Medicare Cost Reports (MCR)
Definition
Medicare Cost Reports (MCRs) are annual financial reports that Medicare-participating hospitals must file with their Medicare Administrative Contractor (MAC). These reports document the hospital’s costs, charges, revenues, and patient statistics for the fiscal year. CMS uses MCR data to calculate various Medicare payment adjustments, including the DSH adjustment.
For 340B purposes, the MCR is the source document for the DSH adjustment percentage that determines hospital eligibility. The DSH % is calculated from MCR data on Medicare Part A SSI patient days and Medicaid patient days. HRSA uses the most recently filed and accepted MCR to verify DSH % eligibility during registration and recertification.
Hospital-type covered entities should review their MCR data annually to monitor DSH % trends and identify any issues that could affect 340B eligibility. MCR preparation is a complex process, and errors in cost reporting can affect DSH % calculations.
Frequently Asked Questions
Why Medicare Cost Reports (MCR) Matters
The MCR is the source document for the DSH % that determines hospital 340B eligibility. Errors in MCR preparation can affect DSH % calculations and potentially threaten eligibility. Annual MCR review should include a specific focus on DSH % implications.
How Virtue 340B Uses It
Virtue 340B helps hospital-type covered entity clients understand the relationship between their MCR data and 340B eligibility, and monitors DSH % trends as part of our continuous monitoring services.