CMS-1728-19_ResponseTo60-dayComments

Responses to Comments Received for Form CMS 1728-19

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One commenter asked if there was a benefit
to reporting CBSA codes on proposed
Worksheet S-3, Part III?

2

One commenter suggested that CMS define
minimal edit specifications for “Other” cost
center descriptions found in the General
Service, Reimbursable Service and Nonreimbursable Service cost center categories on
Worksheet A and Worksheet A-8. This effort
would ensure that standard cost center
descriptions are not modified while requiring
some modification to the “Other”
descriptions.
One commenter noted that the pre-printed
statistical basis for the allocation of Movable
Equipment on Worksheet B-1 is Dollar Value,
the instructions also allow for a basis of square
feet of area occupied.

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One commenter questioned CMS’ need to
collect the outpatient Physical Therapy Visits
on Worksheet C, Part III. The PS&R does not
identify visits by service practitioner type and
would not accurately reflect the data needed.
One commenter indicated that Primary Payer
Amounts currently reported on Worksheet D,
Part I, Line 9 should be moved to Worksheet
D, Part II as they relate to vaccine and HHA
PPS services.
One commenter questioned the instruction for
Worksheet D, Part II, Line 31, Other
Adjustment (enter an adjustment resulting

CMS appreciates the commenter’s question
regarding the reporting of CBSA codes on
proposed Worksheet S-3, Part III. While this
information is not used elsewhere in the cost
report, the information is used by other
stakeholders, such as CMS’ Office of the Actuary.
CMS agrees with the commenter’s suggestion to
define minimal edit specifications for “Other”
cost center descriptions on Worksheet A and
Worksheet A-8 and have modified the forms and
instructions accordingly.

CMS thanks the commenter for their
observation that the proposed form CMS-172819 instructions allow Square Feet or Dollar Value
as the basis for Column 2, Movable Equipment.
While the statistical basis of Dollar Value is the
recommended basis of allocating Movable
Equipment, if a more accurate result is obtained
by allocating costs on an alternative allocation
basis (e.g., square feet), the provider may have
obtained prior approval or may request approval
to use an alternative basis in accordance with
CMS Pub. 15-1, chapter 23, §2313. We’ve
modified the cost reporting instructions
accordingly.
CMS appreciates the commenter’s concern and
agrees. Worksheet C, Part III was a carry-over
from a previous iteration and has been removed
as this information is no longer necessary.
CMS agrees with the commenter and has moved
Line 9 of Worksheet D, Part I to Line 21 of
Worksheet D, Part II.
CMS agrees with the commenter’s concern and
has modified the instructions accordingly.

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from changing the recording of vacation pay
from cash basis to accrual basis).
One commenter identified a reference to Part
B in the column heading on Worksheet D-1.
Several commenters felt the effective date for
the revised HHA cost report forms should be
delayed until six months after the finalization
of the proposed forms and instructions to
allow providers time to make changes to their
accounting and billing records. The
commenters believed the modifications may
include changes to the recording of expenses
for nursing, physical therapy and occupational
therapy, in addition to billing system updates
to generate new visit statistics. These
commenters also believe the delayed effective
date will allow software vendors enough time
to make appropriate changes to generate the
new census statistics needed for the cost
report.
A few commenters believe the required
signature on Worksheet S, Part II should be
broadened from “Chief Financial Officer or
Administrator” of the Provider to include any
“Authorized Official” as identified in the
Medicare enrollment record, specifically as
noted in Section 6 of the CMS Form 855A.
They believe this change will accommodate
smaller agencies that may not have individuals
with the title of “Chief Financial Officer”. The
commenters expressed that other individuals
such as the Director of Finance, an owner, or
someone with management responsibility of
the agency should have the ability to sign the
cost report.
Some commenters were pleased that CMS has
provided a mechanism for reporting multiple
Home Offices on Worksheet S-2 and were
hopeful the change would be applied to cost
reports for other provider types.
A few commenters felt there is no
standardized form for applying for a Home
Office since the CMS Form 855A is not
required and would like CMS, or the MACs, to
provide an application of a new Home Office
Provider Number. They believe this

CMS thanks the commenter for their
observation and has removed the reference to
Part B from the worksheet accordingly.
CMS appreciates the commenters’ input on the
effective date of the proposed form CMS-172819 for the HHA cost report. We believe the
changes necessary for providers and vendors are
less significant than what is described by the
commenters. The majority of the changes were
removing obsolete worksheets. The changes to
the cost report that require recording expenses
for nursing, PT and OT were actually effectuated
on the bill based on Change Request 9736 dated
November 10, 2016 with an implementation
date of January 3, 2017. The cost report is being
modified to collect this data; however, CMS will
delay the effective date six months or for cost
reporting periods beginning on or after July 1,
2019 and ending on or after June 30, 2020.
CMS appreciates the commenters’ suggestion to
broaden the HHA’s signature capability beyond
the chief financial officer or administrator on
Worksheet S, Part II. The regulation at 42 CFR
413.24(f)(4)(iv) requires the certification
statement be signed by the facility’s
administrator or chief financial officer. We
understand the commenters’ concern about
possibly not having an employee designated as
the chief financial officer, however, each HHA
should have an administrator whose job is to
control the operations of the business,
organization, or facility.
CMS appreciates the commenters’ views
regarding the mechanism on Worksheet S-2,
part I, which allows providers to report multiple
Home Offices and is considering adapting this
reporting for all provider types.
CMS acknowledges the commenters’ concern
regarding the current application process for a
new home office provider number. This
comment is outside of the scope of this PRA,
however, we will forward the comment to the
appropriate division for consideration.

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application would alleviate current insufficient
instruction on MAC’s websites as well as
variances in responses from MACs to written
requests for Home Office Provider Numbers.
Some commenters requested that CMS
provide clarification between the requirement
for formal home office provider number and
reporting a transaction from a related party as
both transactions are required to be
submitted on Worksheet A-8-1.

CMS appreciates the commenters’ request for
clarification regarding the reporting of related
party transactions on Worksheet A-8-1,
specifically when a formal home office provider
number is needed. A formal home office
provider number is needed when there is a
chain organization. A chain organization
consists of a group of two or more health care
facilities which are owned, leased, or through
any other device, controlled by “one
organization”. Chain organizations may take a
variety of structures and may have a variety of
types of components; however, all chains have
two basic elements: healthcare facilities and a
central organizing body. Chain organizations
include, but are not limited to, chains operated
by proprietary organizations and chains
operated by various religious, charitable, and
governmental organizations. Most chain Home
offices are separate and distinct headquarters.
The home office is usually physically and
organizationally separate and easily identifiable
from the facilities it serves. Most home offices
provide healthcare related functions to or on
behalf of the chain providers. These functions
may include central management and policy
direction; financial arrangements and overall
financial control; centralized services such as
accounting, billing, purchasing, laundry, payroll,
cost report preparation, etc. Related party costs
include all reasonable costs, direct and indirect,
incurred in the furnishing of services, facilities,
and supplies to the provider. A transaction may
occur between a related organization and the
provider but does not warrant a home
office. For instance Mr. B owns a 60 percent
interest in the provider organization and a 55
percent interest in a laundry service supplying
the provider. The provider and the supplying
organization are considered related by common
ownership since Mr. B possesses significant
ownership in both organizations. The cost
incurred by the provider must be reduced to
costs but a home office cost statement is not

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Several commenters observed the break out
of “Medicaid” from “Other” patients on
Worksheet S-3, Part I for visits and patient
statistics. In the previous version of the HHA
cost report, some preparers interpreted the
Medicare census totals in Columns 1 and 2
were only the Traditional Medicare services
that would be billed to the MAC. The
commenters think CMS should modify the
instructions to clearly indicate how Medicare
Advantage, Medicaid, Out-of-State, and
Medicaid Managed Care census statistics are
to be reported.
Some commenters feel that unless CMS
revises Worksheet S-3, Part IV, data reported
for 60-day episodes would be comingled with
30-day period per the Patient Driven
Groupings Model (PDGM) effective for cost
reporting periods ending in 2020. They
wondered if CMS will provide two (2) separate
Worksheet S-3, Part IVs for 2020 or would
some other reporting change be made to
accommodate two separate episodic periods.
Several commenters recognized that
Worksheet S-3, Part IV does not include the
same visit statistic breakout as is required on
both Worksheet S-3, Part I and Worksheet C.
These variances include statistics for Licensed
Practical Nurse, Physical Therapy Assistant,
and Certified Occupational Therapy Assistant
which are not included on Worksheet S-3, Part
IV. They noted that if the worksheets were
made consistent, additional PS&R information
would be needed to generate the necessary
charges for these disciplines. One commenter
noted the statistical breakout on these
worksheets should be consistent.
Some commenters noticed that the categories
of direct care employees and independent
contractors on the proposed Worksheet S-3,
Part V differed from those reported on both
proposed Worksheet S-3, Part II and
Worksheet A, and that Medical Social Services

necessary. The intent is to treat the costs
incurred by the supplier as if they were incurred
by the provider itself.
CMS appreciates the commenters’ observation
of the break out of “Medicaid” from “Other”
patients on Worksheet S-3, Part I and for their
recommendation for clarification on how
Medicare Advantage, Medicaid, Out-of-State,
and Medicaid Managed Care statistics should be
reported. We have clarified the instructions for
columns 5 and 6 which should also clarify the
intention of columns 1 through 4. In addition,
for Medicare purposes we define Medicare HHA
visits as described in 42 CFR 409.48. These visits
are visits covered under Medicare Part A and
Part B.
CMS appreciates the commenters’ concern over
potential co-mingling of data on Worksheet S-3,
Part IV for 60-day episodes and 30-day periods
per the Patient Driven Groupings Model
effective for cost reporting periods ending after
January 1, 2020. CMS does not intend on
splitting this information in the cost report. The
claims data with dates of service will be used to
differentiate the varying number of days per
episode/period.
CMS appreciates the commenter’s concern that
Worksheet S-3, Part IV does not have the same
visit statistic breakout as is required on both
Worksheet S-3, Part I and Worksheet C. In
reviewing Worksheet S-3, Part IV we incorrectly
labeled lines 1 and 2. We will modify the lines to
read Skilled Nursing Care-visits and Skilled
Nursing Care-charges. The visits from
Worksheet S-3, Part I are transferred to
Worksheet C, Part I, column 3, lines 1 through 9
and will be used to determine the average cost
per visit for each discipline. Visits are not being
split on Worksheet S-3, Part IV as PPS payments
are made under their respective category
regardless of staffing level.
CMS appreciates the commenters’ concern that
the occupational categories are different on the
proposed Worksheet S-3, Part V compared to
proposed Worksheet S-3, Part II and Worksheet
A. We modified the direct patient care staff on
proposed Worksheet S-3, Part V to mirror the

is not separately listed on the proposed
Worksheet S-3, Part V.

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A few commenters felt that requiring total
paid hours in Column 4 of proposed
Worksheet S-3, Part V may be difficult for
home health providers to report since
payment for direct care personnel on a per
visit method is common in this industry for
such disciplines as contracted therapies and
nurses. They requested a response from CMS
regarding what HHAs should use as an
equivalent in the absence of actual time
records. They noted that prior to PPS on
October 1, 2000, agencies were allowed to use
the Adjusted Hourly Salary Equivalency
Amount (AHSEA) which was 1.0 hour per visit
as a proxy in the absence of actual time
records.
A few commenters felt the HHA cost report
needs to address patient monitoring
equipment costs incurred that may be subject
to acceptable equipment capitalization
requirements and specific depreciation
policies of the provider. They believe CMS
should provide instruction for equipment that
needs to be capitalized and whether the
depreciation can be directly charged to the
Remote Patient Monitoring cost center.

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Some commenters believe they should be able
to select an alternative basis in the first and
subsequent years for the allocation of Remote
Patient Monitoring costs instead of using
“Time Spent” since these costs have not been
previously included as a General Service cost.

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A few commenters opined on the meaning of
the allocation basis “Time Spent” for Remote
Patient Monitoring. They wondered if it
related to the time registered nurses, licensed

direct patient care staff on proposed Worksheet
S-3, Part II; however, Worksheet A reflects line
labels in accordance with billing requirements.
Proposed Worksheet S-3, Part II collects
administrative FTEs as well as direct patient care
FTEs.
CMS recognizes the commenters’ concern about
reporting total paid hours on proposed
Worksheet S-3, Part V. CMS believes home
health agencies should be able to provide the
hours required on proposed Worksheet S-3, Part
V from their internal records for each
occupational category listed, or for contracted
services from invoices identifying time spent for
contract labor.

CMS thanks the commenters for their concern
over patient monitoring equipment costs that
may be subject to capitalization and
depreciation. We refer the commenters to PRM
15-1, chapter 1 for the proper treatment of
major movable equipment. In addition, per the
regulation at 42 CFR 409.46(e), if remote patient
monitoring is used by the home health agency to
augment the care planning process, the costs of
the equipment, set-up, and service related to
this system are allowable only as administrative
costs.
CMS appreciates the commenters’ request for
an alternative basis for the allocation of Remote
Patient Monitoring costs. We believe Time
Spent is the most accurate basis, however, if a
more accurate result is obtained by allocating
costs on an alternative allocation basis (e.g.,
square feet), the provider may have obtained
prior approval or may request approval to use
an alternative basis in accordance with CMS
Pub. 15-1, chapter 23, §2313.
CMS appreciates the commenters’ request for
clarification on the meaning of the allocation
basis “Time Spent” for Remote Patient
Monitoring. Time spent should be properly

practical nurses, etc., spend installing the inhome system, as well as the time spent
monitoring and transmitting information to
physicians and/or others. They believe that
CMS should define the allocation basis of
“Time Spent” in the instructions or final rule to
ensure consistent reporting by home health
agencies.
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Some commenters observed that Telehealth
services are not part of the home health
benefit and are segregated in the revised
Home Health Agency Cost Report on proposed
Worksheet A, Line 30 with the cost report
instructions stating “Telehealth services are
outside the scope of the Medicare home
health benefit and home health PPS”. The
commenters want to know why these costs
are reported under the HHA Reimbursable
Services on proposed Worksheet A, Line 30
instead of being reported as a
Nonreimbursable service below Line 39?
A few commenters requested an explanation
of the value of Worksheet A-7 and how this
information is used by CMS. They stated if
there is no use of the data provided on
Worksheet A-7, the revised cost report would
be an appropriate time to remove the
worksheet.
A few commenters believe the reporting of
advertising costs on Worksheet A-8 are
inconsistent with the handling of advertising
costs on Worksheet O for those home health
agencies that operate an HHA-based hospice.
The commenters also felt the handling of
advertising and marketing activities by an HHA
with an HHA-based hospice are inconsistent
with how a free-standing hospice handles
these same costs.
Some commenters expressed concern over
situations when a Home Health Agency with a
HHA-based hospice both benefit from the
administrative activities of a Volunteer Service
Coordination program. They included a
suggestion for CMS to include a General

accounted for as noted in the regulation at 42
CFR 409.46(e): “when remote patient
monitoring is used by the HHA to augment the
care planning process, the costs of the
equipment, set-up, and service related to this
system are allowable only under the provision of
a skilled service. A visit to a beneficiary’s home
for the sole purpose of supplying, connecting, or
training the patient on remote patient
monitoring equipment is not allowable.”
CMS appreciates the commenters’ observation
that Telehealth services are not part of the
home health benefit and acknowledges their
concern over the reporting of Telehealth costs
under the HHA Reimbursable Services on
proposed Worksheet A, Line 30 of the cost
report rather than being reported as an HHA
Non-reimbursable Service below Line 39. CMS
will revise the proposed cost reporting forms
and instructions to report telehealth services to
a non-reimbursable cost center on Line 47.
CMS appreciates the commenters’ request for
an explanation of the value of Worksheet A-7.
This worksheet was a carry-over from the 172894 version, however it is no longer used by CMS
and will be removed from the forms and
instructions.
CMS thanks the commenters for their
observation. CMS will add Line 48 – Advertising
to Worksheet A. However, for both HHA and
HHA-based Hospice, in accordance with CMS
Pub. 15-1, Chapter 23, §2328, where the costs
(direct and allowable share of general service
cost) attributable to any non-allowable cost
center are so insignificant as to not warrant
establishment of a non-reimbursable cost center
these costs may be adjusted on Worksheet A-8,
Line 11 and/or Worksheet O, Column 6
accordingly.
CMS appreciates the commenters’ concern over
potentially shared Volunteer Service
Coordination cost between the HHA and the
HHA-based hospice. In accordance with 42 CFR
418.78 Volunteer Services are an integral part of
the hospice Conditions of Participation and as

Service cost center on Worksheet A to
accommodate situations such as these.

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A few commenters are requesting clarification
of Section 4714 of the cost report instructions
regarding what contracted costs are to be
excluded from total cost for purposes of
determining the basis of allocation of the
Administrative and General costs. Some
commenters felt the instructions should be
expanded for home health agencies with HHAbased hospices to provide that Administrative
& General costs are not to be allocated to
contracted room and board expenses and
contracted inpatient costs included within the
reported Hospice cost center on Line 57 as this
increases the consistency in reporting for freestanding hospices and HHA-based hospices.
A few commenters expressed concern that
reporting gross patient revenue on Worksheet
F-1, Line 1 by program may be misleading as
the reporting of allowances and discounts is in
aggregate.

Some commenters expressed concern over
the removal of Worksheet F-2 as they felt it
provided a reconciliation for a chain
organization with multiple providers. The
commenters recommended incorporating the
worksheet back into the cost report.

such are reported on Worksheet A, line 57. If
the HHA also receives services from the
volunteer services coordinator the HHA should
reclassify the cost associated with the HHA from
the hospice, Worksheet A, line 57, to the HHA.
CMS appreciate the commenters’ request for
clarification of Section 4714 of the cost report
instructions regarding what contracted costs are
to be excluded from total cost for purposes of
determining the basis of allocation of the
Administrative and General costs, however; the
instructions for Section 4714 are instructing
providers to properly apportion A&G cost when
an HHA contracts for services and the contract
identifies the A&G cost applicable to those
services, the entire contract cost should not be
included as a statistical basis for allocating A&G
cost. We will modify the instructions to
specifically include the verbiage “HHA or HHAbased hospice” for clarification.
CMS appreciates the commenters’ concern over
the breakout of gross patient revenue on
Worksheet F-1, Line 1 while reporting
allowances and discounts in the aggregate. We
will modify the worksheet to capture allowances
and discounts by program as well for
consistency. In addition, we will include in the
instructions that both Medicare and Medicaid
are columns used for title XVIII and title XIX and
that any HMO services for either should be
reported in Other.
CMS appreciates the commenters’ concern over
the removal of Worksheet F-2, however, the
form has been deemed obsolete for cost
reporting purposes.

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Several commenters were concerned that
since the development of the Worksheet O
series, there are numerous inconsistencies
requiring significant effort to correctly report
accurate costs for both the HHA component
and HHA-based hospice component of
operations. The commenters’ referenced
costs for Medical Records and Nursing
Administration, as well as Worksheet A’s
Other General Service cost center, as
examples of the inconsistencies for reporting
cost between the two components.
Additionally, the commenters felt that many
techniques for complying with the
requirements of the Worksheet O series can
cause an over-allocation of costs to the HHAbased hospice.
Several commenters opined on why there is
no cost center for drugs charged to patients
on the HHA-based hospice cost report forms
as there is on the freestanding Hospice cost
report.

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A few commenters would like CMS to open
the DME/Oxygen, Line 38 on the inpatient
Worksheets O-3 and O-4 to be consistent with
freestanding Hospice providers.

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Several commenters expressed concern that
while the Worksheet O series provides all the
nonreimbursable cost centers as reported on
the freestanding Hospice cost report. They
felt these cost centers are in conflict with how
the costs are reported on Worksheet A of the
HHA cost report with an HHA-based hospice.

CMS appreciates the commenters’ concern over
what they consider a lack of consistency
between the General Service cost centers on
Worksheet A of the HHA and Worksheet O of
the HHA-based hospice. We agree that the
inconsistency in cost centers may cause
challenges in allocation; therefore, we’ve added
Line 7, Nursing Administration and Line 8,
Medical Records to Worksheet A. In addition,
we’ve revised the instructions for Line 9 to
report Other General Service Cost not reported
on Lines 1 – 8. All subsequent worksheets were
modified accordingly.

CMS appreciates the commenters’ concern
about the lack of a cost center for drugs charged
to patients on the HHA-based hospice cost
report forms. We agree this line should be on
the HHA-based Hospice Worksheets. CMS will
update the forms and instructions accordingly.
CMS appreciates the commenters’ observation
about the accessibility of Line 38, Durable
Medical Equipment/Oxygen on the inpatient
Worksheets O-3 and O-4 of the revised HHA cost
report. We agree that Line 38 should not be
shaded on Worksheets O-3 and O-4 and CMS
will update the forms and instructions
accordingly.
CMS appreciates the commenters’ concern over
the non-reimbursable cost centers on the
Worksheet O series in the HHA-based hospice
cost report, such as, Fundraising, Advertising,
Patient Monitoring Costs, and Thrift Store. Not
all of these costs would be applicable or incurred
at the HHA. However, if the HHA-based Hospice
operates a Thrift Store, the cost would be
reported on Worksheet A Line 57, Hospice and
then detailed on Worksheet O, Line 69. If costs
for Advertising or Fundraising are unique to the
HHA-based hospice it is treated the same as
Thrift Store, however if those costs are shared
between the HHA and HHA-based Hospice, all
cost associated with these cost centers can be
reported on W/S A, Lines 48 and 49 and the
portion applicable to the HHA-based hospice will

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Some commenters expressed concerns over
the lack of consistency between the General
Service cost centers on Worksheet A of the
HHA and Worksheet O of the HHA-based
hospice on the Form CMS-1728-19.

be reclassified to line 57 and detailed on
Worksheet O, Lines 62 (Fundraising) and 67
(Advertising). Patient monitoring costs for the
HHA-based Hospice must be reported separately
on Worksheet A, Line 57 and detailed on
Worksheet O Line 68. Remote patient
monitoring costs related to the HHA are specific
to the HHA and are reported on Worksheet A,
Line 5 in accordance with 42 CFR §409.46(e).
CMS appreciates the commenters’ concern over
what they consider a lack of consistency
between the General Service cost centers
Worksheet A of the HHA and Worksheet O of
the HHA-based hospice. Since direct patient
care does not occur at the location of the Home
Health Agency, there is a difference in how the
cost centers are handled on Worksheet A for the
HHA verses Worksheet O of the HHA-based
hospice. CMS believes the manner in which
Worksheet A and Worksheet O are to be
completed is in accordance with all regulatory
language pertaining to a Home Health Agency
that operates an HHA-based Hospice.