The IRS instructions limit hospitals to reporting only those Medicare costs included in the Medicare Cost Report (Cost Report). The rationale was that the Cost Report would provide an independent basis for verification. There are significant Medicare-related costs beyond those reflected on the Cost Report that can be disclosed in Part VI, line 1. Please be aware that the amounts reported in this section are unlikely to accurately reflect the full unreimbursed cost of Medicare and, therefore, may show a surplus when there is actually a shortfall.
Organizations should use the specific lines from their Medicare cost report to determine their total costs of care. Click here to access one calculation of the Medicare cost of care using the Medicare Cost Report.