The Centers for Medicare & Medicaid Services (CMS) on Dec. 27 released a Questions and Answers (Q&A) document providing guidance on worksheet S-10 of the Medicare cost report.

Hospitals use the worksheet S-10 to report uncompensated care data to CMS. The agency began using the worksheet to calculate Medicare disproportionate share hospital (DSH) payments in fiscal year (FY) 2018.

The new guidance follows a set of revisions CMS made to the worksheet in September 2017. In response to requests for clarity following the FY 2018 Inpatient Prospective Payment System (IPPS) final rule, the Q&A:

  • defines courtesy discounts, which are not included as uncompensated care, and clarifies the difference between self-pay/uninsured discounts and courtesy discounts;
  • notes that a hospital’s written charity care or financial assistance policy (FAP) must explicitly include self-pay discounts to be written off as charity care, even if state law requires self-pay discounts;
  • defines when a bad debt is considered to be “written off”;
  • clarifies when unpaid coinsurance and deductible amounts can be reported as charity care  instead of bad debt;
  • discusses how to treat unpaid coinsurance and deductible amounts for Medicare Advantage patients;
  • states that charges for Medicaid noncovered services must be specified in the charity care policy or FAP;
  • details the procedure for revising worksheet S-10 of cost reports that already have been settled (through a request for reopening to the Medicare administrative contractor); and
  • reiterates that revisions to FY 2014 and FY 2015 cost reports are limited to lines 20, 22, 25, and 26 of worksheet S-10.

Hospitals should review the guidance to ensure their written charity care and FAPs are consistent with CMS’ policy.

Contact Director of Policy Erin O’Malley at or 202.585.0127 with questions.