The CY 2016 OPPS Final Rule, issued on October 30, 2015, instituted new cost reporting rules prohibiting MACs from paying items that a provider has not claimed or protested on its as-filed cost report.  Importantly, these changes apply to cost reporting periods beginning on or after January 1, 2016, i.e., to cost reporting periods ending on or after December 31, 2016.  As the cost reports for FYE December 31, 2016 are due to be filed in the coming weeks, the purpose of this article is to remind providers of the increased need to ensure that all applicable items are either claimed or protested on those cost reports. 

For a full discussion of the Final Rule, please reference a previous Health Headlines report here. Notably, in the Final Rule, CMS finalized revisions to the cost reporting rules requiring providers to include an appropriate claim for a specific item on their cost reports – either by affirmatively claiming reimbursement or expressly self-disallowing the cost by filing a cost report item under protest – to be eligible to potentially receive Medicare reimbursement.  In other words, the so-called “protest requirement” has effectively gone from being a condition for Provider Reimbursement Review Board (PRRB) jurisdiction to a condition of payment altogether.  While the PRRB will now have jurisdiction to hear appeals of items that have not been claimed or protested, the PRRB will presumably find in favor of the MAC in such situations since the PRRB is bound by CMS regulations and the condition of payment has not been met.   

One important but not necessarily obvious consequence of CMS’s rule change is that providers will no longer be able to avoid CMS’s protest requirement by filing appeals when their notices of program reimbursement (NPRs) have not been issued within 12 months of the filing of their cost reports. 

Since upcoming cost report filings for FYE December 31, 2016 are the first to fall under these new rules, providers should make extra efforts to ensure that those and future cost reports are 100 percent accurate and that every appropriate item is either claimed or protested.   Providers should also consider including a “catch-all” protest item on their cost reports to help insure against unfair disallowances later. 

The Final Rule is available here (see 80 Fed. Reg. at 70552-70564).