Policy for Short and Long Period Cost Reports

The New York Codes, Rules and Regulations (NYCRR) Section 86-1.2(a) requires Medicare-certified hospitals to provide to the Department of Health (Department) an annual financial and statistical report using the Medicare-reported fiscal year. The report required by New York State (NYS) for Article 28 hospitals is the Institutional Cost Report (ICR). Per the Centers for Medicare and Medicaid Services (CMS) Publication 15-2, Section 102, the period is for twelve (12) months and starts the day after the previous report ends unless:

  1. The Medicare contractor or CMS Central Office approves a change in reporting period; or
  2. A short period report applies due to:
    1. being the initial cost report,
    2. end of Medicare Program participation, or
    3. a change in ownership.

Please refer to Medicare´s Provider Reimbursement Manual for further guidance on Medicare cost reporting.

Failure to timely file a complete and accurate ICR may result in a reduction of NYS payment rates. Also, certain programs, such as NYS´s Indigent Care Pool (ICP) program, rely on specific audited cost report elements to comply with Federal and State Regulations and provisions of the NYS Medicaid State Plan.

When hospitals join together, whether by merger or other combination, the following cost reports are required:

Note: The surviving hospital is the hospital that remains after the merger. The non-surviving hospital is the hospital that is subsumed in the merger/consolidation and is added as a hospital division to the surviving hospital´s operating certificate.

  • Report period is less than 12 months for the non-surviving hospital:
    1. The non-surviving hospital is required to file the final ICR for the period prior to the merger/consolidation. The period would be from the day after the previous report ends to the day prior to the merger and;
    2. The surviving hospital will file an ICR for a complete 12-month period. However, the report will include the non-surviving hospital´s data from the date of the merger to the surviving hospital´s report period end date.
    3. This reporting structure provides the information needed to consider those services in computing Medicaid DSH payments (such as determining eligibility to pass the Medicaid Inpatient Utilization Rate (MIUR) 1% test) and develop final rate calculations/reconciliations. A MIUR failure means a zero Medicaid Disproportionate Share Hospital (DSH) cap and a liability/recoupment of half of the non-surviving hospital´s final year´s annual ICP award (recoupment of the Federal Financial Participation portion of the payment).
    4. Both the non-surviving hospital´s report in A above and the surviving hospital´s report in B above will be included in the Department´s ICR audit process for that report year.
    5. If the Audited Financial Statements (AFS) that are developed for the 12-month period includes the combined information from A above and B above, the same AFS can be submitted for both ICRs to meet the AFS submission requirement.
    6. The Department may consider a surviving hospital´s timely written request to forgo the non-surviving hospital´s short year (less than 12 months) ICR report filing. Any Department approval arising from this request will include an understanding by the hospital that the non-reported ICR activity will not drive an increase in any hospital payments and the non-reporting will not prevent the recoupment of payments, including but not limited to the annual ICP award distributions, for both facilities.

      To be considered an appropriate and timely request the request must:
      1. be submitted to the Department by the ICR due date for that report year and
      2. be on the surviving entity´s letterhead signed by either the CEO or CFO of the surviving hospital.
      3. The written request should be emailed to: Hospital.ICR@health.ny.gov
  • Report period is greater than 12 months for the non-surviving hospital:
    1. Any hospital extending a reporting period greater than twelve months will provide at the time of the ICR submission a supplemental schedule of the below stated data. This supplemental schedule will be subject to audit during the ICR audit process for that report year.
      1. Exhibit 32;
      2. Exhibit 30 - Line 60 and;
      3. SPARCs data or Schedules from the Medicare cost report used to determine eligibility to pass the MIUR 1% test to receive DSH payments.
  • A closed or bankrupt hospital should complete an ICR for the final year (or portion thereof):
    1. The Department will use this final year ICR to test for the pass/failure of the hospital´s 1% MIUR. A MIUR failure means a zero DSH cap and a liability/recoupment of half of the hospital´s final year´s annual ICP award (recoupment of the Federal Financial Participation portion of the payment).
    2. The hospital´s cost report will be subject to the ICR audit process for the report year and the hospital should also be responsive to all subsequent ICR audit findings.