CMS-339 Supporting Statement 2012

Supporting Statement For
Provider Cost Report Reimbursement Questionnaire
and Supporting Regulations
42 CFR 413.20 and 413.24
Form CMS-339
A.

Background
The purpose of Form CMS-339 is to assist the provider in preparing an acceptable cost report
and to minimize subsequent contact between the provider and its Medicare Administrative
Contractor (MAC). Form CMS-339 provides the basic data necessary to support the
information in the cost report.
Exhibit 1 of the Form CMS-339 contains a series of reimbursement-oriented questions which
serve to update information on the operations of the provider. It is arranged topically regarding
financial activities such as independent audits, provider organization and operation, etc. The
MAC responsible for the settlement of the Medicare cost report must determine the
reasonableness and the accuracy of the reimbursement claimed. This process includes
performing both, a desk review of the cost report and an analysis leading to a decision to settle
the cost report with or without further audit. Form CMS-339 provides essential information to
enable the MAC to make the audit/no audit decision, scope the audit if one is necessary, and to
update the provider documentation (i.e., documentation to support the financial profile of the
provider). If the information is not collected, then the MAC will have to go onsite to each
provider to get this information. Consequently, it is far less burdensome and extremely cost
effective to capture this information through the Form CMS-339.
Exhibit 2 is a listing of bad debts pertaining to uncollectible Medicare deductible and
coinsurance amounts. Preparation of the listing is a convenient way for providers to supply the
MAC with information needed to determine the allowability of the bad debts for
reimbursement. Some items required to determine allowability that are included on this exhibit
are patient’s name, dates of service, date first bill sent to beneficiary, and date the collection
effort ceased. Supplying the MAC with this information may be all that is required for the MAC
to determine whether or not the bad debt is allowable. This may eliminate a visit to the
provider to gather this needed data.
Summary of the General Purposes of Each Exhibit in Form CMS-339:
Exhibit 1 - Provider Cost Report Reimbursement Questionnaire--Its purpose is to assist
the provider in preparing an acceptable cost report, and to minimize direct contact
between the provider and its MAC. The questionnaire is designed to answer pertinent
questions about key reimbursement concepts relative to the Medicare cost report.
Example - Questions regarding whether an independent audit had been performed will
prevent duplication of work. It provides an update to the MAC’s permanent file that, in
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turn, completes the profile on that provider which is a valuable tool in scoping the
audit.
Exhibit 2 - Listing of Medicare Bad Debts and Appropriate Supporting Data-- This
exhibit requests a listing of bad debts and appropriate supporting data. Submission of
this listing may provide the MAC with sufficient information upon which to base the
acceptability of the bad debts claimed on the cost report without the necessity of an
onsite visit.
We are currently working on elimination of Form CMS-339 and inclusion of the applicable
questions on the individual cost report forms. To date, Form CMS-339 has been incorporated
in the Form CMS-2552-10 (Hospital cost report), Form CMS-2540-10 (SNF cost report), and
Form CMS-265-11 (ESRD cost report). Because of the time required to include the questions
in each of the remaining cost report reports, we are requesting a 3-year extension of the Form
CMS-339 at this time.
B.

Justification
1.

Need and Legal Basis
The information collected in this form (Exhibits 1 and 2) is authorized under Sections
1815(a) and 1833(e) of the Social Security Act, 42 USC 1395g. Regulations at 42
CFR 413.20 and 413.24 require providers to submit financial and statistical records to
verify the cost data disclosed on their annual Medicare cost report. Providers
participating in the Medicare program are reimbursed for furnishing covered services
to eligible beneficiaries on the basis of an annual cost report (filed with the provider's
MAC) in which the proper reimbursement is computed.
Consequently, it is necessary to collect this documentation of providers’ costs and
activities that supports the Medicare cost report data in order to ensure proper
Medicare reimbursement to providers.

2.

Information Users
Form CMS-339 must be completed by all Home Health Agency (HHA), Community
Mental Health Centers (CMHC), Rural Health Clinic/Federally Qualified Health
Center (RHC/FQHC), Organ Procurement Organization (OPO), and Hospice
providers that submit full cost reports to the Medicare MAC under Title XVIII of the
Social Security Act. It is designed to answer pertinent questions about key
reimbursement concepts found in the cost report and to gather information necessary to
support certain financial and statistical entries on the cost report. The questionnaire is
used by the MACs as a tool to help them arrive at a prompt and equitable settlement of
all of the various types of provider cost reports (HHAs, Rural Health Clinics, etc.) and
sometimes preclude the need for a comprehensive on-site audit. Since the Provider
Cost Report Reimbursement Questionnaire is in reality a supporting statement of the
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CMS-1728 (Medicare HHA Cost Report) OMB No. 0938-0022 expiration date of
10/31/2013, CMS-2088 (Medicare CMHC Cost Report) OMB No. 0938-0037
expiration date of 4/30/2013, CMS-222 (Medicare RHC/FQHC Cost Report) OBM
No. 0938-0107 expiration date of 8/31/2014, Form CMS-216 (Medicare Organ
Procurement Organization Cost Report) OMB No. 0938-0102 expiration date of
7/31/2014, and Form CMS-1984 (Medicare Hospice Cost Report) OMB No. 09380758 expiration date of 12/31/2013) it also must be furnished on an annual basis.
3.

Improved Information Technology
The processing of reimbursement questionnaire data through an electronic medium is
in process. At the present time, we have approved several software packages to
process the CMS-339. However, we are still requiring the submittal to be only in hard
copy because we have not yet completed uniform specifications to be used by all
software vendors.

4.

Duplication of Similar Information
There is no specific duplicate information collection instrument pertaining to
supplemental cost report documentation. The information in Form CMS-339 provides
more detailed information to support the amounts reported on the cost report. This
form was developed to curtail any additional amount of information being placed on
the cost report and to facilitate its review without the need for an on-site audit. Only
one of the questions in Form CMS-339 relates to an issue (i.e., change of ownership)
that is also addressed in Form CMS-855 (Provider Enrollment). However, this
specific information from Form CMS-855 may not always be available at the time the
cost report is desk-reviewed, meaning this information must be obtained from Form
CMS-339. We will consider this issue again when we incorporate the Form CMS-339
into the cost report.

5.

Small Businesses
To a large extent, this information collection does not involve small businesses.
However, where it does, efforts have been made to streamline its format and clarify its
instructions.

6.

Less Frequent Collection
If this information were collected less frequently it would deny the Federal
Government financial profile data. Furthermore, all data collected ties into the cost
reporting year, so the Form CMS-339 must correlate to the annual submission of the
cost report.

7.

Special Circumstances
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There are no special circumstances.
8.

Federal Register Notice/Outside Consultation
The 60-day Federal Register notice published on _____________.

9.

Payments/Gifts to Respondents
There were no payments/gifts to respondents.

10. Confidentiality
CMS does assure the confidentiality of information obtained through the Form CMS339. However, we are informed by CMS's Privacy Act Officer that a Notice of System
of Records encompassing this type of data already exists.
11. Sensitive Questions
This information collection does not contain any sensitive questions.
12. Burden Estimate (Total Hours & Wages)
Response time can vary depending on the type of provider and the size and complexity
of the provider's operations. In addition, significant financial events (e.g., change of
ownership) can also impact on response time. Exhibit 1 is required to be submitted by
all the provider-types listed below that are filing full cost reports. Exhibit 2 is required
for all providers except HHAs and hospices.
The number of respondents is calculated as follows:

*

HHAs (freestanding)
CMHCs freestanding)
RHC/FQHC (freestanding)
Hospice (freestanding)
OPOs

10,042
428
4,973
2,445
51

Total number of respondents*

17,939

Provider-based HHAs, CMHCs, Hospices, and RHC/FQHCs will have their Cost
Report Reimbursement Questionnaire completed by the parent provider.

The breakdown of the Exhibit requirements and estimated hours to complete follow:

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EXHIBIT
NUMBER

TO BE PREPARED BY

1

All providers

5

All providers except HHAs
and Hospices

AVG. HOURS
NUMBER OF
TO COMPLETE
RESPONDENTS EXHIBIT

TOTAL
HOURS

17,939

3

53,817

5,452

4

21,808

TOTAL

75,625

As shown above, we estimate the annual burden to be 75,625 hours. This is an estimate of
the average time required for all providers to prepare the questionnaires. The time will
vary based on the size and type of provider.
Respondent Costs:
Average wage of respondent (including clerical cost) = $40.00/hour
Total Hours to Respond = 75,625
Total Annual Respondents Cost = $3,025,000
Preparation of Form CMS-339 contributes to the preparation of the cost report and allows
the MAC to accomplish a quicker settlement with less need to obtain data on site. In some
cases, there is less chance of an audit because needed data will already be available. Also,
if the provider is audited, much of the data collected will be used by the MAC; thus
eliminating duplicate requests for information and expediting the performance of the
audit.
The Medicare program shares in the cost of preparing Form CMS-339 based on the
provider’s Medicare utilization either as part of the PPS payment rate or cost-based
reimbursement.
13. Capital Costs
There are no capital costs.
14. Cost to Federal Government
Since the Form CMS-339 is available to be printed from the Internet, we expect the cost
for printing and distribution to be minimal.
15. Program changes/Burden changes
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The previous burden estimate was 431,148 hours. The difference is due to: (1)
decrease in the number of respondents required to complete Exhibits 1 and 2 due to
the incorporation of the Form CMS-339 into Forms 2552-10 (hospitals), 2540-10
(SNFs), and 265-11 (ESRD facilities); (2) a decrease in average hours to complete
Exhibit 1 because of a less complex nature of the providers that are still required to
complete Form CMS-339, and elimination of previous Exhibits 2 through 4.A and 6.
Revised:

(see computation in Section 12 above)

75,625 hours

Prior:

(see prior Form 83-C submitted
in April 2006)

431,148 hours

Decrease:

355,523 hours

16. Publication and Tabulation Dates
There are no publication or tabulation dates.
17. Expiration Date
CMS would like an exemption from displaying the expiration date as these forms are
used on a continuing basis. To include an expiration date would result in having to
discard a potentially large number of forms.
18. Certification Statement
There are no exceptions to the certification statement.
C.

Collections Of Information Employing Statistical Methods
This collection does not employ statistical methods.

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