Using Medicare cost reports to calculate costs for post-acute care claims

This paper describes technical approaches for calculating costs associated with Medicare post-acute care provider claims including long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), home health agencies (HHAs), and skilled nursing facilities (SNFs) using Medicare cost report data (Healthcare Cost Report Information System or HCRIS) and claims data. Costs of providing medical care, rather than payments for medical care, are often the focus of analyses of resource utilization. Calculated costs more accurately reflect the claim level costs to providers of providing care than the payments made to providers, which often include policy adjustments (such as disproportional share payments for inpatient hospitals) that are not directly related to the costs of providing care.