1. Hospice Cost Reporting Changes June 8, 2015 Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 1

2. 2 Cost Report Groupings  General Service Cost Centers – Overhead  Patient Service Cost Centers – Direct patient care  Non-Reimbursable Cost Centers – Activities outside of the Medicare benefit Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 2

3. 3 Overview of Changes  Expansion of cost centers and required information  Form 339 eliminated – Questions now part of cost report  Expansion of statistics – Pharmacy charges, square footage, hours of care, respite care days  Patient expenses reported by level of care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 3

4. 4 Worksheets  Worksheet A – Summary of total costs, reclassifications, adjustments, and reimbursable costs  Worksheet A-6 – Reclassifications  Worksheet A-8 – Adjustments to costs  Worksheet B and B-1 – Allocation of general service cost centers Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 4

5. 5 Worksheets  Worksheet C – Costs by payor source  Worksheet F – Financial statements Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 5

6. 6 Expansion of Cost Centers – General Service Cost Centers  Capital related costs – Buildings and fixtures  Capital related costs – Movable equipment  Employee benefits department (new)  Administrative and general costs  Plant operations and maintenance  Laundry and linen service (new)  Housekeeping (new)  Dietary (new) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 6

7. 7 Expansion of Cost Centers – General Service Cost Centers  Nursing administration (new)  Routine medical supplies (new)  Medical records (new)  Staff transportation (new)  Volunteer service coordination (new)  Pharmacy (new)  Physician administrative services (new)  Other general services (must specify) (new)  Patient/residential care services (new) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 7

8. 8 Worksheet A – Employee Benefits (New)  Line 3 - Employee Benefits.--This cost center includes the costs of the employee benefits department. In addition, this cost center includes the fringe benefits paid to, or on behalf of, an employee when a provider’s accounting system is not designed to accumulate the benefits on a departmentalized or cost center basis (See CMS Pub. 15-1, Chapter 21, §2144). Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 8

9. 9 Worksheet A – Housekeeping (New)  Line 7 - Housekeeping.--This cost center includes the cost of routine housekeeping activities such as mopping, vacuuming, cleaning restrooms, lobbies, waiting areas, and otherwise maintaining patient and non-patient care areas. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 9

10. 10 Worksheet A – Dietary (New)  Line 8 - Dietary.--This cost center includes the cost of preparing meals for patients. Do not include the cost of dietary counseling in this cost center. Report dietary counseling on Line 35. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 10

11. 11 Worksheet A – Staff Transportation (New)  Line 9 - Nursing Administration.--This cost center includes the cost of overall management and direction of the nursing services. Do not include the cost of direct nursing services reported on Lines 27 through 29. The salary cost of direct nursing services, including the salary cost of nurses who render direct service in more than one patient care area, is directly assigned to the various patient care cost centers in which the services were rendered. However, if the hospice accounting system fails to specifically identify all direct nursing services to the applicable direct patient care cost centers, then the salary cost of all direct nursing service is included in this cost center. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 11

12. 12 Worksheet A – Medical Records (New)  Line 11 - Medical Records.--This cost center includes cost of the medical records department where patient medical records are maintained. The general library and the medical library are not included in this cost center but are included in the A & G cost center. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 12

13. 13 Worksheet A – Staff Transportation (New)  Line 12 - Staff Transportation.--This cost center includes the cost of owning or renting vehicles, public transportation expenses, parking, tolls, or payments to employees for driving their private vehicles to see patients or for other hospice business. Staff transportation costs do not include patient transportation costs. Report patient transportation costs on Line 39. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 13

14. 14 Worksheet A – Pharmacy (New)  Line 14 - Pharmacy.--This cost center includes the costs of drugs (both prescription and OTC), pharmacy supplies, pharmacy personnel, and pharmacy services. Do not report the cost of palliative chemotherapy drugs on this line. Report the cost of palliative chemotherapy on Line 45. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 14

15. 15 Worksheet A – Physician Administrative Services (New)  Line 15 - Physician Administrative Services.-- This cost center includes the costs for physicians’ administrative and general supervisory activities that are included in the hospice payment rates. These activities include participating in the establishment, review and updating of plans of care, supervising care and services, conducting required face-to-face encounters for recertification, and establishing governing policies. These activities are generally performed by the physician serving as the medical director and the physician member of the interdisciplinary group. Nurse practitioners may not serve as or replace the medical director or physician member of the interdisciplinary group. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 15

16. 16 Worksheet A – Patient Residential Care (New)  Line 17 - Patient/Residential Care Services.-- Do not use this line on this worksheet. This cost center is used on Worksheet B to accumulate in-facility costs not separately identified as IRC, GIP, or residential care services that are not part of a separate and distinct residential care unit (e.g., depreciation related to in-facility areas that provide IRC, GIP or residential care). The amounts allocated to this cost center on Worksheet B are allocated to IRC, GIP, and residential care services that are not part of a separate and distinct residential care unit, based on in-facility days. This cost center does not include any costs related to contracted inpatient services. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 16

17. 17 Worksheet A – Patient Residential Care (New)  Line 17 - Patient/Residential Care Services.-- When a residential care unit is separate and distinct and only used for resident care services (such as hospice home care provided in a residential unit), costs are reported directly on Line 66. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 17

18. 18 Expansion of Cost Centers – General Service Cost Centers  The chart of accounts should provide for each general service cost center.  At a minimum, salaries and wages, and other costs must be identified for each general service cost center.  Not all hospices will require every cost center. As an example, many hospices will not require a housekeeping cost center. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 18

19. 19 Expansion of Cost Centers – General Service Cost Centers  General service cost centers are reported on Worksheet A which carries forward to Worksheet B.  Must report administrative and general, volunteer service coordination, pharmacy, and plant operations and maintenance costs (Level 1 edits). Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 19

20. 20 Worksheet A – General Service Cost Centers Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 20

21. 21 Patient Care Costs – Worksheets A-1 through A-4  Inpatient Care  Physician Services  Nurse Practitioner (new)  Registered Nurse  LPN/LVN (new)  Physical Therapy  Occupational Therapy  Speech Therapy Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 21

22. 22 Patient Care Costs – Worksheets A-1 through A-4  Medical Social Services  Spiritual Counseling  Dietary Counseling  Other Counseling  Aide and Homemaker  DME/Oxygen  Patient Transportation  Imaging Services Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 22

23. 23 Patient Care Costs – Worksheets A-1 through A-4  Labs and Diagnostics  Medical Supplies – Non-routine  Outpatient Services  Palliative Radiation Therapy (new)  Palliative Chemotherapy (new)  Other Patient Care Services (specify) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 23

24. 24 Patient Care Costs – Worksheets A-1 through A-4  The chart of accounts must account for each patient care cost center.  Each cost center must, at a minimum, detail salaries and wages and other costs.  Patient care costs are reported by level of care on Worksheets A-1 through A-4. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 24

25. 25 Patient Care Costs – Worksheets A-1 through A-4  Expense accounts for direct patient care need to be broken down by level of care, for example:  RN salaries general  RN salaries continuous care  RN salaries routine home care  RN salaries inpatient respite care  RN salaries general inpatient care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 25

26. 26 Patient Care Costs – Worksheets A-1 through A-4  Expense accounts for direct patient care need to be broken down by level of care, for example (Cont.):  Other costs general  Other costs continuous care  Other costs routine home care  Other costs inpatient respite care  Other costs salaries general inpatient care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 26

27. 27 Patient Care Costs – Worksheets A-1 through A-4 If patient care costs are not identified by level of care in the general ledger, then an accounting of the costs by level of care will be required when preparing the cost report. In this case, costs will generally be allocated by patient days, patient visits, or time records. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 27

28. 28 Patient Care Costs – Worksheets A-1 through A-4 If an accounting is required to identify patient care costs by level of care, then reclassification entries will be required in the general ledger or cost report, which can be quite time consuming. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 28

29. 29 Patient Care Costs – Worksheets A-1 through A-4  If the following direct care costs are not reported by level of care it will result in Level 1 edits:  Registered nursing costs  Aide costs  Homemaker costs  DME/oxygen costs  Lab costs Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 29

30. 30 Worksheet A-1 – Continuous Care Costs Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 30

31. 31 Worksheet A-2 – Routine Home Care Costs Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 31

32. 32 Worksheet A-3 – Inpatient Respite Care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 32

33. 33 Worksheet A-4 – General Inpatient Care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 33

34. 34 Non-Reimbursable Cost Centers  Bereavement programs  Volunteer programs  Fundraising  Hospice/Palliative Medicine Fellows (new)  Palliative care program (new)  Other physician services (new) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 34

35. 35 Non-Reimbursable Cost Centers  Residential care  Advertising (no longer just an expense account to be adjusted)  Telehealth/Telemonitoring (new)  Thrift store (new)  Nursing facility room and board (new)  Other Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 35

36. 36 Non-Reimbursable Cost Centers  The chart of accounts must account for each non-reimbursable cost center.  Each cost center must, at a minimum, detail salaries and wages and other costs.  Non-reimbursable cost centers are reported on Worksheet A. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 36

37. 37 Chart of Accounts  Make sure the chart of accounts covers all of the general service, patient care, and non-reimbursable cost centers.  Create accounts or subaccounts by level of care for patient care cost centers.  Segregate all facility costs by facility. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 37

38. 38 Worksheet B-1 – Allocation of General Service Costs  Capital related costs: Buildings & Fixtures - Square footage  Capital related costs: Moveable Equipment - Dollar value  Employee benefits - Gross salaries  Administrative and general costs - Accumulated costs  Plant operations and maintenance - Square footage  Laundry and linen service - In facility days  Housekeeping - Square footage  Dietary - In facility days Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 38

39. 39 Worksheet B-1 – Allocation of General Service Costs  Nursing administration - Direct nursing hours  Routine medical supplies - Patient days  Medical records - Patient days  Staff transportation - Mileage  Volunteer service coordination - Hours of service  Pharmacy - Charges  Physician administrative services - Patient days  Other general services (must specify basis)  Patient/residential care services - In facility days Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 39

40. 40 Worksheet B-1 – Allocation of General Service Costs  General service costs are allocated to patient care and non-reimbursable cost centers based on statistics.  Square footage – identifying room, dimensions of room, computed square feet, and use of room.  Dollar value – property and equipment cost including lease payments by cost center.  Volunteer hours – purpose and number of hours by cost center. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 40

41. 41 Worksheet B-1 – Allocation of General Service Costs  General service costs are allocated to patient care and non-reimbursable cost centers based on statistics (Cont.):  Pharmacy charges – by level of care/cost center.  Miles traveled – owned/leased vehicles and mileage paid to staff by cost center. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 41

42. 42 Worksheet B-1 – Allocation of General Service Costs  General service costs are allocated to patient care and non-reimbursable cost centers based on statistics (Cont.):  Patient care days –  By level of care and payor class  In-facility days by level of care by facility  Contract days (inpatient respite and general inpatient) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 42

43. 43 Worksheet B-1 – Order of Allocation The ordering of allocations has changed. Plant operations/maintenance and volunteer service coordination costs are allocated AFTER administrative and general costs. You can no longer allocate these costs to administrative and general and step down from there. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 43

44. 44 Worksheet B-1 – Order of Allocation Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 44

45. 45 Worksheet B-1 – Order of Allocation Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 45

46. 46 Worksheet B-1 – Order of Allocation Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 46

47. 47 Worksheet B-1 – Order of Allocation Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 47

48. 48 Square Footage Records  Capital-related building, Plant Operation and Maintenance, and Housekeeping costs are allocated on the basis of square footage (Capital related equipment separately discussed)  Using schematic or other source – prepare detailed list of square footage  Each building should be segregated in the accounting records and square footage detail Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 48

49. 49 Square Footage Detail Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 49 RoomDimensionsSq FeetUseCost CenterCost Report 11528420Conference RoomAdministration 281080Physical Therapy Nursing Admin 381080ClergySpiritual CounselingNursing Admin 412 144VolunteersVolunteer Coord 51210120Nursing Admin 61215180AdministratorAdministrative - Gen 712 144Dir of FundraisingFundraising

50. 50 Capital Related Movable Equipment  CMS – “We are retaining the proposed statistical basis of dollar value to allocate costs for Movable Equipment on Worksheets B and B-1. While that statistical basis is the recommended basis of allocation, if a more accurate result is obtained by allocating costs on an alternative basis (i.e. square feet), the hospice must request approval in accordance with CMS Pub. 15-1, chapter 23, §2313.”  We are not aware of any hospices using “dollar value”  Consider request to change to square footage Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 50

51. 51 Volunteer Service Coordination  Volunteer Services Coordination is allocated after Administrative and General Service costs  These activities are allocated on the basis of direct volunteer hours. These are level of care hours. In-home hours will generally be treated as routine home care hours. Volunteer hour records are critical.  Order of allocation – potential problem (more so for tax exempts).  Volunteer hours focus on administrative activities, aides/homemakers/fundraising.  Too much expense may get charged to fundraising as a result of when these costs are allocated.  Options  Reclassification/change of allocation. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 51

52. 52 Tracking Volunteer Hours Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 52 Volunteer Hour Summary ActivityHours Administrative and General Laundry and Linen Service Housekeeping Dietary Nursing Administration Medical Records Inpatient Facility Contracted Inpatient Facility Patient Residence - Patient Support Bereavement Fundraising Palliative Care Program Marketing and Advertising Thrift Store Total

53. 53 Volunteer Coordination Option  Accumulate Volunteer Service Coordination costs on Worksheet A.  Reclassify a portion of Volunteer Services Coordination costs to Administrative and General Service Costs based on volunteer hours if an enhancement to cost finding.  Allow remaining costs to be subjected to the regular allocation process as the Administrative and General component has already been removed. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 53

54. 54 Volunteer Hours – Inpatient  Volunteer hours provided in freestanding inpatient units need to be tracked  These hours will be recomputed, unless tracked by level of care, based on in- facility days:  Inpatient  Respite  Routine home care Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 54

55. 55 Requests for Changes in Allocations or Statistics  Requests  Change in order of allocation – rule is 90 days before the end of cost reporting year (where the cost center would fall in the allocation process)  Statistics – rule is 90 days before the end of cost reporting year (change in the recommended statistic, i.e. square feet)  File Change Requests as soon as possible to be able to plan – MAC has 60 days to respond or change is automatically approved (sample letter) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 55

56. 56 Example Statistics Request Letter – Movable Equipment ABC Hospice (“Hospice”), PTAN 01-001 is a Medicare-certified hospice and is required to submit Hospice Cost & Data reports on an annual basis. The Hospice hereby requests, in accordance with CMS Pub. 15-1, Chapter 23, Paragraph 2313 to change the base for allocating Capital Movable Equipment costs on Worksheet B-1 from “equipment dollar value” to square feet. The revised Hospice Cost & Data Report (CMS 1984-14) is effective for cost reporting years beginning on or after October 1, 2014. The recommended statistic for the allocation of Capital – Movable Equipment costs on Worksheet B-1 is “equipment dollar value.” The Hospice has not retained property and equipment records that would enable the Hospice to sufficiently accumulate and use “equipment dollar value” for purposes of causing an effective or accurate allocation of Capital – Movable Equipment costs on Worksheet B-1. The Hospice’s principal use of items of equipment is administrative and patient care related. Accordingly, ABC Hospice hereby requests the use of square feet on Worksheet B-1 as the statistical basis for the allocation of Capital - Movable Equipment costs. Like other Medicare providers, i.e. home health agencies and hospitals, the use of square feet would cause these costs to be more appropriately allocated to reimbursable and non-reimbursable activities than poorly constructed records attempting to reflect “equipment dollar value.” This request for the alternative base for allocating Capital - Movable Equipment costs is requested for, and would be applicable to the cost reporting year beginning on January 1, 2015 and ending on December 31, 2015. The Hospice understands that upon approval the change will be effective for this year and subsequent years. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 56

57. 57 Order of Allocation Change Request ABC Hospice (“Hospice”), PTAN 01-001 is a Medicare-certified hospice and is required to submit Hospice Cost & Data reports on an annual basis. The Hospice hereby requests, in accordance with CMS Pub. 15-1, Chapter 23, Paragraph 2313 to change the order in which cost centers are allocated on Worksheets B and B-1 on its Hospice Cost & Data Report effective for the cost reporting year beginning on January 1, 2015. The revised Hospice Cost & Data Report (CMS 1984-14) is effective for cost reporting years beginning on or after October 1, 2014. The cost center, Plant Operation and Maintenance, is allocated immediately after the allocation of Administrative and General Costs. This allocation of Plant Operation and Maintenance costs is made on square feet. The majority of Plant Operation and Maintenance costs relate to square footage used for administrative activities. Accordingly, allocating Plant Operation and Maintenance costs subsequent to the allocation of Administrative and General costs would significantly distort the allocation of these facility related costs. The Hospice hereby requests that effective for cost report periods beginning on or after January 1, 2015 that Plant Operations and Maintenance costs be allocated immediately prior to the allocation of Administrative and General costs. This change in the order or allocation of costs on Worksheet B significantly enhances the quality of the financial information reported in the Hospice Cost & Data Report of ABC Hospice. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 57

58. 58 Allocation of Admin To Contracted Inpatient Costs  When the hospice contracts for general inpatient or inpatient respite care, the amount of the contracted payment is used to reduce the accumulated cost statistic on Worksheet B-1, Column 4A, Line 52 or 53.  The impact is to reduce the amount of administrative-general costs that will be allocated to contracted general inpatient and respite care costs (important – based on rate setting). Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 58

59. 59 Order of Allocation Change Request ABC Hospice (“Hospice”), PTAN 01-0001 is a Medicare-certified hospice and is required to submit Hospice Cost & Data reports on an annual basis. The Hospice hereby requests, in accordance with CMS Pub. 15-1, Chapter 23, Paragraph 2313 to change the order in which cost centers are allocated on Worksheets B and B-1 on its Hospice Cost & Data Report effective for the cost reporting year beginning on January 1, 2015. The revised Hospice Cost & Data Report (CMS 1984-14) is effective for cost reporting years beginning on or after October 1, 2014. The cost center, Volunteer Services Coordination, is allocated after the allocation of Administrative and General Costs. This allocation of Volunteer Services Coordination costs is made on the basis of “volunteer hours.” A substantial portion of the volunteer hours are provided in support of administrative activities of the Hospice. Accordingly, allocating Volunteer Services Coordination costs subsequent to the allocation of Administrative and General costs would significantly distort the allocation of these costs. The Hospice hereby requests that effective for cost report periods beginning on or after January 1, 2015 that Volunteer Services Coordination costs be allocated immediately prior to the allocation of Administrative and General costs. This change in the order of allocation of costs on Worksheet B significantly enhances the quality of the financial information reported in the Hospice Cost & Data Report of ABC Hospice. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 59

60. 60 Pharmacy  Pharmacy costs remain as a General Service Cost Center rather than a Patient Service Cost Center  Pharmacy costs are allocated on the basis of charges to each level of care  Unrelated to terminal illness (non- reimbursable, can be removed as expense adjustments)  If you have charges (standard charges by level of care, you can use this statistic) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 60

61. 61 Pharmacy  Do you have a per-diem contract? If so, you can use the contract to identify the cost by level of care (Patient Days). Costs can be substituted for charges (gross-up) or you can possibly reclassify these costs to Other Patient Care Services by LOC on Worksheet A-6 to A-1, A-2, A-3, and A-4.  Otherwise, you will need a new statistic. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 61

62. 62 Pharmacy Statistical Basis Change Request ABC Hospice (“Hospice”), PTAN 01-0001 is a Medicare-certified hospice and is required to submit Hospice Cost & Data reports on an annual basis. The Hospice hereby requests, in accordance with CMS Pub. 15-1, Chapter 23, Paragraph 2313 to change the base for allocating Pharmacy costs on Worksheet B-1 from “charges” to “patient days.” The revised Hospice Cost & Data Report (CMS 1984-14) is effective for cost reporting years beginning on or after October 1, 2014. The recommended statistic for the allocation of Pharmacy costs on Worksheet B-1 is “charges.” The Hospice has not established a charge structure encompassing all hospice pharmacy charges and charges for all payors. Accordingly, the current charge structure and charge records are insufficient to enable the Hospice to sufficiently accumulate and use “charges” for purposes of causing an effective or accurate allocation of Pharmacy costs on Worksheet B-1. ABC Hospice hereby requests the use of patient days on Worksheet B-1 as the statistical basis for the allocation of Pharmacy costs. Many hospices incur pharmacy charges on a per-diem basis and report their costs accordingly. The use of patient days would cause these costs to be more appropriately allocated than incomplete pharmacy charges and consistent with many providers being billed on a per-diem basis by pharmacy suppliers. This request for the alternative base for allocating Pharmacy costs is requested for, and would be applicable to the cost reporting year beginning on January 1, 2015 and ending on December 31, 2015. The Hospice understands that upon approval the change will be effective for the requested year and subsequent years. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 62

63. 63 Nursing Administration  Supervised hours is the statistic to be used to allocate Nursing Administration costs. These are LOC hours.  If hours can be accumulated for all disciplines by level of care, nothing else required.  If not, supporting schedule can be developed:  Salaries and wages (A-1, A-2, A-3, A-4)  Average rate per-hour used to estimate hours, which then becomes the statistic (Average rate from year-to-date payroll registers) Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 63

64. 64 Combining Requests  Request statistics separately – each request should stand on its own. Remember, requests must improve cost finding.  Request change in order together. The order of allocation request should support each of the respective changes.  Request at the earliest possible opportunity in order to be prepared at the beginning of your cost reporting year. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 64

65. 65 Worksheet F-2 – Revenues and Operating Expenses  Revenue reporting expanded to include:  Revenues by level of care (standard charges by level of care, by payor)  Contractual adjustments by payor  Other Revenues:  Hospice physician services, and room and board by payor Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 65

66. 66 Revised Cost Report Results  Medicare revenues and expenses (margin) are based on reimbursable costs, not all costs.  Costs per day by level of service are based on reimbursable costs, not all costs. Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 66

67. 67 Questions Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 67

68. 68 Contact Information  Kenneth E. Hooper, CPA/CFF, CFE, CHC 3597 E. Monarch Sky Lane Suite F240 Meridian, ID 83646 (208) 489-2538 khooper@hbeadvisors.com Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 68

69. 69 Contact Information  Leia Neely 3597 E. Monarch Sky Lane Suite F240 Meridian, ID 83646 (208) 489-2540 lneely@hbeadvisors.com@hbeadvisors.com Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 69

70. 70 Contact Information  Amy Bailey, CHC, CPC, COC (CPC-H), CPC-I, CCS-P 3597 E. Monarch Sky Lane Suite F240 Meridian, ID 83646 (208) 489-2539 abailey@hbeadvisors.com Copyright 2015 HBE Advisors LLC dba HC Healthcare Consulting 70