.
Where an adjustment to an expense affects more than one cost center, the plan should either (1)
record the adjustment to each cost center on a separate line on Worksheet G, or (2) enter the total
adjustment on line as appropriate and attach a supporting worksheet showing the required
adjustments to the various cost centers affected. In this latter situation, enter on the appropriate
line in Column 1, the words "Supporting Worksheet Attached." With respect to Line 10,
Worksheet H is supporting documentation for any required entry.
Column Descriptions
Columns 3 and 4 - Indicate the cost center title and line number of Worksheet E to which the
adjustments are to be made.
Line Descriptions
Line 1 - Investment income on restricted and unrestricted funds which are commingled with
other funds must be applied against, but should not exceed, the total interest included in
allowable costs.
The investment income on restricted and unrestricted funds which are commingled with other
funds should be applied against the appropriate cost centers on the basis of the ratio that interest
expense charged to each cost center bears to the total interest expense charged to all of the plan's
cost centers.

Lines 2 thru 7, 9. and 11 thru 18 - Enter on these lines any additional adjustments required by
the Medicare Principles of Reimbursement. Explanations of the necessary adjustments can be
found in the HCFA Pub. 15-I.
Line 8 - Enter the allowable home office costs which have been allocated to the plan. Additional
lines should be used to the extent that various plan cost centers are affected.

FORM CMS 276
Line 19 - Enter the cash received from imposition of interest, finance or penalty charges on
overdue receivables. This income must be used to offset the cost of the cost center to which the
charges apply.
Line 20 - Enter the payments received from physicians who assume the operating costs of a
hospital department.
Line 21 - Enter the amount of any contributions to a risk pool that is not going to be distributed
one year after the close of the plan's reporting period.
Line 22 - For those HCPPs that are limited in reimbursement to the carrier screens, enter the
amount of payments made to suppliers of health care that exceed the Medicare charge screens
under Subpart E of the Medicare regulations. These amounts may be entered here with attached
detail worksheets or on Worksheet K.
Line 23 - Enter on this line the Part B coinsurance the plan paid for those services processed by
CMS' carriers for those services rendered to the plan's population that are the responsibility of
the plan. See instructions to Line 16, Worksheet E.
Line 24 - Enter on this line the Part B coinsurance the plan paid for those services processed by
CMS’ intermediaries for services rendered to the plan's population that are the responsibility of
the plan. This entry is used to adjust coinsurance costs entered in Worksheet E Lines 1, 2, and 3
where the HMO/CMP elected to have CMS process the bill.
Line 25 - This line is provided for those plans that have paid for physical therapy services.
Worksheet A-8-3 of the Hospital cost report Form HCFA-2552 must be submitted to have any
physical therapy costs allowed. For further instructions on the type of adjustment needed, refer to
HCFA PUB 15-1 Chapter 4
Line 26 - the plan should enter all types of reinsurance including stop loss insurance. These costs
are not allowable.
Line 27 - Where depreciation expense computed in accordance with the Medicare Principles of
Reimbursement differs from depreciation expense per the plan's books, enter the difference on
line 27; e.g., such difference could be due to the provider using the optional allowance for
depreciation or non-approved accelerated methods.
Line 28 - Enter the cost incurred for non-covered purchased services. This line should be used if
the remaining purchased services are to be apportioned on a basis that would not eliminate these
service costs.
Line 29 - Use this line to adjust cost claimed to allowable Medicare Bad Debts described in
Worksheet L. (Refer to instructions for Worksheet L, Line 9 for allowability of Medicare Bad
Debts.)

FORM CMS 276
Lines 30 thru 49; 53-107;108-162 & 163-217 - Enter any other adjustments not listed on Lines
1 through 29 and attached supporting worksheets where applicable.
Line 52 Total - Columns 4 and 5 must equal for all entries.

2309.2

WORKSHEET G. PART II - SUMMARY OF ADJUSTMENTS

This part is provided for the plans to summarize all adjustments included in Part I.
COLUMN DESCRIPTIONS
Cost Center - The cost centers provided are the same cost centers used on Worksheet E.
Column 1 - Enter all line numbers for which you are summarizing an amount in Column 2.
Column 2 - Enter the sum of the amounts from Part I, lines as indicated in Column 1. Both
negative and positive amounts may be added together. If the sum of the amounts is a negative
number, enter the amount in brackets ( ).
Column 3- Enter in this column the cost center to which the amounts in Column 2 are to be
transferred to Worksheet E.
Column 4 - Enter in this column the line numbers to which the amounts in Column 2 are to be
transferred to Worksheet E.

2310

WORKSHEET H - STATEMENT OF COSTS OF SERVICES FROM RELATED
ORGANIZATIONS

This worksheet provides for the computation of any needed adjustments to costs applicable to
services, facilities, and supplies furnished to the plan by organizations related to the plan by
common ownership or control. In addition, certain information concerning the related
organizations with which the plan has transacted business should be shown.
Part A - Must be completed by all plans. If the answer to Part A is "yes", Parts B and C must also
be completed and submitted with the cost report. If the answer to Part A is "no", no other parts
need be completed.
Part B - Cost applicable to services, facilities, and supplies furnished to the plan by organizations
related to the plan by common ownership or control are includable in the allowable cost of the
plan at the cost to the related organization. However, such costs must not exceed the amount a
prudent and cost-conscious buyer would pay for comparable services, facilities, or supplies that
could be purchased elsewhere. Transfer the amount in Column 5, Line 10 to Worksheet G, Part I,
Column 2, Line 10.

FORM CMS 276
Part C - This part is used to show the interrelationship of the plan to organizations furnishing
services, facilities, or supplies to the plan. The requested data relative to all individual,
partnerships, corporations, or other common ownership having either a related interest to the
plan, a common ownership of the plan, or control over the plan, must be shown in Columns 1
through 6, as appropriate.
HCFA Form-1513 may be substituted for this part.
Only those columns which are pertinent to the type of relationship which exists should be
completed.
Column Descriptions
Column 1 - Enter the appropriate symbol which describes the interrelationship of the plan to the
related organization.
Column 2 - If the symbol A, D, E, F, or G, as appropriate, is entered in Column 1, enter the
name of the related individual in Column 2.

2311 WORKSHEET I - ALLOCATION-AND STATISTICS FOR A & G ALLOCATION
This worksheet is used to allocate those remaining A & G costs on Line 28 Column 4 of
Worksheet E. Allocation statistics will be placed on Part II. Each cost item identified will be
allocated to the various cost centers by using the unit cost multiplier technique.
Part II will be used to accumulate the statistics that will be used to allocate the costs on Part I. A
unit cost multiplier will be developed by dividing the cost to be allocated by the total statistics of
those costs. In reality the unit cost multiplier is nothing more than the amount of cost dollars per
unit of statistic. Cost figures for each line of Worksheet E will be computed by multiplying the
unit cost multiplier by the statistics in Part II on a line-by-line basis.
Please note A & G is not to be allocated to special administration and plan administration.
2311.1
WORKSHEET I, PART I - ADMINISTRATIVE AND GENERAL
COST-ALLOCATION
Enter on this part the allocated costs computed using the unit cost multiplier technique described
briefly above and in more detail below. Columns 1 through 4 represent those costs that can be
allocated using a functional allocation. If statistics are not available, then these cost items should
be allocated using the pool allocation in Column 6, and Columns 1 through 4 should be
annotated with "Statistics not available."
Sum Columns 1 through 4 and place the result in Column 5. This column will be used on Part II
to properly allocate all remaining A & G using the pool allocation.

FORM CMS 276
The figures developed for Column 7 should be transferred to Worksheet E, Column 5, lines as
appropriate.
2311.2

WORKSHEET I, PART II - ADMINISTRATIVE AND GENERAL STATISTICS

The allocation bases indicated in the column headings are accepted and recommended bases for
the allocating of costs to the benefiting cost centers. If other bases are desired, the plan must seek
approval from CMS to use any other bases. Requests for a change in method from the most
recent prior year must be submitted to CMS 90 days prior to the beginning of the period for
which the change is to apply.
Enter the total statistics on Line 29 and the statistics for each cost center. Assure that the sum of
the statistics on Lines 1 through 23, 25, and 26 equals the amount placed on Line 29. Determine
the unit cost multiplier for each column (1 through 4 and 7) by dividing the total cost to be
allocated on Line 30 by the total statistics on Line 29.
For example, if the total costs to be allocated are $50,000 (Line 23) and the total statistical units
being used to allocate that cost are 75,000 units (Line 25), then the unit cost multiplier would be
.6667 (50,000/75,000.carried to 4 decimal places). If the number of statistical units that were
properly allocated to Inpatient Hospital are 30,000 units (Line 1), the entry for Part I, Line 1,
would be $20,001 (30,000 x . 6667).
2312 WORKSHEET J - SUMMARY OF PROVIDER COSTS
The worksheet is specifically designed for HMOs/CMPs to report provider costs paid by the
HMO/CMP. An HMO/CMP may elect under option 1 for CMS to process the bills for services
rendered by hospitals, SNFs and HHAs. This election is made prior to the beginning of a contract
year in writing. All other In-plan and Emergency and Urgently Needed Provider Services must
be paid by the HMO/CMP. Billing Option 1 HMO/CMPs and HCPPs will not complete the
entire worksheet. Since a Billing Option 1 HMO/CMPs and HCPPs may pay for the Medicare
deductible and coinsurance for services rendered in a provider setting, the worksheet should only
be completed to the extent of the deductible amounts.
When an HMO/CMP elects option 2, it will process bills from Hospitals, SNFs and HHAs it has
elected to pay directly. The HMO/CMP must use the alternative cost report forms for Billing
Option 2 Plans for filing with CMS. These alternative forms will enable Billing Option 2 Plans
to report the providers’ separate apportionment and settlement worksheets identifying the plan’s
costs of services according to Medicare Principles of Reimbursement. Instructions for the
Option 2 alternative worksheets are included in Appendix A.
Column Descriptions
Providers - List the name of the provider on the lines under the appropriate provider type
heading.
Column 1 – Provider Number – Enter the Medicare provider billing number.

FORM CMS 276
Column 2 – Reimbursable Part A – Not used for Option 1 Plans.
Column_3 – Part A Deductible and Coinsurance - Enter the Part A deductible and
coinsurance incurred by the plan for services rendered in the provider setting.
Column 4 – Reimbursable Part B – Not used for Option 1 Plans.
Column 5 – Part B Deductible - Enter Part B deductible only. Part B coinsurance should not be
included on this line.
Line Descriptions
Line 1 –Medicare Member Months - The cost report transfers to this line the number of
Medicare member months on Worksheet D, Part II Section E. Membership, Line 3.
Line 2 – Hospitals - Enter the hospital facilities on lines 3 through 47 and the related
information for columns 3 and 5 for the hospital facilities being reimbursed through this cost
report. See Appendix A for instructions for Option 2 Plans using the CMS required alternative
worksheets.
Line 48 - Total Hospital Cost – The worksheet adds the hospital Part A deductibles and
coinsurance and the Part B deductibles for those hospitals reported.
Line 49 – Cost PMPM – The worksheet calculates the reimbursable hospital cost PMPM by
dividing the total reimbursable hospital cost on Line 48 by the respective Medicare primary
member months on Line 1.
Line 51 – Skilled Nursing Facilities - Enter the skilled nursing facilities on lines 52 through 61
and the related information for columns 3 and 5 for the skilled nursing facilities being
reimbursed through this cost report.
Line 63 – Cost PMPM – The worksheet calculates the reimbursable skilled nursing facilities
cost PMPM by dividing the total reimbursable skilled nursing facilities cost on Line 62 by the
respective Medicare primary member months on Line 1.
Line 65 – Home Health Agencies – Option 1 Plans do not need to complete this section.
Option 2 Plans please see Appendix A for instructions on the CMS required alternative
worksheets for the home health agencies being reimbursed through this cost report.
Line 78 – Other Providers - Enter the name and type on lines 79 through 89 and the related
information for columns 1 through 5 for each provider being reimbursed through this cost report.
Examples of the types of providers reported in this section are Comprehensive Outpatient
Rehabilitation Facilities (CORF), Outpatient Rehabilitation Provider, etc.

FORM CMS 276
2313 WORKSHEET K - SUMMARY APPORTIONMENT OF NONPROVIDER COSTS
This worksheet apportions non-provider medical and other health service costs reimbursed under
Part B of the Social Security Act to the Medicare program. These apportioned costs are then
summarized, and the PMPM amount is calculated and transferred to the settlement sheet on
Worksheet M.
Cost and statistical information used in the apportionments transfer to this worksheet from other
worksheets on which they are developed. The worksheet transfers statistical information from
Worksheet D, Part II. There should be no differences between Worksheet D, Part II and
Worksheet K statistics. The worksheet transfers cost information from Worksheet E, Column 6.
There should be no variances between these amounts.
Column and Line Descriptions.
Column 1 – Statistic Used - Enter on the spaces provided the type of statistic being used to
apportion the particular cost item in the far left column. For example, a plan may elect to
apportion clinic services furnished directly on a physician-visit basis. The plan should enter in
Column 1, Line 1 "visits."
The appropriate code, as explained in footnote (1) of Worksheet D, Part II, should be entered just
left of Column 1.
Column 2 – Total Statistics - Enter the total statistics for each supplier from Worksheet D, Part
II, Column 4.
Column 3 – Covered Medicare Enrollee Statistics - Enter the covered Medicare enrollee
statistics for each supplier from Worksheet D, Part II Column 6.
Column 4 – Subpart E Limits - This column should be completed (1) by only those HCPPs that
do not have a written exception to these limits from CMS and pay for supplier services on a
fee-for-service basis or (2) those that pay for supplier services on a basis other than on a
fee-for-service basis and that supplier pays its members on a fee-for-service basis. In these cases,
reimbursement to the plan cannot exceed what a MAC/Carrier/Intermediary would have paid for
these services. For each supplier, the HCPP should enter the sum of what the
MAC/Carrier/Intermediary would have paid for each service rendered. If the HCPP cannot
provide the requested information, a zero should be placed in Column 4 and Column 7.
If the HCPP has been granted an exception to this limitation, the document granting the
exception for each supplier should be attached to the report form and Column 4 should not be
completed for that specific group of costs to which the exception applies.
In addition, HMOs/CMPs must complete Line 18 for Emergency-Urgently Needed Services
rendered after April 1, 1990. Payment for these services is limited to the reasonable cost for such
services or the Medicare prospective payment as provided for in 42 C.F.R. Parts 405, 412, and
413.

FORM CMS 276
There is an exception to this limitation on the basis of advantages gained by the HMO/CMP
according to 42 C.F.R.417.558. Refer to Managed Care Manual Pub# 100-16, Chapter 17,
Subchapter 17C, §80 and §90 for further discussion on this exception.
Column 5 – Ratio – The worksheet calculates the Medicare percentage as follows for each cost
center:
Lesser of Column 3 or Column 4
Column 2
All ratios are carried out 4 decimal places.
Column 6 – Total Costs – The Total Costs for apportionment are brought forward to this
column for each supplier cost center from Worksheet E Column 6.
Column 7 – Medicare Costs – The worksheet calculates the Medicare portion of the total cost
for each supplier cost center by multiplying (Column 5 times Column 6) and enters the result in
this column.

Line 19 – Professional Component Mental Health - Enter the cost portion for the professional
compensation paid that is in the total Mental Health cost on Worksheet E, Column 6, Line 15.
The professional component of the cost of mental health services must be isolated since there is a
37.5% coinsurance amount to be calculated on Worksheet L and carries to Worksheet M for
deduction.
Line 20 – Mental Health Services Non-Professional Component – Enter the amount of the
remaining cost of mental health services after the Professional Component on Line 19 is
deducted from the total on Worksheet E, Column 6, Line 15.
Line 36 – Member Months Part B – The worksheet transfers the total Part B member months
from Worksheet D, Part II, Section E, Column 2, Line 1.The total Medicare member months are
used instead of the primary Medicare member months in order to reflect the effect of the MSP
Employer Group member months on the determination of the PMPM cost.
2314 WORKSHEET L - SUMMARY OF MISCELLANEOUS ITEMS
This worksheet is provided for the recording of certain miscellaneous items. The worksheet is
fairly self-explanatory. However, certain items do need further clarification.
Line 1 - Enter on this line for Columns 1 and 2 the amount of Medicare member months shown
on Worksheet D, Part II E. Membership, Line 1.
Line 4 - Line 4 should be completed by entering in Column 5 the result of the division of Line 3
Column 5 by Line 1 Column 5.

FORM CMS 276
The entries for Columns 1 and 2 of Line 4 should be in the same ratio as Column 1 Line 1 bears
to the sum of Column 1 Line 1 plus Column 2 Line 1 and the ratio of Column 2 Line 1 bears to
the sum of Column 1 Line 1 plus Column 2 Line 1. Use the following formulas:
For Col 1 Line 4 use (Line 1 Col 1/(Line 1 Col 1 + Line 1 Col 2)) times Col 5 Line 4;
For Col 2 Line 4 use (Line 1 Col 2/ (Line 1 Col 1 + Line 1 Col 2)) times Col 5 Line 4.
Line 9 - Enter the Allowable Medicare Bad Debts (net of bad debt recoveries) for premiums,
dues, and co-payments charged to Medicare enrollees. The amount of allowable bad debts for a
Medicare enrollee may not exceed three times the monthly rate (or its equivalent if the premium
is payable on other than a monthly basis) for the actuarial value of the deductible and
coinsurance amounts. Any allowable bad debts claimed on a cost report submitted by a provider
or other facility reimbursed on a cost-based may not be claimed as a bad debt by the plan.
Line 15 - Enter the amount of third party insurer revenue received for those services that are not
paid fully by the insurer. These services pertain to only two categories of services for which
Medicare has a secondary liability (see sections 2306.1 (Column 6) and 2306.2 (Column 6) for
further details) and were counted in Column 6 of Worksheet D.

2315 WORKSHEET M - SETTLEMENT SHEET
This worksheet provides for the final computations necessary to determine the balance due the
plan or CMS.
Column Descriptions
Column 1 - This column identifies the worksheet from which the information for Columns 2-4
are taken.
Column 2 - Enter the total Medicare Part A per member per month costs requested.
Column 3 - Enter the total Medicare Part B per member per month costs requested.
Column 4 - Sum of Columns 2 and 3, Where appropriate.
Line Descriptions
Most of the lines are self explanatory and are taken from other parts of the report.
Line 13 - The Part B coinsurance is computed. Certain Part B services do not have a coinsurance
provision. If a plan feels that additional Part B services should be excluded from this
computation, an additional worksheet should be added showing how the Part B coinsurance was
computed.

FORM CMS 276
Line 22 - Line 22 reflects net payments from CMS (interim payments less amounts returned to
CMS by the plan). If your plan returned money to CMS, attach a schedule listing the amount,
date of transaction, reason for return, and method of payment (wire or check).
2316 WORKSHEET N - MEDICARE PREMIUM RECONCILIATION
The purpose of this form is to perform a final premium reconciliation to determine net over or
under collection of premiums for the final reporting period. Please note that if a plan has over
collected premiums, as determined by Worksheet N, these monies must be returned to the
Medicare beneficiaries enrolled in your plan during the reporting period.
Line Descriptions
Note: Before completing Lines 1 through 6, see the description for Line 7.
Lines 1 and 2 - Enter on the appropriate lines the actual collections made on premiums, dues, and
co-payments charged to Medicare enrollees or someone on behalf of the Medicare enrollee for
all covered Medicare items and services.
Line 4 - Enter the charges for premiums, dues, and co-payments related to Medicare enrollees for
months prior to the HMO's current reporting period, but not collected by the HMO before the
current reporting period.
Line 6 - Enter the charges for premiums, dues and co-payments related to Medicare enrollees for
months in the current reporting period, but not collected by the HMO as of the last day of the
current reporting period.
Line 7 - Enter the sum of Lines 5 and 6. If the HMO maintains its records sufficiently to identify
net collections and amounts to be collected for deductibles and coinsurance applicable to the
current reporting period, the HMO may enter the appropriate amount on Line 7 and omit Lines 1
through 6.
Line 8 - Enter on Lines 8a through 8c the amounts of Medicare's deductible, coinsurance, and as
requested by each line and referenced to the most recent final cost report submitted by the plan
Line 9 - Enter on Line 9 the amount of voluntary under collections reported on Line 7, Part II of
Worksheet B of the Budget Forecast covering the prior period required by this part.
Line 10 - This amount comes from the budget immediately prior to the period identified for this
part. (For example, if the final cost report is for 1999, then Line 10 should be for 1998). This
amount should equal any excess of Line 6 over Line 5 on Worksheet B, Part II. If no excess
exists, enter zero. Over collections from a prior period should be expressed as a negative number
and under collections should be expressed as a positive number.

2317 CERTIFICATION BY INDEPENDENT AUDITOR
One-hundred-eighty days after the close of the contract period, an HMO/CMP must submit a
final cost report that has been certified by an independent auditor.

FORM CMS 276

APPENDIX A – OPTION 2 INSTRUCTIONS
The instructions below for Option 2 plans only include items that differ from the preceding
instructions for Option 1 plans. All instructions besides these below apply to both Option 1 and
Option 2 plans. The alternative cost report forms required for Option 2 plans must be obtained
directly from CMS personnel as they are not available via HPMS.

2307 WORKSHEET E - SUMMARY TRIAL BALANCE
Lines 1 and 2 – Inpatient and Outpatient Hospital - Enter on these lines the costs incurred by
the plan, and reflected in the accounting records, for services furnished through a Hospital. The
plan must isolate and record those costs for inpatient on Line 1 and outpatient services on Line 2
that are subject to rate of increase ceiling pursuant to §1886(b) and PPS pursuant to §1886(d)
from those that are not subject to those statutory payment methods. The purpose for isolating
these amounts is to properly apply the lesser of cost or changes (Section 233 of the Medicare
statutes) to those costs of services incurred by Hospitals that are not subjected to those
provisions.
Adjustments on Worksheet G must be made to Lines 1 and 2 that include those necessary to
remove the cost of non-covered services and the cost of services to non-Medicare patients. As a
result of these adjustments, only the reimbursable portion of Hospital services will be reflected in
Column 4 and will flow to Worksheet J from Column 6 after cost finding.
2312 WORKSHEET J - SUMMARY OF PROVIDER COSTS
When an HMO/CMP elects Option 2, it will process bills from Hospitals, SNFs and HHAs it has
elected to pay directly. The HMO/CMP must acquire from these providers separate
apportionment and settlement worksheets identifying the plans costs of services according to
Medicare Principles of Reimbursement. HMOs/CMPs must enter into agreements with these
providers so that the reporting requirements outlined in items 1 through 4, as follows, can be
maintained.
1. Data Collection Requirements. - A provider furnishing services to an HMO/CMP
Medicare enrollee is required to maintain separate statistics for the Medicare
enrollees. These statistics will be maintained in such type, detail and form as
required for the provider's other Medicare patients. Separate statistics must be
accumulated for each HMO/CMP with which the provider has an agreement.
2. Filing Requirements for Provider Using Form HCFA 2552. – Hospitals, HospitalBased Skilled Nursing Facility, and Hospital-Based Home Health Agency complexes
will continue to use the Form HCFA-2552. These hospitals will prepare their cost
reports and submit them to their MAC/Carrier/Intermediary just as they do now.

FORM CMS 276
In addition, providers must prepare a separate set of apportionment and settlement
worksheets to determine costs of the HMO/CMP Medicare enrollees. The
worksheets will apportion the costs of each cost center between the HMO/CMP
Medicare enrollees and all other provider patients. A separate set of worksheets will
be needed for each HMO/CMP with whom the provider has an agreement. Providers
should make sure that payment for a covered service rendered to a Medicare
beneficiary is not made more than once.
3. Filing Requirements for Providers Using Other Cost Report Form. - Providers using
substitute cost reports, other than Form HCFA-2552 will utilize the principles
outlined for the Form HCFA-2552. That is, separate apportionment and settlement
worksheets will be prepared by the provider for each HMO/CMP. Each set of
worksheets will apportion the costs of the appropriate cost centers between the
applicable group of HMO/CMP Medicare beneficiaries and all of the providers'
patients.
In seeking reimbursement for home health services furnished to the HMO/CMP
Medicare enrollees, the HMO should attach the appropriate forms used by the home
health agency to obtain reimbursement from the Specialty MAC for services
furnished to Medicare beneficiaries who are not HMO/CMP enrollees. These forms
must reflect the cost of services furnished only to the Medicare enrollees of the
HMO/CMP.
4. MAC/Carrier/Intermediary Final Settlement with the Provider. - In making final
settlement with the provider, the MAC/Carrier/Intermediary will treat services
furnished to HMO enrollees as if the services were furnished to non-Medicare
beneficiaries, where the services are paid by the HMO/CMPs. For services furnished
to HMO/CMP enrollees the provider will be reimbursed for such services under the
terms of its arrangement with the HMO/CMP and the payment to the provider need
not be limited to cost. However, CMS payment to the HMO/CMP for such services
will be limited to the amount the MAC/Carrier/Intermediary would have paid the
provider for furnishing the services, except where the HMO can demonstrate to the
satisfaction of CMS that payment in excess of what the MAC/Carrier/Intermediary
otherwise would have paid is reasonable on the basis of advantages gained by the
HMO/CMP. These advantages gained must be real and verifiable.
The HMO/CMP must use the alternative cost report forms for Billing Option 2 Plans for
filing with CMS. These alternative forms will enable Billing Option 2 Plans to report the
providers’ separate apportionment and settlement worksheets identifying the plan’s costs of
services according to Medicare Principles of Reimbursement. The apportionment and
settlement sheets from each provider must be attached to Worksheet J. When the
HMO/CMP submits its fourth quarterly cost report, apportionment and settlement sheets for
the provider may not be available. In this case, the HMO/CMP should use the best
information available at the time.

FORM CMS 276
Column Descriptions
Column 2 – Reimbursable Part A – Enter total Part A reimbursable costs obtained from the
provider for which the plan is responsible. If the plan is using the Bill Summary Method for the
Provider in Column 1, attach additional sheets identifying any difference between the entry in
this column and the information contained in the Bill Summary Report.
Line Descriptions
Line 2 - Hospitals subject to rate of increase ceiling pursuant to 1886(b) or PPS pursuant to
§1886(d) – As explained in Section 2307 the Medicare reimbursable costs for hospital services
must be separated between those subject to the rate of increase ceiling or PPS from those that are
not. The lesser of cost or charges provisions do not apply to those hospital costs that are subject
to the rate of increase or PPS provisions. The hospitals and the related information for columns 1
through 5 for those hospitals subject to the rate of increase or PPS provisions must be reported
under this line heading.
Line 33 - Hospitals not subject to rate of increase ceiling pursuant to 1886(b) or PPS
pursuant to §1886(d) – Enter the hospitals and the related information for columns 1 through 5
for those hospitals that are not subject to the rate of increase or PPS provisions must be reported
under this line heading.
Line 46 - Total Medicare Customary Charges – Enter the customary charges of the hospitals
not subject to rate of increase ceiling pursuant to 1886(b) or PPS pursuant to §1886(d) that are
uniformly imposed and collected from a substantial percentage of patients that are liable for
payment on a charge basis. Refer to the HCFA Pub #15-1, Section 2606 for descriptions and
definitions for Customary Charges. The charges are recorded in the aggregate for all services
whose costs are entered on Lines 34 through 44.
Line 47 - Lesser of Medicare Reasonable Cost or Customary Charges – The worksheet
calculates the lower of line 45 or line 46 and enters the result on this line.
Line 48 - Total Hospital PPS and Non-PPS Cost – The worksheet adds the hospital PPS and
non-PPS amounts on Lines 31 and 46 to derive the total reimbursable hospital cost for the
period.
Line 49 – Cost PMPM – The worksheet calculates the reimbursable hospital cost PMPM by
dividing the total reimbursable hospital cost on Line 48 by the respective Medicare primary
member months on Line 1.
Line 51 – Skilled Nursing Facilities - Enter the skilled nursing facilities on lines 52 through 61
and the related information for columns 1 through 5 for the skilled nursing facilities being
reimbursed through this cost report.

FORM CMS 276
Line 63 - Total Medicare Customary Charges – Enter the customary charges of the skilled
nursing facilities that are uniformly imposed and collected from a substantial percentage of
patients that are liable for payment on a charge basis. Refer to the HCFA Pub #15-1, Section
2606 for descriptions and definitions for Customary Charges. The charges are recorded in the
aggregate for all services whose costs are entered on Lines 52 through 61.
Line 64 - Lesser of Medicare Reasonable Cost or Customary Charges – The worksheet
calculates the lower of line 62 or line 63 and enters the result on this line.
Line 65 – Cost PMPM – The worksheet calculates the reimbursable skilled nursing facilities
cost PMPM by dividing the total reimbursable skilled nursing facilities cost on Line 64 by the
respective Medicare primary member months on Line 1.
Line 67 – Home Health Agencies - Enter the home health agencies on lines 68 through 76 and
the related information for columns 1 through 5 for the home health agencies being reimbursed
through this cost report.
Line 78 - Total Medicare Customary Charges – Enter the customary charges of the home
health agencies that are uniformly imposed and collected from a substantial percentage of
patients that are liable for payment on a charge basis. Refer to the CMS Pub #15-1, Section 2606
for descriptions and definitions for Customary Charges. The charges are recorded in the
aggregate for all services whose costs are entered on Lines 52 through 61.
Line 79 - Lesser of Medicare Reasonable Cost or Customary Charges – The worksheet
calculates the lower of line 77 or line 78 and enters the result on this line.
Line 80 – Cost PMPM – The worksheet calculates the reimbursable home health agencies cost
PMPM by dividing the total reimbursable home health agencies cost on Line 64 by the
respective Medicare primary member months on Line 1.
Line 82 – Other Providers - Enter the name and type on lines 83 through 93 and the related
information for columns 1 through 5 for each provider being reimbursed through this cost report.
Examples of the types of providers reported in this section are Comprehensive Outpatient
Rehabilitation Facilities (CORF), Outpatient Rehabilitation Provider, etc.

FORM CMS 276
2313 WORKSHEET K - SUMMARY APPORTIONMENT OF NONPROVIDER COSTS
Column 8 – Medicare Customary Charges – Enter in this column for each supplier cost center
the customary charges of the supplier that are uniformly imposed and collected from a
substantial percentage of patients that are liable for payment on a charge basis. Refer to the
HCFA Pub #15-1, Section 2606 for descriptions and definitions for Customary Charges. The
charges are recorded in the aggregate for all services whose costs are entered on Lines 1 through
34.
Column 9 – Lesser of Cost or Charges - The worksheet calculates the lesser of the Medicare
cost in Column 7 or the customary charges in Column 8 and enters the result in this column for
each of the supplier cost centers.

File Type	application/pdf
Author	John Gary Bowers
File Modified	2009-04-03
File Created	2009-03-09