Current through Register Vol. 35, No. 18, September 24, 2024
A.
Adequate cost data:
(1) All hospitals must provide adequate cost
data based on financial and statistical records which can be verified by
qualified auditors. The hospital will submit a cost report each year. The cost
data must be based on an approved method of cost finding and on the accrual
basis of accounting. However, where governmental institutions operate on a cash
basis of accounting, cost data on this basis will be acceptable, subject to
appropriate treatment of capital expenditures.
(2) The cost finding method to be used by
hospitals will be the step-down method. This method recognizes that services
rendered by certain non-revenue-producing departments or centers are utilized
by certain other non-revenue-producing centers. All costs of
non-revenue-producing centers are allocated to all centers which they serve,
regardless of whether or not these centers produce revenue. The cost of the
non-revenue-producing center serving the greatest number of other centers while
receiving benefits from the least number of centers is apportioned first.
Following the apportionment of the cost of the non-revenue-producing center,
that center will be considered "closed" and no further costs will be
apportioned to it. This applies even though it may have received some service
from a center whose cost is apportioned later. Generally when two centers
render services to an equal number, that center which has the greatest amount
of expense will be allocated first.
B.
Reporting year: For the
purpose of determining payment rates, the reporting year is the hospital's
fiscal year.
C.
Cost
reporting: At the end of each of its fiscal years, the hospital will
provide to the department or its audit agent an itemized list of allowable
costs (financial and statistical report) on the New Mexico MAD cost reporting
form. The cost report must be submitted within five months after the close of
the hospital's fiscal year. Failure to file a report within the five month
limit, unless an extension is granted, will result in any or all of the
following: suspensions of MAD payments, suspension of the provider's medicaid
number, or a penalty of $100 per day until such time as the report and other
substantiating data is received. Extensions may be granted based on 42 CFR Part
413.
D.
Retention of
records:
(1) Each hospital will
maintain financial and statistical records of the period covered by such cost
report for a period of 10 years following the date of submittal of the New
Mexico MAD cost report to the department. These records must be accurate and in
sufficient detail to substantiate the cost data reported. The provider will
make such records available upon demand to representatives of the department,
the state of New Mexico audit agent, or the United States department of health
and human services.
(2) The
department or its audit agent will retain all cost reports submitted by
providers for a period of 10 years following the date of final settlement of
such reports.
E.
Audits:
(1)
Desk
audit: Each cost report submitted will be subjected to a comprehensive
desk audit by the state's audit agent. This desk audit is for the purpose of
analyzing the cost report. After each desk audit is performed, the audit agent
will submit a complete report of the desk review to the department.
(2)
Field audit: Field audits
will be performed on all facilities and per the auditing schedule established
by medicare. The purpose of the field audit of the facility's financial and
statistical records is to verify that the data submitted on the cost report is
accurate, complete, and reasonable. The field audits are conducted in
accordance with generally accepted auditing standards. Field audits are of
sufficient scope to determine that only proper items of cost applicable to the
service furnished were included in the provider's calculation of its cost and
to determine whether the expense attributable to such proper items of cost was
accurately determined and reasonable. After each field audit is performed, the
audit agent will submit a complete report of the audit to the department. This
report will meet generally accepted auditing standards and shall declare the
auditor's opinion as to whether, in all material respects, the costs reported
by the provider are allowable, accurate, and reasonable. These audit reports
will be retained by the department for a period of not less than three years
from the date of final settlement of such reports. Audits will be performed in
accordance with applicable federal regulations.
F.
Overpayments: All
overpayments found in audits will be accounted for on the CMS-64 report in
accordance with
42 CFR
433.300 through 42 CFR 433.322.
G.
Allowable and non-allowable
costs: Allowable costs, non-allowable costs, and reasonableness of costs
will be determined as on the basis of the medicare health insurance manual
(HIM-15).
