Corporate Compliance

Tip: Cost reports

Compliance Monitor, August 25, 2010

The Office of Inspector General’s (OIG) Compliance Program Guidance for Hospitals advises hospitals to review cost reports to ensure they submit correct information. The submission of false cost reports is usually limited to certain Part A providers, such as hospitals, skilled nursing facilities, and home health agencies, which the government reimburses in part based on self-reported operating costs.

The OIG advises hospitals to have written policies and procedures that ensure compliance with applicable government rules and private payer plans. Procedures should ensure the hospital:

  • Does not claim costs unless they are based on appropriate and accurate documentation
  • Accurately allocates costs to various cost centers and supports allocations with verifiable data
  • Does not claim unallowable costs for reimbursement
  • Analyzes accounts containing both allowable and unallowable costs to determine the unallowable amount that  the hospital should not claim for reimbursement
  • Properly classifies costs

This week’s tip was adapted from The Compliance Program Effectiveness Handbook. For more information about the book or to order your copy, visit the HCMarketplace.

Most Popular