Hospitals and other healthcare facilities are required to file a Medicare Cost Report annually.
Doctors are NOT required to file a Medicare Cost Report.
The Medicare Cost Report is used to determine if Medicare over or underpaid a hospital and to make greater policy decisions.
The Medicare Cost Report requires hospitals to report costs at the Cost Center Level...
For example, a hospital must report general costs such as laundry, cafeteria services and pharmacy.
A hospital must also report clinical costs by area such a general adult inpatient, operating room, recovery room, labor & delivery, radiology and other ancillary services.
Hospitals DO NOT report costs at the 1) Diagnosis, 2) Procedure or 3) Doctor Level.
TRUE Cost Accounting is just that... measuring costs at the diagnosis, procedure and doctor level.
Accordingly, the Medicare Cost Report does NOT require true cost accounting and as a result, the vast majority of hospitals in America do NOT DO True Cost Accounting.
Therefore, when Medicare reimburses a fixed amount for a particular procedure, a hospital cannot know if that amount does or does not cover the cost of the procedure, since it does not measure the cost of the procedure.
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