Download NASHP’s Hospital Cost Calculator (Excel spreadsheet). 

All Medicare-certified hospitals are required to file an annual MCR, using the Centers for Medicare & Medicaid (CMS) 2552-10 format, comprised of a series of worksheets and schedules that describe a hospital’s characteristics, financial information, costs, and charges.

The MCR includes hospital utilization data, costs and charges by cost centers and payers, related party and home office costs, and hospital reimbursements. In addition, it includes Medicaid cost, charges, and supplemental payments as reported by the hospital.

To gain access to a hospital’s MCR, there are four possible options:

• States may require hospitals to submit their MCRs to a state agency. Each state is different, so an inquiry with the specific agency that oversees hospital reporting will confirm if the MCR is filed with the state and if public access to the report is permitted.
• Individual hospital MCRs may be requested from Medicare administrative contractors via the Freedom of Information Act (FOIA). For more information on this process, visit the CMS FOIA page.
• CMS maintains MCR data in the Healthcare Provider Cost Reporting Information System (HCRIS), which is the only government national database available for all types of hospitals (nonprofit, for-profit, and government). Downloading data in SAS dataset format is available from CMS.
• Private businesses have also developed databases to house the HCRIS data, format MCRs, and provide analytics. A subscription fee is required, and fees vary depending on access levels requested (e.g., a single hospital report or all hospital reports).

Why Use the Medicare Cost Report?

MCRs are required filings for Medicare-reimbursable facilities, such as hospitals, skilled nursing facilities, home health agencies, home offices, hospices, rural health clinics, federally qualified health centers, and comprehensive outpatient rehabilitation facilities. The facility must complete and file a cost report on a yearly basis, due five months after its fiscal year end. NASHP’s Hospital Cost Calculator (HCC) is designed for hospital reporting only, using CMS 2552-10 format.

The Medicare Payment Advisory Commission (MedPAC) is a non-partisan commission of 17 health care economists who annually examine and independently report to Congress on Medicare payment adequacy. The commission considers the relationship of Medicare payment to hospitals’ costs for both average and relatively efficient hospitals. The March 2021 MedPAC report noted Medicare 2019 reimbursements yielded an average -1% margin for efficient hospitals and -8.7% margin for all hospitals.  Not-for-profit hospitals averaged -10% margin, while for-profit hospitals averaged a positive 0.5% margin.

Critics of the MCR often argue that MCR reports disallow appropriate costs for the hospital. The rules rely on the basic definition of allowable costs set in federal code, 42 CFR 413.9(c)(3). Only operating costs related to hospital patient care are reimbursable under the program. Furthermore, if operating costs include amounts for luxury items or services – more expensive than those generally considered necessary for the provision of needed health services – such amounts are not allowed.

The MCR instructions summarize disallowed operating cost adjustments as follows:

• Those needed to adjust costs to reflect actual costs incurred
• Items that constitute recovery of expenses through sales, charges, fees, etc.
• Items needed to adjust costs in accordance with the Medicare principles of reimbursement
• Items that are provided for separately in the cost apportionment process

The largest disallowed cost may be physician costs, and the MCR places physician costs in one of three buckets:

• Non-reimbursable services: (Medicare Disallowed)Research is the most common component, as these services do not provide patient care and are usually reimbursed through other funding.
• Professional services to individual patients: (Medicare Disallowed) Professional service reimbursement is provided through other channels, such as resource-based relative value scale (RBRVS), Medicaid/Medicare fee schedules, and commercial network agreements, etc.
• Provider services that benefit hospital patients in general: (Medicare Allowed) General services may include emergency room, intensive care unit, and other areas of general care that are not reimbursed through another channel.

To address concerns of disallowed costs, the NASHP calculator considers the full spectrum of hospital costs. First, the calculator generates hospital breakeven points for commercial payments to cover commercial patient operating costs and any balance from government programs, charity care, care for the uninsured and bad debt. The calculator then includes more breakeven points to consider, which include Medicare disallowed costs and hospital non-operating income and expenses.

How to Fill Out the Hospital Cost Calculator

The calculator’s Excel workbook has seven tabs. Tabs 1 and 2 are reporting tabs only, not requiring specific entry in their cells. Tabs 3 through 7 include fields for data input and calculation. Cells requiring data entry are shaded green, with the MCR references to the right of the cell.

Reporting Tabs

Tab 1 State Government: The purpose of this tab is to present an overview of hospital financial performance, as reported in the MCR, for state government agencies and decision-makers to utilize as a resource.

• • Government Programs
    • Summary of Net Patient Revenue, Hospital Operating Costs, and Operating Profit (Loss) for Medicare, Medicaid, and Children’s Health Insurance Program (SCHIP) and Government Low Income Government Programs.
    • Supplemental Payments as reported by the hospital for payments received from CMS and State resources, including Medicaid Disproportionate Share Hospital payments, Federal Upper Limit payments, state specific supplemental payments, etc.
    • Revenue as a percentage of Hospital Operating Costs.
    • Payer Mix for government programs, shown as the percentage of Hospital Charges attributed to each payer.
    • Operating Profit Margin for each program, expressed as Operating Profit (Loss) divided by Net Patient Revenue for the payer.
  • Charity Care Program, Uninsured and Bad Debt
    • Summary of Net Patient Revenue, Hospital Operating Costs, and Operating Profit (Loss).
    • Revenue as a percentage of Hospital Operating Costs.
    • Payer Mix shown as the percentage of Hospital Charges attributed to each payer.
    • Operating Profit Margin for each program, expressed as Operating Profit (Loss) divided by Net Patient Revenue for the payer.
    • Net Charity Care includes Charity Care Restricted Grants and Government Appropriations in support of hospital operations.
  • Medicare Advantage and Commercial
    • Medicare Advantage includes Medicare Part C, a form of private health insurance that provides the same coverage as original Medicare and may include additional benefits.
    • Commercial includes commercial insurers, employer self-funded plans, federal employee health plans, Veterans Administration, self-pay, and TriCare, and other private insurance.
    • Medicare Advantage Net Patient Revenue is calculated at the same level as original Medicare. Medicare Advantage may pay a higher rate than Medicare, and the calculator allows for a modifier to be entered on the ‘Payer Mix Calculations’ tab.
    • Commercial Net Patient Revenue and Operating Costs are calculated as the balance of Net Patient Revenue and Operating Costs, less amounts applied to Government Programs, Charity Care, Uninsured and Bad Debt, and Medicare Advantage.
    • Revenue as a percentage of Hospital Operating Costs is presented.
    • Payer Mix shown as the percentage of Hospital Charges attributed to the payer.
    • Operating Profit Margin for each program, expressed as Operating Profit (Loss) divided by Net Patient Revenue for the payer.
  • Additional Financial Information. Additional information and selected metrics from the MCR hospital-reported financial statement are included.
    • Hospital Fund Balance represents accumulation of hospital profits and losses, net of related party cash, asset, or liability transfers.
    • Net Patient Services Revenue, less Operating Expenses, as recorded in the hospital accounting system.
    • Other Income & Expense represents Income and Expenses not related to hospital operations, such as investment income, donations and contributions, cafeteria operations, etc.
    • Net Income (Loss) is Net Patient Revenue, less Operating Expenses, plus Other Income and Expense. Represents earnings retained by the hospital.
    • Net Profit Margin represents the percentage of Net Patient Revenue retained by the hospital.
    • Hospital Operating Profit (Loss) represents Net Patient Revenue, less Hospital Operating Costs (excluding non-patient care costs).
    • Operating Profit Margin represents the percentage of Net Patient revenue earned on hospital operations only.
    • Net Charity Care Costs as a percentage Operating Expenses and as a percentage of Net Patient Revenue, providing a comparison based on actual Charity Care Costs.
    • Net Uninsured and Bad Debt Costs as a percentage of Operating Expenses and as a Percentage of Net Patient Revenue, providing a comparison based on Uninsured and Bad Debt unreimbursed Costs.
    • Cost-to-Charge Ratio (CCR) is calculated to show the percentage of Hospital Charges that are Hospital Operating Costs.
    • Charges as percentage of Hospital Operating Costs is the inverse of the Cost-to-Charge Ratio, representing mark-up on Hospital Operating Costs for calculating Hospital Charges.
    • Inpatient Occupancy is the percentage of available beds occupied for inpatient care during the reporting year.
    • Payer Mix Adjusted Profit or Loss. The net impact to a hospital’s financials from a payer, calculated as the Payer Mix times the payer specific Operating Profit Margin.  Calculations are presented for the major payer groups:  Medicare, Medicaid, SCHIP and Government Low Income Programs, Medicaid with SCHIP and Government Low Income Programs, Medicare Advantage, and Commercial.
  • Adjusted Patient Calculations
    • Adjusted Patient Counts are calculated to consider both inpatient and outpatient discharges.
    • Inpatient Discharges and Days are reported in the Medicare Cost Report.
    • Adjusted Patient counts are computed by multiplying inpatient volume by an Outpatient Factor:
      • Outpatient Factor = Total Hospital Charges divided by inpatient charges
    • Metrics are calculated for two different adjusted patient methods (Adjusted Patient Discharges and Adjusted Patient Days) allowing the user to choose their preferred method for analyzing hospital inpatient and outpatient services.
    • Adjusted Patient Metrics allow the user to analyze trends and comparisons with other hospitals for Net Patient Revenue, Hospital Operating Costs, Operating Profit (Loss), Hospital Net Income and Direct Patient Care Labor.
  • Commercial Net Patient Revenue for Hospital Breakeven. Breakeven is the point where hospital revenues cover hospital expenses, with no profit.  Three scenarios are presented to show hospital breakeven points. Allowance for hospital profit margin is in addition to the amounts calculated for breakeven. The references below mirror the calculator’s reporting data.

• • • Level 1 calculates Commercial Net Patient Revenue required to cover Commercial Hospital Operating Costs and Government program, Charity Care, Uninsured and Bad Debt Operating Profit (Loss). Required Revenue is reported as total dollar amount; percentage of Commercial Hospital Operating Costs; and conversion to a multiple of Medicare rate.
    • Level 2 calculates Commercial Net Patient Revenue required to cover Level 1, plus Medicare Disallowed Costs and Medicare Advantage Operating Profit (Loss). Medicare Disallowed Costs do not include physician direct professional services to individual patients or physician private offices as those costs are reimbursements through other channels (RBRVS, fee schedules, etc.).  Required Revenue is reported as total dollar amount; percentage of Commercial Hospital Operating Costs; and conversion to a multiple of Medicare rate.
    • Level 3 calculates Commercial Net Patient Revenue required to cover Levels 1 and 2, plus hospital Other Income and Expense. Required Revenue is reported as total dollar amount; percentage of Commercial Hospital Operating Costs; and conversion to a multiple of Medicare rate.
    • Supplemental Information. As noted for Level 2, physician direct professional services and physician private office costs are not included in the breakeven calculation, as these costs are reimbursed through other payment channels.  As additional information, the supplemental calculation includes these costs to calculate a breakeven with their inclusion and reported hospital net patient revenue.

Tab 2 Health Plan: The purpose of this tab is to serve as a resource for employer health plans to understand hospital inpatient and outpatient breakeven points to utilize in managing plan costs or negotiating with third-party administrators (TPAs), insurance carriers or directly with hospitals. The MCR provides the inpatient and outpatient split for Medicare patient utilization only. This Medicare split was applied to Medicaid, SCHIP and Government Low Income Programs, Charity Care, Uninsured and Bad Debt and Medicare Advantage patient care. The inpatient and outpatient split for Commercial is calculated using the remaining inpatient and outpatient charges and operating costs.

• • • Government Programs, Charity Care, Uninsured and Bad Debt, and Medicare Advantage: A summary of Net Patient Revenue, Hospital Operating Costs, Operating Profit (Loss), Revenue as percentage of Hospital Costs, Payer Mix and Operating Profit Margin is shown for each payer, allocated to inpatient and outpatient categories.
    • Inpatient Breakeven: Required Inpatient Revenue is reported as total dollar amount; percentage of Commercial Hospital Operating Costs; and conversion to a multiple of Medicare rate for Breakeven Level 3.
    • Outpatient Breakeven: Required Outpatient Revenue is reported as total dollar amount; percentage of Commercial Hospital Operating Costs; and conversion to a multiple of Medicare rate for Breakeven Level 3.
    • Blended Inpatient and Outpatient: Analysis for weighted inpatient and outpatient. The calculator’s Health Plan tab, Cell B43 will tie to State Government tab, Cell B87.

Tab 3 Medicare Data Entry 

To alleviate confusion between the MCR and the calculator’s fields, the references will note MCR for the Medicare Cost Report and will note the HCC for NASHP’s Hospital Cost Calculator. HCC cells requiring data entry are shaded in green, with the MCR reference to the right, identifying the specific MCR worksheet location for the data. For example, “Net Assets” entry is found on Worksheet G-1, sum of columns 2, 4, 6, and 8 entries on Line 19.

2.)  Net Assets, Revenue, and Net Income
Financial Statement Items		Source (Medicare Cost Report)
Reserves	$50,000	Worksheet G-1, Columns 2, 4, 6, 8, Line 19

Data is entered exactly as found in the MCR field. If the number includes a minus sign, then the minus sign is included in the workbook data entry. The formulas handle the calculations.

• • Hospital Identification:
    • HCC, Column B, Row 5 identifies the hospital’s name.
    • HCC, Column B, Row 6 identifies the CMS Certification Number (CCN). The hospital will have a six-digit numeric identification number.
    • HCC, Column B, Rows 7 through 15 capture additional hospital information for reporting and calculation purposes.
  • Net Assets, Revenue, Net Income, Costs and Charges:
    • HCC, Column B, Rows 19 through 29 require data entry from MCR G-Worksheets, which include the hospital’s financial statements.
    • HCC, Column B, Rows 28 and 29 require data entry from MCR C, Part I Worksheet, reporting Hospital Costs and Hospital Charges for the hospital facility. Cost-to-Charge ratio (CCR) is calculated as Hospital Operating Costs divided by Hospital Charges.
  • Medicare:
    • HCC, Column B, Rows 33 through 91 capture data entry for Medicare Inpatient Revenue and Costs.
    • HCC, Column E, Rows 33 through 68 capture data entry for Medicare Outpatient Revenue and Costs.
    • HCC, Column E, Rows 81 through 87 capture data entry for Medicare Hospital Based Rural Health Center (RHC) and Federally Qualified Health Center (FQHC) Revenue and Costs.
    • Inpatient and Outpatient payments are provided on MCR E-Worksheets. Hospitals are classified by CMS depending on the payment method(s) utilized.  The most common classifications are:
      • PPS = Prospective Payment System
      • IPPS = Inpatient Prospective Payment System
      • CAH = Critical Access Hospital
      • MDH = Medicare Dependent, Small Rural Hospital
      • SCH = Sole Community Hospital
    • A hospital may change from one classification to another during a reporting period. If so, the hospital reimbursements will be reported in more than one column (Column 1.0, 1.01, 1.02, etc.). When entering data, sum all the columns for the specified line number.
    • There is one exception to summing the columns – MCR Worksheet E-2, where Column 1 is used for Part A Inpatient and Column 2 is used for Part B Outpatient. The worksheet requires entry under separate sections for Inpatient and Outpatient.

    

    • Medicare sequestration is a penalty created during The Budget Control Act of 2011, reducing reimbursements by 2 percent. Congress suspended the Medicare sequestration for April, 2020 through December 2021, to provide hospitals some financial relief during the COVID-19 pandemic.

    Tab 4 Medicaid and Other Data Entry:

    MCR Worksheet S-10 includes all data points to complete Tab 4. The hospital is required to complete this worksheet, including CMS supplemental payments, donations for charity care, accurate calculation of uncompensated care at cost (not charges), and reporting for uninsured and bad debts.

    • Medicaid:
      • Data entry for Medicaid Hospital Charges, Net Patient Revenue, and Hospital Operating Costs.
      • Operating Profit (Loss) is calculated.
      • Medicaid DSH and Supplement Payments are funded by CMS and states. The number is self-reported by the hospital. In some states, it is possible to verify the number by contacting the specific state agency that oversees the Medicaid program.
    • Children’s Health Insurance and Government Low Income Programs:
      • Data entry for SCHIP and Government Low Income Program Hospital Charges, Net Patient Revenue, and Hospital Operating Costs.
      • Combined program Hospital Charges, Total Net Patient Revenue, Total Operating Costs, and Operating Profit (Loss) are calculated.
    • Charity Care:
      • Data entry for Charity Care Hospital Charges, Net Patient Revenue, Hospital Operating Costs, and Restricted Grants.
      • Operating Profit (Loss) is calculated for 1) Charity Care and 2) Charity Care net of Charity Care Restricted Grants and Government Appropriations in support of hospital operations.
    • Uninsured and Bad Debt:
      • MCR includes information related to the Hospital Operating Costs for Uninsured and Bad Debt patients. Hospital Charges are calculated by dividing the Operating Costs by the Cost-to-Charge Ratio.

    Tab 5 Payer Mix Calculations:

    The purpose of this HCC worksheet is to perform the calculations needed for the Reporting tabs.

    • Hospital Charges:
      • Data Entry for Hospital Charges, for both Medicare and the total hospital are entered in Cells B4 through B24.
    • Medicare:
      • Calculation of Payer Mix as the percentage of Hospital Charges attributed to Medicare charges entered in Cells B4 through B14 and Cells B17 through B23.
      • Calculation of Hospital Operating Costs and Medicare Net Patient Revenue as recorded on ‘Medicare Data Entry’ tab.
      • Calculation of allocation percentages for Hospital Charges, Hospital Operating Costs and Net Patient Revenue between Inpatient and Outpatient. The MCR does not include the Inpatient and Outpatient split for other payers, so HCC applies the Medicare allocations to these payers.
    • Medicaid:
      • Calculation of Payer Mix as the percentage of Hospital Charges attributed to Medicaid charges entered in ‘Medicaid & Other Data Entry’ tab.
      • Medicaid Hospital Operating Costs, Net Patient Revenue, and DSH and Supplemental Payments calculated from entries on ‘Medicaid and Other Data Entry’ tab; Allocation of inpatient and outpatient based on Medicare allocation.
    • SCHIP and Government Low Income Programs:
      • Calculation of Payer Mix as the percentage of Hospital Charges attributed to SCHIP and Government Low Income Programs entered in ‘Medicaid & Other Data Entry’ tab.
      • SCHIP and Government Low Income Programs Hospital Operating Costs and Net Patient Revenue calculated from entries on ‘Medicaid and Other Data Entry’ tab; Allocation of inpatient and outpatient using Medicare allocations.
    • Charity Care:
      • Calculation of Payer Mix as the percentage of Hospital Charges attributed to Charity Care entered in ‘Medicaid & Other Data Entry’ tab.
      • Charity Care Hospital Operating Costs, Net Patient Revenue, and Charity Care Grants calculated from entries on ‘Medicaid and Other Data Entry’ tab; Allocation of inpatient and outpatient using Medicare allocations. 
    • Uninsured and Bad Debt:
      • Calculation of Payer Mix as the percentage of Hospital Charges attributed to Uninsured and Bad Debt calculated on ‘Medicaid & Other Data Entry’ tab.
      • Uninsured and Bad Debt Hospital Operating Costs Operating Costs calculated from entries on ‘Medicaid and Other Data Entry’ tab; Allocation of inpatient and outpatient using Medicare allocations.
      • Uninsured and Bad Debt category will not have Net Patient Revenue, as the reporting includes Hospital Operating Costs not covered by associated revenues.
    • Medicare Advantage:
      • Medicare Advantage Inpatient Hospital Charges calculated using Medicare HMO Patient Days reported on Worksheet S-3 and captured in the HCC on ‘Medicare Data Entry’ Tab, Cell B9. Outpatient charges are calculated by first calculating the ratio of outpatient Medicare charges to inpatient Medicare charges, and then applying this ratio  to the calculated Medicare Advantage inpatient charges.
      • Hospital Operating Costs are calculated by applying the Cost-to-Charge Ratio to Medicare Advantage charges.
      • Medicare Advantage Net Patient Revenue is calculated based on the hospital’s Medicare rates. The HCC can accommodate a payment modifier, adjusting the Medicare rate by entering a modifier in ‘Payer Mix Calculations’ Cell D76.  For example, if Medicare Advantage rates are 5 percent above Medicare Rates, enter 5 in Cell D76.  The HCC will calculate Medicare Advantage Net Patient Revenue at 5 points above the inpatient and outpatient Medicare rates. MedPAC March 2022 Report to the Congress noted 2020 Medicare Advantage payments were 4% higher than Medicare rates.
    • Commercial: Commercial includes all payers not captured above, such as commercial insurers, employer self-funded plans, Federal Employee Health Plans, Veterans Administration, Self-Pay, TriCare, etc.
      • Commercial Hospital Charges and Hospital Operating Costs are the remaining balance after subtracting Medicare, Medicaid, SCHIP and Government Low Income Programs, Charity Care, Uninsured and Bad Debt, and Medicare Advantage amounts.
      • Commercial Net Patient Revenue is the total Net Patient Revenues reported on Worksheet G-3, less Net Patient Revenue attributed to Medicare, Medicaid, SCHIP and Government Low Income Programs, Charity Care, Uninsured and Bad Debt, and Medicare Advantage payers.
    • Breakeven Calculations
      • The four Breakeven Levels are presented.

    Tab 6: Additional Data: The purpose of Additional Data tab is to capture MCR information required for breakeven calculations and reconciliations.

    • Data Entry: Data is entered in Column B, Rows 5 through 28 from various Worksheets.
    • Reconciliations:
      • Check Figures and Reconciliations are included to ensure the worksheets balance.  All yellow highlighted cells should show zero.

    Tab 7:  Labor:  The purpose of the Labor Tab is to calculate labor metrics related four categories:  Direct Patient Care; Overhead; Administrative, Management & General; and Home Office & Related Organizations.  Calculated totals for Hospital staff labor include wages, PTO, benefits, etc.  Contracted labor is reported for three of the categories:  Direct Patient Care; Overhead; and Administrative, Management & General.

    Worksheet S-3, Parts II and III are the sources for the entries.

    Calculations include Cost, Hours, Hourly Rates and Full Time Equivalent (FTE counts) for each category.

    Formulas are included to calculate Labor Cost Mix and allocations for percentages of Operating Expenses, Hospital Operating Costs, and Net Patient Revenue for each category.

    Direct Patient Care Labor calculations also include Direct Patient Care FTE per 1,000 Adjusted Discharges, Direct Patient Care Costs per Adjusted Discharge, and Direct Patient Care Contracted Labor as a percentage of the total Direct Patient Labor Cost.

    Definitions

    Adjusted Patient Counts	General measure of combined inpatient and outpatient volume, computed by multiplying inpatient volume by the outpatient factor.  Outpatient Factor = inpatient charges divided by outpatient charges.
    Breakeven	The financial point where hospital revenues = hospital expenses, with $0 profit. Breakeven points are commonly used by other industries and businesses when setting prices, determining an appropriate mark-up over breakeven point for profit.
    CCN #	CMS Certification Number, issued by the Centers for Medicare and Medicaid service providers.
    Charges as % of Costs	Inverse of Cost-to-Charge Ratio, representing mark-up on Hospital Operating Costs for calculating Hospital Charges.
    Charity Care	Hospital services provided to patients qualifying for care under the provisions of the Hospital’s Charity Care Program.  Patient payments made under the Hospital’s Program are recorded as Payments; Third party donations are classified as Restricted Grants.
    CMS	Centers for Medicare & Medicaid Services
    Commercial	Private payers, includes commercial insurers, employer self-funded plans, federal employee health plans, Veterans Administration, self-pay, TriCare, etc.
    Cost-to-Charge Ratio (CCR)	Hospital Operating Costs divided by Hospital Charges. Result indicates the percentage of charges that are costs.
    COVID-19 Funding	CMS required hospitals to report Public Health Emergency (PHE) funds received, including Provider Relief Funds, State Funding, FEMA funding, etc. related to the pandemic.
    Direct Patient Care Labor	Wages and benefits paid to hospital staff or contracted rates paid to third parties for providing direct patient care services.  Excludes patient care services billed through other methods and personnel not providing direct patient care services, such as administration, maintenance, housekeeping, records management, and other general services.
    Fund Balance	Accumulated hospital profits and losses, plus or minus asset transfers between the hospital and home office or affiliates.
    Home Office and Related Organization Labor	Wages and benefits paid to personnel affiliated with a home office or related organization who provided services to the hospital.
    Hospital Charges	Total inpatient and outpatient charges for services provided by the hospital.  Charges are set by the hospital , and similar to Manufacturer Suggested Retail Price (MSRP) in other markets.
    Hospital Operating Costs	Total costs for patient services and hospital operations for a specific reporting period. May also be called Medicare Allowed Costs.
    Hospital Operating Profit (Loss)	Net Patient Revenue, less Hospital Operating Costs.
    Inpatient (I/P)	Procedures requiring patient to be admitted to hospital. Medicare Part A payments and benefits pertain to inpatient care.
    Mark-up on Costs for Charges	Inverse of Cost-to-Charge Ratio, representing mark-up on Hospital Operating Costs for calculating Hospital Charges.
    Medicare Advantage	Medicare Part C plan, a form of private health insurance that provides the same coverage as original Medicare and may include additional benefits.
    Medicare Allowed Costs	Hospital operating expenses eligible for reimbursement per Medicare federal regulations.
    Medicare Cost Report (MCR)	Medicare cost report. Hospitals participating in the Medicare program must file annual cost reports. (42 U.S.C. § 1395g; 42 C.F.R. § 413.20(b).  Since May 1, 2010, CMS reporting format 2552-10 is utilized for the cost report submission.
    Medicare Disallowed Costs	Hospital operating expenses not eligible for reimbursement per Medicare federal regulations.
    Multiple of Medicare	Payment is shown as a multiple of the associated Medicare rate.
    Net Income (Loss)	Net Patient Revenue, less Operating Expenses, plus Other Income and Expense.  Represents the portion of Net Patient Revenue retained by the hospital
    Net Patient Revenue	Gross patient charges, less contractual discounts, bad debt and charity care allowances, and other deductions agreed to by the hospital.  Numbers reported from hospital’s accounting records.
    Net Profit Margin	Net Income or Loss divided by Net Patient Revenue, representing the percentage of Net Patient Revenue retained by the hospital.
    Operating Expenses	Hospital Operating Expenses, as recorded in hospital accounting system.  Includes Hospital Operating Costs and Disallowed Medicare Costs.
    Other Income and Expense	Income and Expenses not related to hospital operations, such as investment income, donations and contributions, cafeteria operations, etc.
    Outpatient (O/P)	Procedures that do not require hospital admission and may also be performed outside the premises of a hospital. Medicare Part B payments and benefits pertain to outpatient care.
    Overhead Labor	Wages and benefits paid to hospital staff and contracted rates paid to third parties for services supporting hospital operations, but not directly related to patient care.
    Payer Mix	Hospital services consumed by different payers, with 100 percent representing total hospital services. Hospital Charges reported or calculated for payer types are used for calculating payer mix.
    Payer Mix Adjusted Profit (Loss)	Profit or loss by payer type is weighted by payer mix to determine impact on overall hospital financial operations.  For example, if a hospital reports a loss of 67% on Medicaid business, the net impact to the hospital is dependent upon the volume of patients.  If the Medicaid payer mix is only 9%, the net impact is negative 6%, but if the Medicaid payer mix is 40%, the net impact is 26%.
    Revenue as % of Hospital Operating Costs	Specific payer or procedure Revenue divided by related Hospital Operating Costs to determine percentage of costs covered by Revenue.
    Uninsured and Bad Debt	Costs for insured and uninsured patients determined to be uncollectible. Does not include discounts given to Commercial, nor difference between charges and fee schedule or negotiated amounts for Government Programs.  Medicare program pays the hospital 70 percent of allowable Medicare patient bad debt, so these hospital costs are not included as Uninsured and Bad Debt, as the 70 percent has been paid.