How to Use CMS Cost Report Data for Benchmarking? 

Use CMS Cost Report data to benchmark facility performance by analyzing expenses, staffing, and operational metrics, comparing them against industry standards to identify cost-saving opportunities and efficiency improvements.

1.Gather And Organize Your Data On The Cost Report

Begin by ensuring that your Medicare Cost Report is thoroughly and accurately prepared before sending it out for review. This involves taking the proper steps to ensure that all the appropriate data, such as total costs, wage indices, patient mix, and staffing levels, are correctly classified and structured in the proper format.

2.Acquire And Use Peer Data

Publicly available CMS Cost Report databases, such as the Healthcare Cost Report Information System (HCRIS), enable users to download large datasets derived from Skilled Nursing Facilities (SNFs) across the United States. Since these files contain thousands of individual records, it is recommended to impose some filters so that the data will become more straightforward to analyze.

• Geographic location (state or county)

• Facility size (number of beds)

• Ownership category (for-profit or non-profit)

• Urban vs. rural environment

This allows you to compare your skilled nursing facility to others of its kind, not merely on national averages for comparison.

3.Determine Key Performance Indicators (KPIs)

Focus your energies on a limited set of metrics that are highly pertinent and directly impact the overall performance of your operations. To explain this more clearly, refer to the following example:

• Cost per Medicare Day: Are you consuming more than your peers do at present to serve residents covered under the Medicare Cost Report program efficiently?

• Direct Patient Care Expenses: What percentage of your total budget goes to the care of the residents, as opposed to the money that goes towards administrative activities and operations?

• Therapy Revenue per Resident Day: How do your therapy services generate revenue relative to your similarly sized competitors?

• Staffing Ratios: Are your RN and CNA hours per patient day in line with high-performing facilities?

4.Conduct a Thorough Analysis of Trends Over Time

Cost reporting information can show year-to-year trends both in your building and against your competition within the industry. Are labor fees increasing across the board for all buildings? And are your specific building's administrative fees rising at a higher rate than others?

This assists you in catching issues early and planning.

5.Make Data-Driven Decisions

Benchmarking is not a game of show or a surface-level project—it needs to be used to stimulate motivation and inform effective action. For example, if you see that your direct care expenditure is 20% below what is usually the industry norm that could be an indication that you ought to be investing more in staffing resources. If your revenue from therapy services is astronomically high, but the cost of delivering that therapy is equally high, it's time to consider increasing cost-effectiveness efforts in that category.

Read More: How to Master Cost Report Submission in Healthcare