During discussions with billing subject matter experts responsible for completing the annual cost report for Certified Community Behavioral Health Clinics (CCBHCs) prospective payment system (PPS) billing, we discovered that it is more of an art than a science. Completing the report accurately requires attention to numerous nuances, and proficiency develops with experience over time. One valuable lesson learned is the importance of referencing the previous year’s cost report when preparing for the upcoming fiscal year, as it provides valuable insights for learning from the past. It’s crucial to remember that the cost report involves not only predicting costs but also forecasting visits, which can be particularly challenging. Allocating ample time for completing the cost report is highly advised. Below, are the top twelve tips gathered during these discussions, which you should consider when completing a cost report for a certified CCBHC with PPS billing:
1. Assemble a Team
Pulling together all the data for the cost report requires a team. Suggestions for team members include:
- Human Resources
- Report Writer
2. Assemble all Reports and Materials
Examples of the types of reports you will need to assemble are as follows:
- Depreciation and capitalized HIT
- Trial Balance Sheet from the audited financials
- Audits (to be submitted with cost reports)
- Payroll Report by credentials, separated by cost report category (direct, administrative, and non-CCBHC).
- Direct costs (non-payroll and benefits)
- Facility costs (non-payroll and benefits)
- Administrative costs (payroll & benefits – admin staff and facility staff; and all other administrative expenses).
- Non-CCBHC costs
- Approved Indirect rate.
- Visit count separately by job title, program type, staff credential type.
3. Attend all State Trainings
It is common for the state to provide recorded or live trainings on completing the cost report. It is highly recommended to take full advantage of any training opportunities offered. The state’s trainings can provide valuable insights, detailed instructions, and guidance on successfully completing the cost report. By actively participating in these trainings, you can acquire a greater understanding of the process, gather essential details, and receive clear directions. Leveraging the resources provided by the state will significantly enhance your chances of successfully completing the cost report.
4. It is an Ongoing Process
Preparing for the completion of the cost report for a CCBHC is an ongoing process. Although the bulk of the work will be done in the last quarter of the fiscal year, there are indicators you will need to monitor throughout the year. Such indicators include:
- Staff management: Movement of staff (i.e., from an admin role to provider role)
- Change in credentials (i.e., from an RN to a CNP)
- Adding new program (s)
- Grant management: careful watch on costs being billed against grant throughout the year.
- changes in provider productivity
5. Budget for Future Growth
Be sure to include any additional staff you may have to add due to the increase in caseloads once program(s) take off. The plan for your CCBHC is to grow your client base. Be sure to include that growth when predicting the number of visits. Check with your state’s allowance for additional costs.
6. Define a “Visit”
You will need to be sure you have a strong definition of what the state defines as a “visit”. Do telehealth visits count? What about telephone only visits? Collateral visits will not count. Be clear about what can be included and what cannot early on.
7. Beware of Dupes
This is a major concern and will require careful analysis. When counting your current visits, beware of duplicates. You must report unduplicated services. You should only count one visit per day per client.
8. Client Mix /Client Acuity
When attempting to forecast the number of visits your agency will provide within a given timeframe, it is essential to take into account the acuity mix of the individuals you serve. The acuity level of the people you serve is directly proportional to the number of services you will deliver. Therefore, it is crucial to project your visits by considering a higher number of individuals with higher acuity. If, in reality, you end up with fewer individuals of high acuity than projected, you may not be able to meet your visit projections. Therefore, accurately assessing and incorporating the acuity mix is vital for ensuring realistic and achievable visit projections.
9. Account for Medicaid Economic Index (MEI)
MEI is for accounting for yearly increase due to cost of living. It’s not always easy to find the current MEI. Contact the state to ensure you are using the correct one.
10. Retain all Back up Materials to Support Projections
Ensuring the utmost importance, it is crucial to maintain a comprehensive electronic file containing all the reports you utilized and the spreadsheets you constructed to calculate costs and visits. Additionally, it is essential to include narrative explanations or notes detailing the reasoning behind the decisions you made while performing these calculations. By documenting the rationale behind your calculations, you can provide a clear and transparent record of your methodology and decision-making process.
11. Visits by Payer Report
It is recommended that you keep a “visit by payer report” for your own records. While this report is not mandatory, the Center for Medicare and Medicaid (CMS) may request it during their review of your cost report. It’s important to note that the state will first review your cost report before forwarding it to CMS for their own review. During this process, it is likely that CMS will have some questions, and the final version of your cost report will involve iterative revisions. It is common for CMS to inquire about the number of visits by payer, so having this information readily available can be helpful.
12. To Hire or Not to Hire a Consultant:
If your organization’s structure and expenses are relatively simple, you might consider seeking assistance from an accounting firm that is familiar with the CMS cost report. They could potentially help you navigate through the process. However, if your organization is more complex, involving multiple grants and a combination of clients in the Certified Community Behavioral Health Clinic and those outside of it, what you truly need is an advisor. In this case, it is advisable to approach the state for guidance in order to ensure clarity on what expenses can be included in the cost report and what should be excluded.