< Back to Thought Leadership

Worksheet S-10 Update

Over the past six months, CMS instructed all MACs to complete audits of the FFY 2015 Medicare Cost Report Worksheet S-10s. Each MAC was required to complete 50 audits (approximately 25% of all DSH eligible providers nationally), and Blue & Co. represented providers in multiple MAC jurisdictions. Here’s what we learned.

S-10 Audit Requests & Sampling:

The requests CMS made of MACs were to include:

  • Copies of Financial Assistance & Charity Care policies
  • Detailed patient listings to support charity care and bad debt expense amounts that included extensive patient demographic info, transaction codes, all payment amounts, and charges broken out by revenue code
  • Reconciliations between bad debt amounts reported on financial statements and Worksheet S-10
  • Explanations of large variances in reported amounts between current and prior year
  • Charity samples consisted of approximately 40-50 accounts and requested UBs, remittance advices and any underlying support for charity determination (proof of income, W-2s, charity applications, presumptive charity testing)
  • Verified sample charity and bad debt write-off procedures followed the Financial Assistance & Charity Care policies

Audit Results:

  • Overall, there was a major lack of consistency in auditing practices between MACs and even inconsistencies within the same MAC
  • There was very little guidance given by CMS to MACs prior to audits creating a large learning curve
  • The extensive amount of detail requested and limited timeframe to pull information given by the MACs were very troublesome for providers to supply information
  • There was a large emphasis on correctly reporting “Uninsured” vs “Insured” charity charges
  • “Expected payments” related to uninsured discount claims caused problems with every provider due to flawed CMS reporting instructions (many nationwide coalitions have been formed to protest the use of the revised FY15 Worksheet S-10 info in future uncompensated care payment calculations)

Recap:

  • It is extremely important to ensure the information reported on the initial filed cost report is accurate and addressed at the patient/transaction code level
  • For all Medicare Cost Report periods beginning on or after October 1, 2018, detailed patient listings for charity and bad debt expense will be required to be submitted with the initial cost report filing
  • It is still to be seen if CMS will allow FY 2016-2018 cost reports to revise S-10 data

 

If you have questions about your Worksheet S-10, please don’t hesitate to reach out to Nick Ficklin at nficklin@blueandco.com or your local Blue & Co. advisor

Share this article

bankruptcy tax implications for distilleries

Bottling Up Uncertainty: Understanding Bankruptcy for Distillers and Other Manufacturers

By Emma Cochran, CPA, Manager at Blue & Co. Bankruptcy – it’s something no business owner or individual wants to think about. However, with market declines, volatile tariffs, and other […]

Learn More
depreciation recapture for real estate investors

Depreciation Recapture: What Real Estate Investors Need to Know

By Omar Larios, CPA, Senior Accountant at Blue & Co. One of the most popular tax law updates from the One Big Beautiful Bill (OBBB) for real estate investors and […]

Learn More
Hospital financial outlook 2026: medical supplies and diagnostic equipment illustrating rising healthcare expenses and pressure on hospital margins

Hospital Financial Outlook 2026: Revenue Growth, Margin Pressure, and Shifting Payer Mix

The headline number from mid-2026 is technically encouraging: hospital revenue is growing. But revenue figures have a way of obscuring what’s actually happening on the margin line and right now […]

Learn More
Share this article
Share this article