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Pete Harmon's HFS Blog

Health Financial Systems – Director, Government Relations

I will be retiring 12/31/2013, and with vacation and the Holidays, I am effectively retired now. Please send any subsequent emails,
to support@hfssoft.com or call (888) 216-6041.  The email address pete@hfssoft.com will be retired in the near future.

I have been in Medicare for over 40 years, and it is time to retire.  I have enjoyed the over 20 years at HFS, and working with all of you who may have read this Blog.  The HFS web site, www.hfssoft.com  has a NEWS Tab, so much of what was on this Blog, will now be on the web site.

Pete Harmon

We received CMS approval for our 222-92, RHC/FQHC system, Transmittal 11 software, on 7/29/2013.  This was posted to our web site on 8/2/2013, as version 11.1.146.0.  T.11 must be used for all FYE on or after 4/1/2013.  This is to reflect the Sequestration changes.  The Bad Debt changes are also reflected in this version, and are effective for FY Begin 10/1/2012 and after.

We received CMS approval for our 2540-10, SNF system, Transmittal 5 software, on 7/31/2013.  This was posted to our web site on 8/6/2013 as version 5.1.146.0.  T.5 must be used for all FYE on or after 4/1/2013.  This is to reflect the Sequestration changes.  The Bad Debt changes are also reflected in this version, and are effective for FY Begin 10/1/2012 and after.

We received CMS approval for our 265-11, ESRD system, Transmittal 2 software, on 8/5/2013.  This was posted to our web site on 8/6/2013 as version 2.1.146.0.  T.2 must be used for all FYE on or after 4/1/2013.  This is to reflect the Sequestration changes.  The Bad Debt changes are also reflected in this version, and are effective for FY Begin 10/1/2012 and after.

We are awaiting approval of our HHA, 1728-94 system, for Transmittal 16; and for our 2088-92, CMHC system, Transmittal 9.  Both have been submitted to CMS for approval.

We have NOT seen the Hospital Transmittal #4, which will have the Sequestration and Bad Debt changes.  When CMS issues T.4, we will then have to go through the approval process, which can take 4-8 weeks.

Sequestration is effective for Services rendered on or after 4/1/2013.  It will be prorated for FYE overlapping 4/1/2013 (e.g. a 6/30/2013 FYE has 91 days of Sequestration, so 91/365, times 2%, will be the reduction percentage, or about .50%).  Bad Debt changes are effective for FY Begin 10/1/2012 and after, so a 7/1/2012 to 6/30/2013 FY is not affected.

We are awaiting the Hospital (2552-10) Transmittal #4 from CMS, which is to have the Sequestration and Bad Debt Changes (as well as other changes for the ACA).  CMS has not released a draft of T-4 as of 7/25/2013.  This will be our Version 4.x.x.x.

We received Transmittal #5 for the 2540-10 (SNF), which incorporated the Sequestration and Bad Debt changes.  We have submitted a test case and are awaiting CMS approval of our system.  This will be our Version 5.x.x.x.

We received Transmittal #2 for the 265-11 (ESRD), which incorporated the Sequestration and Bad Debt changes.  We have submitted a test case and are awaiting CMS approval of our system.  This will be our Version 2.x.x.x.

We received Transmittal #16 for the 1728-94 (HHA), which incorporated the Sequestration and Bad Debt changes.  We have submitted a test case and are awaiting CMS approval of our system.  This will be our Version 16.x.x.x.

We received Transmittal #11 for the 222-92 (RHC/FQHC), which incorporated the Sequestration and Bad Debt changes.  We have submitted a test case and are awaiting CMS approval of our system.  This will be our Version 11.x.x.x.

We received Transmittal #8/9 for the 2088-92 (CMHC), which incorporated the Sequestration and Bad Debt changes.  We have submitted a test case and are awaiting CMS approval of our system.  This will be our Version 9.x.x.x.

The 216-94, OPO system, is the only approved system “on the street” with the Sequestration changes incorporated (Bad Debt is N/A).  This is our Version 5.4.145.0.

CMS released a Draft of the new Hospice, 1984-14 forms and instructions for industry comments 5/29/2013.  This is to be effective for FY Begin 1/1/2014 and after.  Once comments are addressed and CMS issues the Final, we will know more about what changes are to be made.

CMS is in the process of revising all Medicare Form sets, to modify them for Sequestration and the Bad Debt Changes.  The Bad Debt changes are effective for FY BEGIN on or after 10/1/2012, so they do NOT affect the reports now being filed (unless a short period report).  Sequestration is in effect, for Services on or after 4/1/2013, so a 6/30/2013 FYE, due on 11/30/2013, would have 91 days of Sequestration.  Sequestration is prorated, and Bad Debts are NOT.

We received Transmittal #5 for the OPO, 216-94 form set, with these changes, and this is in our current version, 4.4.141.0 (Bad Debts are N/A).  We received Transmittal #8 for the 2088-92 (CMHC) form set, and it incorporates the Sequestration and Bad Debt changes.  We received a Draft Transmittal #16 for the 1728-94 (HHA), and it will have these changes when finalized.  We received Transmittal #5 for the 2540-10 (SNF), and we are awaiting CMS issuance of a new Test Case, and our subsequent approval for this change.  We have NOT yet received Transmittal #4 for the 2552-10 (Hospital), nor the 265-11 (ESRD), or 1984-99 (Hospice) – although we hear there is a new 1984-14 Hospice, to be issued soon, effective for FY Begin 1/1/2014 and after.  We have not yet received anything for the 222-92 (RHC/FQHC).

Once we receive and finalize all of these changes, we will post updated software.

I have modified the original Blog post to clarify that Sequestration takes effect 4/1/2013, but the Law was signed 3/1/2013.

Sequestration was signed into Law 3/1/2013, and is to be a 2% reduction in the cost report, effective for services on or after 4/1/2013.  CMS has indicated they are revising all Medicare Cost Report form sets (2552-10, 2540-10, 265-11, 1728-94, 1984-99, 2088-92, and 216-94) to add a line for this Sequestration adjustment.  We have see a Draft of the HHA, 1728-94 forms, and as an example, W/S RF-3 has a new added line 24.01 for Sequestration.  We understand this is to be pro-rated for FY overlapping 4/1/2013, such that a 6/30/2013 FYE would have 61 days of Sequester (61/365ths) or 0.167123 times 2% reduction, or 0.334246% rounded to 0.33%.  We are awaiting final CMS instructions, and will update our software when we receive same.

CMS issued the final Transmittal #3, on October 19, 2012.  HFS was approved on November 27, 2012.  Most of the T.3 changes were already incorporated in HFS’s system, through prior CMS interim communications.  The new issues are: S-2 part I, line 39 for Low Volume eligibility, and a W/S E part A “worksheet” to compute the Low Volume Adjustment; S-3 part IV pension worksheet; S-10 line 1 RCC now uses W/S C line 202 instead of line 200 (i.e. Observation Bed cost is subtracted); W/S E-3 part II added new line 4.01 for displaced FTE; W/S E-3 part III added line 5.01 for displaced FTE.  Transmittal #4 is in the works, and will include the Sequestration changes, Bad debt reduction changes (30% reduction goes to 35%), as well as other issues.

CMS issued Transmittal #4 on 11/16/2012.  HFS was approved on 1/22/2013.  T.4 removed line 40 from W/S S-2 part I, and modified lines 18 and 43 for “Related Organization” costs.  If you have related organization cost but NOT Home Office cost, then line 18=Y and line 43=N, and lines 44-47 are left Blank.  If you have related organization cost, including Home Office cost, then line 18=Y and line 43=Y, and lines 44-47 MUST be completed.  W/S A-8-1 must be completed if either line 18 or 43 = Y.  W/S S-3 part V effective date was clarified to be FY Begin 1/1/2012 and after.  W/S D-1 part II, line 3 was clarified to ONLY be for the SNF component (not NF).  W/S I-3 for RHC settlement, line 19 was modified to NOT include line 17 (Deductibles) in the calculation.  Several CMS edits were modified or added.  Transmittal #5 is in the works, and should include the Sequestration changes, Bad debt reduction changes (30% reduction goes to 35%), as well as other issues.

CMS issued a Draft Transmittal #16 on 2/6/2013, and revised this on 3/11/2013.  This Draft T.16 is to primarily implement the W/S RF-3 changes for the clinic Medicare Program Preventative Services, which eliminated the deductibles and coinsurance for these services, effective 1/1/2011.  W/S RF-3 also added a new line 24.01 for Sequestration.  CMS added a new line 9.01 to W/S S-2, for “Full” Medicare utilization (enter F), if the report is not a Low or No utilization.  W/S S-4 line 16 added a new column 3 for “total” visits.  CMS clarified that W/S D part II, line 19 (Bad Debts), is N/A for HHAs.  We will shade this line.  W/S CM-2 added the Bad Debt Reductions for HHA based CMHC units.  For FY Begin 10/1/2012 and after, the reduction is 12% for 10/1/2012 to 9/30/2013; 24% for 10/1/2013 to 9/30/2014; and 35% for FY Begin 10/1/2014 and after.

HFS’s new 2552-10 Medicare cost reporting software for Hospitals, was approved by CMS on 10/31/2011.

The 2552-10 MUST be used for FY Begin on or after 5/1/2010, unless it is a short period report.

Short period reports with FY Begin 5/1/2010 or after, and ending prior to 10/1/2010 must file and settle on the 2552-96.  Short period and Terminating reports, NOT qualifying for HIT, with FY Begin 10/1/2010 and after, but ENDING prior to 4/30/2012, must file and settle on the 2552-96.

Extensions were granted for hospitals with FY Begin between 3/31/2011 and 9/30/2011, but all FYE of 10/31/2011 and after, must file on the regularly scheduled due date (i.e. 5 months after their FYE).

You can NOT open a 2552-96 report and “roll it forward” to be a 2552-10.  You must create a new 2552-10 file (FILE, New), and then you can use our Template feature to import the prior year structure (S-2 info, cost center additions/deletions, etc.).

HFS’s new 2540-10 Medicare cost reporting software for Skilled Nursing Facilities (SNFs), was approved by CMS on 3/23/2012.

The 2540-10 MUST be used for FY Begin on or after 12/1/2010, unless it is a short period report with a FY Begin of 12/1/2010 or after, and ending prior to 11/30/2011, for these short period reports, the 2540-96 MUST be used.

You can NOT open a 2540-96 report and “roll it forward” to be a 2540-10.  You must create a new 2540-10 file (FILE, New), and then you can use our Template feature to import the prior year structure (S-2 info, cost center additions/deletions, etc.).  There are no extensions for the 2540-10 reports.