Technical Practice Aid for Reporting on Medicaid and Medicare Cost Reports

Technical Practice Aid for Reporting on Medicaid and Medicare Cost Reports

By Michael Glynn

Last October the American Institute of CPAs (AICPA) issued TIS 9110.15, a technical practice aid (TPA) that provides guidance to auditors who have been engaged to report on Medicaid and Medicare cost reports. The practice aid can be found at www.aicpa.org/download/members/div/auditstd/reporting_on_medicaid.pdf.

In response to several questions recently raised by auditors, the AICPA’s Healthcare Expert Panel would like to remind members of the guidance contained in the TPA.

The guidance explains how an auditor may report when the Medicaid and Medicare cost report is included as supplemental (or accompanying) information to a healthcare organization’s audited financial statements. Auditors are reminded that they may only provide an “in relation to” opinion on that portion of supplemental information that has been subjected to the auditing procedures applied in the audit of the basic financial statements. The auditor should disclaim on any supplemental information included in the cost report that has not been subjected to the auditing procedures applied in the audit of the basic financial statements.

The AICPA’s Healthcare Expert Panel and staff are aware of certain situations in New York state where the New York State Department of Health (NYSDOH) has inquired of the auditor why they did not express assurance on the entire cost report, regardless of whether the cost report information was subjected to the auditing procedures applied in the audit of the basic financial statements. As a result, the expert panel and staff met with the New York State Society of Certified Public Accountants’ (NYSSCPA) Healthcare Committee in February to assist them in dealing with the issue of reporting on the cost reports required by NYSDOH. The NYSSCPA Healthcare Committee is planning on meeting with representatives from the NYSDOH to discuss the reporting required by generally accepted auditing standards and the guidance provided in the technical practice aid. The committee will continue to advise the AICPA membership on this issue.

Michael Glynn, CPA, is technical manager for AICPA Audit and Attest Standards and staff liaison for the Institute’s Healthcare Expert Panel.