CMS updated the SNF Medicare cost report to enhance transparency, track expenses, and capture more accurate and relevant data.
For the first time in 15 years, the Centers for Medicare & Medicaid Services (CMS)has made changes to the Skilled Nursing Facility (SNF) Medicare cost report.
This is a substantial overhaul of the current cost report to the new updated CMS 2540-24 form. Providers need to be aware of these changes in order to provide the most accurate data to CMS.
Reasons for CMS changes to Medicare cost report
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For full details on the important SNF Medicare changes, watch our comprehensive webinar designed for leadership at skilled nursing facilities.
CMS has introduced several changes aimed at enhancing transparency into Medicare and Medicaid Managed Care activity, as this information is currently not publicly available from the current cost report. These changes are designed to support the potential development of a SNF wage index and accurate rate-setting.
Additionally, the new measures will provide more relevant data for Medicare Trust Fund projections, improve the calculation of program margins, and increase insight into census, revenue, and expenses related to the Medicare Advantage and Medicaid Managed Care SNF population.
Overview of 2025 cost report changes
Effective for cost reporting periods ending on or after September 30, 2025, the CMS changes include:
- Expanded reporting of Medicare Advantage/HMO and Medicaid HMO data
- There will be separate reporting of room, board, and ancillary revenue for different payers
- Broader contract labor expense reporting beyond direct care and therapy services
- Enhanced reporting of Home Office direct care expenditures
- Separate reporting for Quality Assurance and Performance Improvement (QAPI), training, in-service education, patient transportation (Part A), IV therapy, and preventive vaccines
- Removal of worksheets with obsolete data
Details of worksheet revisions
Multiple seldom-used lines were removed from the S Series worksheets along with obsolete questions. The S-3 worksheet has been revised to collect Medicare and Medicaid HMO census and Home Office direct care data. Obsolete worksheets (S-5, S-6, S-7) have been eliminated.
New reporting requirements have been introduced for SNF-HMO and NF-HMO inpatient admissions and discharges. An adjustments column has been added to S-3 Part II, and new departments have been included in S-3 Part III.
One of the more significant changes to the form is in the A series worksheets. Most notably, the addition of a contract labor costs column is now required for all cost centers. Other changes include Other Long-Term Care now being reported as non-reimbursable. Also, a new line for preventive vaccines was added as a reimbursable cost center.
Other worksheets throughout the new form also were overhauled, including the C and D Series to reflect worksheet A series changes, a new worksheet C-6, and a combined D Part I and II worksheet. Worksheets D-1, Part II and G-1 were also eliminated to streamline the cost report to needed information. Other changes were made to G-2 and G-3 to remove obsolete lines.
How to be ready for SNF Medicare changes
Although allowable costs remain unchanged, providers will need to supply new data that was previously unreported.
Prepare your software to support updated financial and census tracking requirements by structuring your general ledger to track revenue by payer, contract labor by vendor or service, and payroll for QAPI, training, and transportation. Providers who do not already report these details should review and adjust their processes promptly.
How CLA can help you with Medicare updates
Our HCLS teams can help your organization prepare, whether you need to verify your systems have the capabilities for new reporting requirements, learn more about the changes, or look into other options of strategic, scalable cost report preparation and advisory.