Medicare Administrative Contractor Cost Report Settlements with Audit

HHS contracts with Medicare Administrative Contractors (MACs) to process claims and cost reports and determine payment amounts to providers (Social Security Act, § 1874A(a)). MACs determine the total amount of reimbursement based on providers' cost reports. MACs perform a desk review, and at their discretion, may perform either a field audit or an in-house audit to determine the cost report's adequacy, completeness, and accuracy. Generally, some cost reports that have been audited and settled are later reopened to correct audit adjustments. CMS has stated that it does not maintain data related to the number of cost reports that are reopened, the monetary adjustments to the settlement made as a result of reopenings, or the types and/or causes of adjustments. Our objective will be to: (1) quantify the extent to which the MAC amends audit adjustments after cost reports have been audited and settled, and whether the audit adjustments contain obvious errors or are inconsistent with the law, regulations and rulings, or general instructions; (2) quantify the effect of amended audit adjustments; and (3) gain an understanding of the types and/or causes of amended audit adjustments. Initially, we will audit a single MAC, and based on the results, we may expand this work to others.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
Completed (partial)	Centers for Medicare and Medicaid Services	Medicare Administrative Contractor Cost Report Settlements with Audit	Office of Audit Services	W-00-22-35886; A-06-22-05000	2025