The Medicare cost report for skilled nursing facilities (CMS-2540) recently underwent significant revisions — the first major redesign in well over a decade. These changes affect how revenue, census, and cost data must be reported. Providers need to be aware of these changes in order to provide the most accurate data to CMS.
Key changes:
Separate payor reporting: Census statistics and revenues must now be reported separately for Medicare FFS, Medicare HMO, Medicaid, Medicaid HMO, and other payors. This is a shift from prior periods where many payors were grouped together
More detailed cost centers: SNFs must now break out contract labor costs separately from other non-salary costs
Streamlined worksheets: Worksheets E, E-1 and others have been reorganized (including renaming to E-2) and obsolete lines removed to align with current reporting needs
Impact: Providers and preparers should update their cost reporting systems and templates to match the new form structure and required data breakout. Errors in payor classification or missing cost details could lead to incomplete or rejected reports.
Why Do These Changes Matter?
Even though most cost report revisions are structural and form-related, the broader Medicare payment and reporting landscape influences how cost reports reflect:
Revenue reconciliation, especially from Medicare Part A (SNF PPS)
Quality and value-based payment adjustments that may increase or decrease net reimbursement prior to cost report settlement
Reporting of payor sources separately, which can affect cost allocation and ratios calculated on cost reports
Need assistance with getting prepared, additional review or added tool?
Affinity Health Services has the expertise to assist with these new changes. We can provide guidance on your collected statistics or provide additional tools that can make these new reporting requirements easier to gather. We also can assist in gathering all the necessary data points to provide to your cost report preparer.
To learn more, call us at 724-463-1010, and ask for the Finance Department, or read more about Affinity's financial advisory and compliance services on our website.