[Federal Register Volume 59, Number 100 (Wednesday, May 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12459]


[[Page Unknown]]

[Federal Register: May 25, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 413

[BPD-689-FC]
RIN 0938-AE80

 

Medicare Program; Uniform Electronic Cost Reporting System for 
Hospitals

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period implements the provisions 
of section 4007(b) of the Omnibus Budget Reconciliation Act of 1987, as 
amended by section 411(b)(6) of the Medicare Catastrophic Coverage Act 
of 1988, which require the Secretary to place into effect a 
standardized electronic cost reporting system for all hospitals under 
the Medicare program. Under this final rule with comment period, all 
hospitals are required to submit their cost reports, for hospital cost 
reporting periods beginning on or after October 1, 1989, in a uniform 
electronic format. The Secretary may grant a delay or a waiver of this 
requirement where implementation could result in financial hardship for 
a hospital.

DATES: Effective date: These rules are effective June 24, 1994.
    Comment date: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on July 
25, 1994. We are accepting comments concerning the requirement in 
Sec. 413.24(f)(4)(ii), that cost reporting software be able to detect 
changes to the electronic cost report made after the provider has 
submitted it to the intermediary.
ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-689-FC, P.O. Box 7517, 
Baltimore, MD 21207.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore, 
MD 21207.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-689-FC. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Thomas Talbott (410) 966-4592.

SUPPLEMENTARY INFORMATION:

I. Background

    Under Medicare, hospitals are paid for inpatient hospital services 
that they furnish to beneficiaries under Part A (Hospital Insurance). 
Currently, most hospitals are paid for their inpatient hospital 
services under the prospective payment systems for operating and 
capital costs in accordance with sections 1886(d) and (g) of the Social 
Security Act (the Act) and 42 CFR part 412. Under these systems, 
Medicare payment is made at a predetermined, specific rate for each 
hospital discharge based on the information contained on actual bills 
submitted.
    Section 1886(f)(1)(A) of the Act provides that the Secretary will 
maintain a system for reporting costs of hospitals paid under the 
prospective payment systems. Section 412.52 requires all hospitals 
participating in the prospective payment systems to meet the 
recordkeeping and cost reporting requirements of Secs. 413.20 and 
413.24, which include submitting a cost report for each 12-month 
period.
    The hospitals and hospital units that are excluded from the 
prospective payment systems are generally paid an amount based on the 
reasonable cost of services furnished to beneficiaries. The inpatient 
operating costs of these hospitals and hospital units are subject to 
the ceiling on the rate of hospital cost increases in accordance with 
section 1886(b) of the Act and Sec. 413.40.
    Sections 1815(a) and 1833(e) of the Act provide that no payments 
will be made to a hospital unless it has furnished the information, 
requested by the Secretary, needed to determine the amount of payments 
due the hospital under the Medicare program. In general, hospitals 
submit this information through cost reports that cover a 12-month 
period.
    All hospitals participating in the Medicare program, whether they 
are paid on a reasonable cost basis or under the prospective payment 
systems, are required under Sec. 413.20(a) to ``maintain sufficient 
financial records and statistical data for proper determination of 
costs payable under the program.'' In addition, hospitals must use 
standardized definitions and follow accepted accounting, statistical, 
and reporting practices. Under the provisions of Secs. 413.20(b) and 
413.24(f), hospitals are required to submit cost reports annually, with 
the reporting period based on the hospital's accounting year.

II. Legislation Concerning Electronic Reporting

    On December 22, 1987, the Omnibus Budget Reconciliation Act of 
1987, Public Law 100-203, was enacted. Section 4007 of Public Law 100-
203, which was subsequently amended by section 411(b)(6) of the 
Medicare Catastrophic Coverage Act of 1988, Public Law 100-360, added 
section 1886(f)(1)(B) of the Act, which sets forth several provisions 
concerning the reporting of hospital information under the Medicare 
program. Section 1886(f)(1)(B) of the Act applies to hospital cost 
reporting periods beginning on or after October 1, 1989.
    Section 1886(f)(1)(B)(i) of the Act provides that the Secretary 
will place into effect a standardized electronic cost reporting format 
for hospitals under Medicare. This standardized electronic cost 
reporting format does not require any additional data from hospitals. 
Section 1886(f)(1)(B)(ii) of the Act provides that the Secretary may 
delay or waive the implementation of the electronic format in instances 
where such implementation would result in financial hardship for a 
hospital. As an example of a financial hardship situation, this section 
of the Act specifically mentions hospitals with a small percentage of 
inpatients entitled to Medicare benefits.

III. Provisions of the Proposed Regulations

    On August 19, 1991, we published a proposed rule (56 FR 41110) to 
implement sections 1886(f)(1)(B) (i) and (ii) of the Act. We proposed 
that cost reports be submitted in a standardized electronic format. The 
hospital's cost report software must be able to produce a standardized 
output file in American Standard Code for Information Interchange 
(ASCII) format. All intermediaries have the ability to read this 
standardized file and produce an accurate cost report. The proposed 
rule did not require the reporting of any additional information.
    If a hospital refuses to submit the cost reports electronically, 
Medicare payments to that hospital may be suspended under the 
provisions of sections 1815(a) and 1833(e) of the Act. As explained 
above, sections 1815(a) and 1833(e) of the Act provide that no Medicare 
payments will be made to a hospital unless it has furnished the 
information, requested by the Secretary, needed to determine the amount 
of payments due the hospital under the Medicare program. Section 
405.371(d) provides for suspension of Medicare payments to a hospital 
by the intermediary if the hospital has failed to submit information 
requested by the intermediary that is needed to determine the amount 
due the hospital under Medicare. The general procedures that are 
followed when Medicare payment to a hospital is suspended for failure 
to submit information that is needed by the intermediary to determine 
Medicare payment (that is, when a hospital fails to furnish a cost 
report, furnishes an incomplete cost report, fails to furnish other 
needed information, or fails to submit a cost report electronically) 
are located in section 2231 of the Intermediary Manual (HCFA Pub. 13). 
These procedures include timeframes for ``demand letters'' to 
hospitals, which in addition to reminding hospitals to file timely and 
complete cost reports, explain possible adjustments of Medicare 
payments to a hospital and the right to request a 30-day extension of 
the due date. If a hospital believes that implementation of the 
electronic submission requirement would cause a financial hardship, the 
hospital should submit a written request for a waiver or a delay of 
these requirements, with supporting documentation, to the hospital's 
intermediary.

IV. Discussion of Public Comments

    In response to the proposed rule, we received six timely items of 
correspondence. We have summarized the comments and are presenting them 
below with our responses.

A. Requirements for Electronic Submission

    Comment: A few commenters requested clarification concerning the 
format for electronic reporting.
    Response: HCFA provided approved vendors of cost reporting software 
with a uniform standardized format for the creation of the required 
ASCII file. This format shows how each unique record must be displayed 
in the electronic file in terms of worksheet, line, and column 
position. The specifications required to complete a computerized 
Medicare Cost Report have been in effect since the inception of the 
Automated Desk Review (ADR) program in 1983. There are presently three 
vendors approved by HCFA for the ADR system. Eight other commercial 
vendors are approved by HCFA for electronic compilation of the Medicare 
cost report. A hospital may use any of the 11 vendors for purposes of 
filing an electronically prepared cost report. Each of the 11 vendors 
must undergo periodic testing in which it develops and submits to HCFA 
a completed cost report to demonstrate its system's ability to conform 
to HCFA's display standards. No hospital may file its cost report 
electronically unless the commercial software system it uses has 
completed the testing process and been approved by HCFA.
    In addition, when the provider files the cost report with the 
intermediary, the cost report must pass edits specified in the Provider 
Reimbursement Manual, Part II, before the intermediary can accept it. 
If the cost report fails to pass these edits the intermediary will 
immediately reject the cost report and return it to the provider for 
correction. The cost report will be considered late if the provider 
fails to correct it before the due date. The provider will be subject 
to withholding of interim payments until the intermediary receives the 
corrected cost report.
    Comment: Several commenters questioned the need to file a hard copy 
cost report in addition to submitting the electronic cost report. 
Additionally, commenters were concerned with the lack of a written 
statement certifying the accuracy of the electronic cost report. One 
commenter suggested that HCFA require providers to submit a written 
certification with the electronic cost report.
    Response: We agree with the commenters concerns regarding the need 
to file a hard copy cost report and the lack of a statement certifying 
the accuracy of the electronic file. Therefore, effective for cost 
reporting periods ending on or after October 1, 1994, we are 
eliminating the requirement that providers file a hard copy of the cost 
report in addition to the electronic file. In new 
Sec. 413.24(f)(4)(iii), we specify that instead of a hard copy cost 
report, providers must submit a hard copy of the certification 
statement, settlement summary, and a statement of certain worksheet 
totals found within the cost report file. We note that the 
certification statement provides that in signing the statement, the 
provider's administrator or chief financial officer is certifying the 
accuracy of the data contained in the electronic cost report or, if the 
provider has filed a manually prepared report, in the hard copy cost 
report.
    We believe that these changes will reduce the burden on providers 
and ensure the accuracy of the data contained in the electronic file. 
However, we also need to ensure that the electronic cost report is not 
altered once it leaves the provider. Thus, in conjunction with the 
changes made based on public comment, we are implementing a series of 
changes designed to preserve the integrity of the electronic cost 
report once the provider files it with the intermediary. First, we are 
specifying in new Sec. 413.24(f)(4)(ii) that the provider's software 
must be capable of disclosing that changes have been made to the cost 
report file after the provider has submitted it to the intermediary. 
Specifically, electronic cost reporting software will be modified so 
that the cost report will calculate a ``hash total'', that is, a number 
representing the sum of the worksheet totals (mentioned above) 
contained in the provider's as filed cost report. If any data in the 
electronic file is changed after the hash total is calculated, the 
electronic file will disclose that a change has been made. We will 
instruct all automated data reporting vendors to develop the capability 
to calculate hash totals and disclose changes for all their provider 
clients. Second, we are specifying in regulations that an intermediary 
may not alter a cost report once it has been filed by a hospital and 
must reject any cost report that does not pass all specified edits and 
return it to the provider for correction. Third, HCFA will make 
periodic checks to ensure that the totals in the electronic file agree 
with those totals certified by the provider's administrator or chief 
financial officer.
    Because providers may not have anticipated such substantial changes 
as a result of this rule, we are soliciting comments concerning the 
requirement in new Sec. 413.24(f)(4)(ii) that cost report software be 
able to disclose changes to the electronic file made after the provider 
has submitted it to the intermediary.
    Comment: One commenter requested that the intermediary be required 
to report back to the provider in electronic cost reporting format the 
audit adjustments made to the provider's cost report. This would allow 
providers to readily add the audit adjustments to the electronic cost 
report for future reference.
    Response: We recognize the merit of this suggestion and will 
consider implementing this process in the future. The intermediaries 
would need additional computer programming to be able to provide 
hospitals with an electronic file of audit adjustments. We will discuss 
the commenter's suggestion with the 11 approved vendors of cost report 
software to determine the extent of additional programming needed and 
the financial implications.

B. Waiver Process

    Comment: Several commenters requested guidance concerning the 
process for seeking a delay in or waiver from the electronic submission 
requirement. The commenters also wanted to know under what 
circumstances HCFA would grant a delay or waiver. Commenters suggested 
that HCFA define the term ``financial hardship'' as used in the 
proposed rule.
    Response: The Provider Reimbursement Manual, part II, section 130, 
provides the guidelines for requesting a waiver. Basically, the 
provider must make a written request to the intermediary at least 120 
days before the close of the provider's cost reporting period. The 
intermediary reviews the request and forwards it, with a recommendation 
for approval or denial, to HCFA's central office within 30 days of 
receipt of the request. The central office informs the intermediary 
whether the waiver is approved or denied within 60 days of receipt of 
the request in the central office.
    Because of the varying financial circumstances of hospitals and 
other health care providers that participate in the Medicare program, 
we believe that it would be inappropriate to establish a definition of 
``financial hardship'' or a set of specific criteria that a provider 
would need to meet to qualify for a waiver of the electronic cost 
reporting requirement. We believe that the best method for determining 
whether a provider qualifies for a waiver is to consider requests on a 
case by case basis.
    To date, we have received only eight requests for waiver. We 
believe that the small number of requests indicates that the majority 
of providers will not experience financial hardship as a result of 
electronic cost reporting. In addition, in an effort to minimize the 
number of providers that need a waiver, we developed a software package 
that will enable the hospital to file an electronic data set to its 
fiscal intermediary in order to generate an electronic cost report. We 
are providing the software package to hospitals free of charge. 
Therefore, we believe that with the availability of the free software, 
it will be difficult for a provider to demonstrate financial hardship.
    Comment: A commenter recommended that HCFA provide an automatic 
waiver of electronic cost report filing in each instance in which a 
waiver of standard or full cost reporting has been granted, including 
those cases where full cost reporting has been waived because of a low 
percentage of Medicare inpatients.
    Response: HCFA will grant an automatic waiver of electronic cost 
reporting if a provider is exempt from full or standard cost reporting. 
To qualify for an automatic waiver of electronic cost reporting, the 
provider must apply and qualify for an exemption from full or standard 
cost reporting in accordance with the rules that provide for the 
exemption. For example, a provider that does not furnish any covered 
services to Medicare beneficiaries is exempt from filing a full cost 
report and instead must submit an abbreviated report under 
Sec. 413.24(g). Additionally, a provider with low program utilization 
may obtain a waiver from filing a full cost report in accordance with 
Sec. 413.24(h). When the intermediary notifies a provider that it 
qualifies for an exemption from filing a full cost report, the provider 
also will be notified of the exemption from electronic filing. 
Providers must apply for a waiver of full cost reporting for each new 
cost reporting period. Providers that are not exempt from full cost 
reporting must file for a waiver according to the procedure set forth 
in section 130 of the Provider Reimbursement Manual, part II, as 
discussed above.

C. Sanctions

    Comment: Commenters requested HCFA's position regarding the 
penalties assessed against a provider for failing to file its cost 
report electronically.
    Response: Sections 1815(a) and 1833(e) of the Act provide that no 
payments will be made to a hospital unless it has furnished the 
information requested by the Secretary needed to determine the amount 
of payments due the hospital under the Medicare program. Section 
405.371(d) provides for suspension of Medicare payments to a hospital 
by the intermediary if the hospital fails to submit a cost report, 
submits an incomplete cost report, or fails to furnish other needed 
information. Section 2409.1(A)(1) of the Provider Reimbursement Manual 
(PRM 15-I) addresses the procedures an intermediary will follow when a 
provider fails to submit a cost report or when the cost report is 
overdue. Unless the provider has received a waiver from electronic cost 
reporting, the intermediary will consider a timely filed cost report 
that is not filed electronically as an overdue cost report for purposes 
of section 2409.1(A)(1). We will update this section of the manual to 
reflect our position regarding sanctions for failure to file cost 
reports electronically.

D. Cost of Implementation

    Comment: A commenter disagreed with our statement in the impact 
analysis of the proposed rule that hospitals would not be significantly 
affected by electronic cost reporting. The commenter stated that some 
hospitals had to make expensive changes in personnel or software to 
comply with the regulations and that the cost of maintaining the 
required software was an additional burden on providers. The commenter 
suggested that HCFA pay providers for the cost of implementing the 
electronic cost reporting requirement including the cost of equipment, 
software, additional personnel, external consultants, and any related 
overhead costs.
    Response: Section 1886(f)(1)(B) of the Act does not authorize HCFA 
to subsidize any of the costs hospitals incur in implementing 
electronic cost reporting. However, it does authorize the waiver or 
delay of the implementation of the electronic format in cases of 
financial hardship. As discussed above, if computer support required 
for electronic cost reporting will cause financial hardship, the 
hospital may request a waiver from electronic filing.

V. Provisions of the Final Regulations

    In this final rule with comment, we are revising the provisions set 
forth in the proposed rule. Based on public comment, we are eliminating 
the requirement that providers file a hard copy cost report in addition 
to the electronic file. Also based on public comment, we are adding a 
new paragraph (iii) to Sec. 413.24(f)(4) to provide that in addition to 
the electronic file, a hospital must submit hard copies of a settlement 
summary, a statement of certain worksheet totals found in the 
electronic file, and a signed statement certifying the accuracy of the 
electronic file or the manually prepared cost report.
    In addition to the changes made based on public comment, we are 
adding a new paragraph (ii) to Sec. 413.24(f)(4) to provide the 
following:
     All cost reporting software must be able to disclose that 
changes have been made to the electronic file after the provider has 
submitted its cost report to the intermediary.
     The intermediary may not alter the cost report once it has 
been filed by the provider.
     The intermediary rejects any cost report that does not 
pass all specified edits and returns it to the provider for correction.
    As a result of the above changes to the regulations text, proposed 
Sec. 413.24(f)(4)(ii) has been redesignated as Sec. 413.24(f)(4)(iv).

VI. Collection of Information Requirements

    Section 413.24 of this final rule with comment contains information 
collection and recordkeeping requirements that are subject to review by 
the Office of Management and Budget (OMB) under the Paperwork Reduction 
Act of 1980 (44 U.S.C. 3501 et seq.). These information collection and 
recordkeeping requirements are not effective until they have been 
approved by OMB. We have submitted a copy of this final rule with 
comment to OMB for review of the information collection requirements.
    Approximately 90 percent of hospitals participating in Medicare 
have filed electronic cost reports before the effective date of this 
regulation, that is with cost reporting periods beginning on or after 
October 1, 1989. These providers will now have to file a diskette 
containing the required cost report data in a standard format. This 
diskette will contain input data only. We believe that minimal time 
would be needed for hospitals to become familiar with the revised 
software furnished by their cost reporting vendor. The remaining 10 
percent of the hospitals previously filed manually prepared cost 
reports. While these hospitals will initially experience an additional 
reporting burden, we believe that once they are familiar with 
electronic reporting, there will no longer be an additional burden and 
there may even be a decrease in burden since the time needed to compute 
the cost report will no longer be required.

VII. Response to Comments

    Because of the number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
comments we receive by the date and time specified in the ``DATES'' 
section of this preamble, and, if we proceed with a final rule, we will 
respond to comments in the preamble to that document. Specifically, we 
are soliciting comments concerning the requirement in new 
Sec. 413.24(f)(4)(ii) that cost reporting software be able to detect 
changes made to the electronic file after the provider has submitted it 
to the intermediary. We will not consider comments concerning 
provisions that remain unchanged from the August 19, 1991 proposed rule 
or provisions that were changed based on public comment.

VIII. Impact Statement

    Unless the Secretary certifies that a final rule will not have a 
significant economic impact on a substantial number of small entities, 
we generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612). For purposes of the RFA, all hospitals and small 
businesses that distribute cost-report software to hospitals are 
considered to be small entities. Intermediaries are not included in the 
definition of a small entity.
    Section 1102(b) of the Act requires the Secretary to prepare a 
regulatory impact analysis if a final rule may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
603 of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that has fewer than 50 beds and is 
located outside of a Metropolitan Statistical Area.
    Under the provisions of Secs. 413.20(b) and 413.24(f), hospitals 
are required to submit cost reports annually, with reporting periods 
based on the hospital's accounting year. This is generally a 
consecutive 12-month period. Section 1886(f)(1)(B)(i) of the Act now 
requires the use of a standardized electronic cost reporting format for 
hospitals. There are approximately 11 national software suppliers that 
distribute cost report software packages to hospitals. In addition, 
HCFA offers a cost reporting software package that is available at no 
expense to any hospital that requests it.
    As discussed in the proposed rule, computer software suppliers and 
hospitals that purchased their software will not be significantly 
affected by these provisions. Suppliers will not need to develop new 
software and hospitals will not need to purchase new software but only 
revise the software or have the cost report portion of the software 
revised based on standard format requirements set by HCFA. Although the 
cost report portion of software packages will be exactly the same, 
competition among suppliers will not be adversely affected since each 
offers other features that make its product unique.
    Hospitals that will be most affected by this final rule with 
comment period are those that may be unable to afford the equipment to 
submit electronically. These hospitals might include hospitals that 
have very few Medicare beneficiaries and small rural hospitals. 
Hospitals that have access to computer equipment can utilize and 
benefit from HCFA's free software if they are unable to afford the 
software that is available from suppliers. However, as stated above, we 
have received only eight requests for waiver of electronic cost 
reporting. We believe that the small number of requests indicates that 
the vast majority of hospitals will not experience financial hardship 
due to the requirements of this final rule with comment period.
    In conclusion, this final rule with comment period will not have a 
significant effect on hospital costs since hospitals will not be 
required to collect any additional data beyond that which the 
regulations currently specify; cost-report software is available at no 
cost from HCFA to any hospital that requests it; and most hospitals 
have some type of computer equipment through which they are currently 
submitting electronically prepared cost reports. Hospitals will only be 
affected to the extent that all would be required to submit cost 
reports in a standardized electronic format to their respective 
intermediary. A hospital that does not comply with the provisions of 
this rule, as specified in the preamble, will be subject to sections 
1815(a) and 1833(e) of the Act, which provide that no payments will be 
made to a hospital unless it has furnished the information requested by 
the Secretary that is needed to determine the amount of payments due 
the hospital under Medicare.
    This final rule with comment period will not have a significant 
effect on a substantial number of Medicare participating hospitals or 
software suppliers. Therefore, a regulatory flexibility analysis is not 
required. We are not preparing a rural impact statement since the 
Secretary certifies that this final rule with comment period will not 
have a significant economic impact on the operation of a substantial 
number of small rural hospitals. In accordance with the provisions of 
Executive Order 12866, this regulation was not reviewed by the Office 
of Management and Budget.

List of Subjects CFR Part 413

    Health facilities, Kidney diseases, Medicare, Puerto Rico, 
Reporting and recordkeeping requirements.

    42 CFR part 413 is amended as set forth below:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES

    A. The authority citation for part 413 is revised to read as 
follows:

    Authority: Sec. 1102, 1814(b), 1815, 1833(a), (i), and (n), 
1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42 
U.S.C. 1302, 1395f(b), 1395g, 13951(a), (i), and (n), 1395x(v), 
1395hh, 1395rr, 1395tt, and 1395ww) and sec. 104(c) of Pub. L. 100-
360 as amended by sec. 608(d)(3) of Pub. L. 100-485 (42 U.S.C. 
1395ww (note)); and sec 101(c) of Pub. L. 101-234 (42 U.S.C. 1395ww 
(note)).

    B. A new paragraph (f)(4) is added to Sec. 413.24 to read as 
follows:


Sec. 413.24  Adequate cost data and cost finding.

* * * * *
    (f) Cost reports. * * *
    (4) Electronic submission of cost reports. (i) Effective for cost 
reporting periods beginning on or after October 1, 1989, a hospital is 
required to submit its cost reports in a standardized electronic 
format. The hospital's electronic program must be capable of producing 
the HCFA standardized output file in a form that can be read by 
intermediary's automated system. This electronic file, which must 
contain the input data required to complete the cost report and the 
data required to pass specified edits, is forwarded to the fiscal 
intermediary for processing through its system.
    (ii) The fiscal intermediary may not alter the cost report once it 
has been filed by the hospital. If a cost report does not pass all 
specified edits, the fiscal intermediary rejects the cost report and 
returns it to the hospital for correction. The hospital's electronic 
program must be able to disclose that changes have been made to the 
electronic cost report after the provider has submitted it to the 
intermediary.
    (iii) Effective for cost reporting periods ending on or after 
October 1, 1994, a hospital must submit a hard copy of a settlement 
summary, a statement of certain worksheet totals found within the 
electronic file, and a statement signed by its administrator or chief 
financial officer certifying the accuracy of the electronic file or the 
manually prepared cost report. The following statement must immediately 
precede the dated signature of the hospital's administrator or chief 
financial officer:

    I hereby certify that I have read the above certification 
statement and that I have examined the accompanying electronically 
filed or manually submitted cost report and the Balance Sheet 
Statement of Revenue and Expenses prepared by ________ (Provider 
Name(s) and Number(s)) for the cost reporting period beginning 
________ and ending ________ and that to the best of my knowledge 
and belief, this report and statement are true, correct, complete 
and prepared from the books and records of the provider in 
accordance with applicable instructions, except as noted. I further 
certify that I am familiar with the laws and regulations regarding 
the provision of health care services, and that the services 
identified in this cost report were provided in compliance with such 
laws and regulations.

    (iv) A hospital may request a delay or waiver of the electronic 
submission requirement in paragraph (f)(4)(i) of this section if this 
requirement would cause a financial hardship. The hospital must submit 
a written request for delay or waiver with necessary supporting 
documentation to its intermediary at least 120 days prior to the end of 
its cost reporting period. The intermediary reviews the request and 
forwards it with a recommendation for approval or denial, to HCFA 
central office within 30 days of receipt of the request. HCFA central 
office either approves or denies the request and notifies the 
intermediary within 60 days of receipt of the request.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: August 25, 1993.
Bruce C. Vladeck
Administrator, Health Care Financing Administration.

    Approved: May 6, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-12459 Filed 5-24-94; 8:45 am]
BILLING CODE 4120-01-P