CMS recently updated and revised the Skilled Nursing Facility (SNF) Complex Cost Report forms, the first revision in 15 years. Per the updated Medicare Provider Reimbursement Manual, the new CMS-2540-24 forms will replace the existing CMS-2540-10 forms, beginning with provider reporting periods ending on or after September 30, 2025.
The changes to the cost report forms are intended to allow Medicare to:
- Obtain more relevant data for rate-setting
- Refine SNF Market Basket modeling
- Possibly develop an SNF wage index
- Better calculate program margins
- Make recommendations to legislators
The purpose of the cost report is not changing, nor are the standards of what costs are allowable; however, the updated forms will require additional data from providers that historically have not been reported.
Providers can expect to see a new look to some of the worksheets in the report. The more significant revisions may require providers to review how they are recording their internal data to capture additional information needed. A few of the more substantial form modifications include the following:
- Reporting of Medicare Advantage/Medicare HMO days, Medicaid HMO days, admissions, and discharges will be done separately on Worksheet S-3, Part I – Visits and Census Data.
- Reporting of the revenue for room and board and ancillaries for different payors, including Medicare Advantage/HMO and Medicaid HMO stays separately, will be required on Worksheet G-2 – Statement of Patient Revenues and Operating Expenses. It may also benefit providers to record ancillary expenses related to Medicare Advantage/Medicare HMO stays separately from traditional Medicare expenses in their general ledger.
- Contract labor expenses will be reported in a separate column on Worksheet A – Reclassification and Adjustment of Trial Balance Expenses. This includes contract labor expenses for direct care positions AND any contract labor provided by vendors/individuals reported on an IRS Form 1099. Reporting of contract labor hours appears only to be required for direct care positions. In addition, providers with Home or Central Office direct care contract labor costs must report them by position on Worksheet S-3, Part V-SNF Reporting of Direct Care Expenditures.
- Quality Assurance and Performance Improvement (QAPI) program costs will be reported in its own cost center on Worksheet A. This could include the labor cost for staff in charge of the program, the medical director expense required by 42 CFR 483.70(h), and other expenses associated with these programs as described in 42 CFR 483.75.
- Training and In-Service Education will be reported in its own cost center on Worksheet A. This could include labor and other expenses related to facility-required in-services, as well as the Nurse Aide Training and Competency Evaluation Program (NATCEP).
- Patient Transportation Part A will be reported in its own cost center on Worksheet A. This could include costs incurred for transportation covered under Part A, which is the responsibility of the SNF.
- IV therapy costs for administering IV fluids, drugs, or blood products will be reported separately from drug and supply costs on Worksheet A.
- IV solutions costs incurred for colloid and crystalloid solutions will be reported separately on Worksheet A from other drug or supply costs.
- The cost of the preventative (not therapeutic) pneumococcal, influenza, or COVID-19 vaccines and monoclonal antibody products for treating COVID-19 for residents will be reported separately in a Preventative Vaccines cost center on Worksheet A. However, the medical supplies related to the administration of the vaccines will be reported elsewhere.
- If providers operate an approved lab and have their own Clinical Laboratory Improvement Amendments (CLIA) number or a CLIA certificate of waiver that meets the requirements in 42 CFR 493, then that information will be reported on Worksheet S-2 – Identification Data.
Some of the changes in the CMS 2540-24 Skilled Nursing Facility Complex Cost Report forms have simplified sections of the report, eliminating worksheets and cost centers. Other changes add new reporting burdens. Medicare estimates a net zero impact on providers.
From experience, we anticipate a learning curve for providers and their cost report preparers, including additional time commitments. We encourage providers to review their internal systems for any modifications that can be implemented before the effective date of the new forms. Doing so can help to provide the data needed more quickly.
For assistance with gauging the impact of the new forms on your accounting and record keeping, please contact a professional at Forvis Mazars.