Arizona Rural Health Clinic Designation Manual - Arizona Center for ...

F. RHC Cost Report
The Medicare cost report is a required form that is completed annually by all Rural Health Clinics.
Independent RHCs must complete the CMS 222-92 form and provider-based RHCs are required
to complete Worksheet M of form CMS 2552-96.
The following is an excerpt from the U.S. Department of Health and Human Services, Health Resources
and Services Administration, Office of Rural Health Policy’s Starting a Rural Health Clinic
- A How-To Manual (Available online at: http://ruralhealth.hrsa.gov/RHC/RHCmanual.htm):
This chapter will discuss the rural health clinic cost report, the process for fi ling the cost report, and an example
of a completed cost report. It is intended to provide you with an overall summary of the cost reporting
process. By also providing you with defi nitions of terms and a sample of a cost report, we hope to give you
a better understanding of how the process works.
We cannot emphasize enough the importance of getting expert advice. Expert advice should be from individuals
with experience with cost reports and specifi cally with the CMS-222 (or Schedule M) Cost Report,
as it relates to issues such as calculation of FTE, reassignment of costs, and the completion of an independent
or provider-based RHC Cost Report.
While it is possible for individual practices without signifi cant experience to complete the cost report, in
many instances there are multiple errors that occur and this is often to the fi nancial detriment of the clinic.
In addition, it is important to acknowledge that the accuracy of the data provided can have a signifi cant
fi nancial impact on the year-end cost report. We, therefore, recommend getting appropriate expert advice
when attempting to complete a Medicare Cost Report.
Form 222, the Medicare RHC cost report, (schedule M of the hospital, nursing home or home health cost
report), is a required form that is completed on an annual basis by all rural health clinics.
The cost report is a statement of costs and provider utilization that occurred during the time period covered
by the cost report. The cost report is the means by which Medicare determines how much money is due to
the provider, or due back from the provider, for RHC services rendered to Medicare benefi ciaries during the
cost reporting period. The cost report typically covers a twelve (12) month period of time and is due fi ve (5)
months from the date of the end of the fiscal year of the RHC.
There are exceptions to the twelve (12) month period covered by a cost report. The exceptions would be
due to the sale of the RHC or a change in ownership of the RHC during the twelve (12) month period; leaving
a shorter time period than twelve (12) months that would be covered by the cost report. If a clinic experiences
a change of ownership or decides to discontinue operation as an RHC, a cost report is due 150 days
from the date of ownership change or RHC termination.
On July 26, 2002, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that,
if adopted, would have required electronic submission of all RHC cost reports for cost reporting periods
ending after December 31, 2002. As of the publication of this book, that rule has not be fi nalized. The proposed
rule indicated that exceptions would be available for providers who can demonstrate that electronic
submission would represent a hardship. However, no details of the exception process were provided. The
authors anticipate the proposed rule will be fi nalized and electronic submission of RHC costs reports will
be mandatory at some point.
The maximum time period that can be covered by a fi led cost report is thirteen (13) months. There are no
extensions to file cost reports except under special circumstances, such as a natural disaster (i.e. fl ood,
earthquake, fi re, etc.). The Fiscal Intermediary generally will grant this type of extension. [A listing of the F.
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