Knowledge base

Cost Report Audit

because of the sizeable volume of Cost Reports submitted to fiscal intermediaries, only some Cost Reports receive a full audit, including a field visit by the intermediary to the hospital to compare the Cost Reports with the hospital’s internal financial statements and records. Most Cost Reports receive only cursory review. However extensive the audit is,it is not uncommon during the process of preparing and filing the Cost Report, Notice of Program Reimbursement (NPR) and if applicable, subsequent appeals, for the Provider and Fiscal Intermediary to exchange information in order to reconcile any differences in their calculations or conflicting interpretations of Medicare regulations. As a result of this reconciliation process, the Provider sometimes prepares and files amended Cost Reports, and the Fiscal Intermediary occasionally prepares and issues amended NPRs. The lack of audits increases the likelihood of fraud.

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