Threshold for Filing a Medicare Low Utilization Cost Report

Published 01/26/2021

The Centers for Medicare & Medicaid Services (CMS) has instructed the Medicare Administrative Contractors (MACs) to use the following defined "Low Medicare Utilization Thresholds," compared to total reimbursement amounts, to determine whether a provider qualifies to file a low utilization cost report. This directive is effective for all cost reports received on or after June 19, 2020.

  • Federally Qualified Health Clinics (FQHCs) = $50,000
  • Rural health clinics (RHCs) = $50,000
  • Community Health Mental Health Clinics (CMHCs) = $15,000. CMHCs with no outlier payments reported on the PS&R qualify for low utilization.
  • All other providers (hospital and non-hospital provider types) = $200,000

Note 1: Total reimbursement is the sum of the current interim payments on the PS&R, total bi-weekly payment (including periodic interim payments) and total lump sum adjustments.

Note 2: The above thresholds will be applied to the cost report being submitted for the entire provider complex (family). This means if a hospital cost report is being submitted with a provider-based FQHC, the Low Medicare Utilization threshold used will be the $200,000 hospital threshold amount; it will not be $250,000 (which would be the hospital $200,000 plus the FQHC $50,000 threshold).

For mailed-in submissions: if a low Medicare cost report is filed that is above these thresholds, the submission will be rejected and request that the provider file a full Medicare cost report.

Cost Reports submitted via the MCRef system on or after June 19, 2020, will receive a new error message on the eFile Cost Report Materials screen when a provider attempts to submit a cost report with "Medicare Utilization" of "Low" where the amount of total reimbursement exceeds the threshold (defined above).

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