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

F. RHC Cost Report (con’t)
Fiscal Intermediaries for the independent RHCs is available online at: http://www.cms.hhs.gov/apps/contacts/incardir.asp].
As has been previously noted, there are two types of RHC’s - Independent and Provider-based. Each must
fi le a cost report, but the cost report is different for each of the two types of RHC’s.
All Rural Health Clinics are presumed to be independent unless the clinic requests designation as a provider-based
facility. Whereas, an independent RHC can be owned by any type of entity authorized under
State law to own a medical practice: physicians; physician assistants; nurse practitioners; certifi ed nurse
midwives; hospitals; skilled nursing facilities; home health agencies; for-profi t corporations; not-for-profi t
corporations; or government entities; only those entities recognized by Medicare as a “provider” can own
a provider-based RHC. Entities designated by Medicare as providers are: hospitals, skilled nursing facilities,
and home health agencies. Although this chapter will focus on the fi ling of an independent RHC cost
report, the provider-based RHC cost report is very similar. A provider-based cost report is fi led as a part of
the sponsoring provider’s cost report. It is prepared on Schedule M.
The following list includes the title and explanation of each worksheet contained in the RHC cost report:
•Worksheet S
This is the statistical data and certifi cation statement (requires original signature when submitted). The
statistical data includes information such as: whether the cost report is based on actual or projected cost,
time period covered, provider name, Medicare number, location, provider numbers of physicians/PAs/NPs/
CNMs, operational control, hours of operation, etc.
•Worksheet A, Columns 1 & 2
Worksheet A is used to record the trial balance of expense accounts from the provider books and records
for the cost reporting period stated. The total dollar amount of Column 1 and 2 should tie to the records of
the provider for total expenses. (Column 1 is for compensation amounts, while column 2 reports amounts
other than compensation). Column 3 is the total of Column 1 & 2. This worksheet also provides for the necessary
reclassifi cations (Column 4) and adjustments (Column 6) to certain accounts.
•Worksheet A-1, Column 4
This worksheet provides for reclassifi cation of any amounts in order to refl ect the proper cost allocation in
a given cost center. This worksheet “moves” certain amounts from one cost center to another cost center.
Supporting documentation is needed for each reclassifi cation made on this worksheet.
•Worksheet A-2, Column 6
This worksheet provides for adjustments, which are necessary under the Medicare principles of reimbursement.
Types of items to be entered on this Worksheet are 1) those needed to adjust expenses incurred {accrual
accounting} 2) those that represent recovery of expenses through refunds, sales, etc. 3) those needed
to adjust expenses that are non-allowable for Medicare purposes 4) those needed to adjust expenses in
accordance with offsets from “other/miscellaneous” income received. Supporting documentation is needed
for each adjustment made on this worksheet.
•Worksheet A-2-1, Column 6, Flows thru Worksheet A-1
This worksheet fl ows into the above worksheet A-2 at the net amount of the total adjustment. It provides
for information and amounts on related parties of the organization including costs applicable to services,
facilities, and supplies furnished to providers by a related organization or by common ownership. This worksheet
allows for any adjustments that are needed to reduce related party transactions amounts to allowable
Medicare amounts.
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