Fiscal Year End (FYE) Changes

In accordance with CMS Provider Reimbursement Manual (PRM) 15-1, Chapter 24, Section 2414.3, a provider must adhere to the cost reporting period initially selected unless a change has been authorized in writing by its intermediary. For the change to be effective, the provider's written request must be received by the intermediary, the Medicare Administrative Contractor (MAC), 120 days or more before the close of the reporting period which the change proposes to establish.

In order for a change to be approved, the MAC must be able to establish good cause for the change. According to the CMS in the Provider Reimbursement Manual (PRM) 15-1, Chapter 24, Section 2414.3,

"Good cause is synonymous with a good reason or justifiable purpose in seeking a change in the cost reporting period. Good cause requires that the reason for changing the cost reporting period be clearly consistent with the purposes and intent of the program. To establish good cause, a provider must show that there were specific circumstances which support and explain the basis for requesting a change in the cost reporting period. Good cause would be established, for example, when a chain has all its providers on the same fiscal year and wishes to change the cost reporting period of a newly acquired facility to the same year end. Good cause, however, would not be found to exist where a chain has been operating for some time with providers with varying year ends and requests a change to spread out the accounting work in a different manner. Good cause would not be found to exist where the purpose of the change is to maximize reimbursement. Good cause does not exist where the effect of the change is to delay or expedite the date by which a hospital becomes subject to the prospective payment system (PPS).

Providers owned and/or operated by governmental entities using fiscal year ending dates established by local law, may require changes in the reporting year ending dates as a result of legislative action. In such situations, a provider with the approval of its intermediary may revise its cost reporting period to conform to the new fiscal year established by the applicable lawmaking body."

If your FYE change request is approved, you will receive notice from the MAC and you may file a cost report for a period of not less than 1-month and not more than 13-months.

For questions related to FYE changes, please contact the audit manager as listed on the Contact Noridian Management webpage.

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Last Updated Jun 05 , 2024