The Hospital Finance Academy welcomed Kristin L. DeGroat, Chief Legal Officer at Besler Holdings, Inc., for an in-depth live session (on July 22, 2026) titled “Medicare Cost Report Appeals & Reopenings: Best Practices.” The webinar delivered actionable guidance for hospital finance professionals navigating complex Medicare reimbursement disputes.
Why Appeals and Reopenings Matter
Medicare cost report appeals and reopenings are not one-time events—they represent ongoing processes that require standardized procedures, clear accountability, and meticulous documentation. Frequently appealed issues were briefly discussed, with a distinction made between appealed and reopened issues. In most cases, appealed issues are not appropriate for a reopening because they remain subject to ongoing legal challenges.
PRRB Filing Requirements
To establish jurisdiction at the Provider Reimbursement Review Board (PRRB), providers must meet three core criteria:
Dissatisfaction with a Medicare Administrative Contractor (MAC) or the Secretary’s final determination.
Amount in Controversy thresholds: ≥ $10,000 for individual appeals or ≥ $50,000 for group appeals.
Timeliness: Filing within 180 days of the final determination (or the MAC’s failure to issue a timely determination).
Cost Report Reopenings
Reopenings offer an alternative pathway but still operate under strict parameters:
May be requested by the provider or initiated by CMS/MAC.
Three-year limit from the Notice of Program Reimbursement (NPR), with no limit for fraud or similar fault.
Reopenings do not toll PRRB appeal deadlines.
Approval remains at the total discretion of the MAC.
Providers may strategically pursue both reopening and appeal options when appropriate.
Operational Best Practices
The session emphasized practical workflows to reduce risk and improve outcomes:
Deadline Management
Maintain a centralized calendar with all filing milestones.
Implement reminder systems well in advance.
Never wait until the final day to submit.
Documentation
Organize supporting materials using consistent naming conventions.
Ensure files are complete and easily understandable by teammates.
Filing Requirements
Verify all required forms.
Confirm submission methods and double-check completeness before filing.
Key Takeaways for Long-Term Success
Treat appeals and reopenings as recurring processes rather than isolated tasks.
Standardize internal procedures and assign clear ownership.
Understand when each option—appeal versus reopening—is the most appropriate strategy.
Maintain proactive communication with the PRRB, the MACs, and CMS.
Contact the expert team at Besler Holdings for more information or help with your organization’s Medicare Cost Report appeals and/or reopenings.
Access the Medicare Cost Report Appeals & Reopenings Webinar Series
The Structural Reset of Medicaid Supplemental Payments: What Section 71116 Means for Providers & States
Section 71116 of the 2025 “Working Families Tax Cut” law, combined with the Centers for Medicare & Medicaid Services (CMS) proposed rule, introduces one of the most significant changes to Medicaid payment policy in decades. The legislation and accompanying regulations fundamentally alter how supplemental payments flow to providers, shifting from commercial-rate benchmarks to Medicare-based caps and expanding oversight across both managed care and fee-for-service systems.
Statutory Requirements Under Section 71116
The core mandate requires CMS to cap Medicaid State Directed Payments (SDPs) at Medicare-based rates for:
Inpatient and outpatient hospital services.
Nursing facility services.
Services provided by practitioners at academic medical centers.
Caps are set at 100% of Medicare rates in expansion states and 110% in non-expansion states. Temporary grandfathering provisions protect certain existing arrangements until approximately 2028.
Key Expansions in the CMS Proposed Rule
CMS extends the statutory requirements in five critical areas:
Scope Expansion: Medicare-based caps now apply to all SDPs and, beginning around 2029, to targeted fee-for-service payments.
Benchmark Replacement: Historic use of Average Commercial Rate benchmarks is eliminated, creating direct rate compression.
Phase-Down Schedule: Protected payments face mandatory reductions of approximately 10 percentage points annually beginning January 1, 2028.
Compliance Requirements: New methodologies, uniform rate rules, and enhanced documentation standards increase administrative burden.
Policy Objective: The changes aim to reduce federal Medicaid spending while improving transparency and curbing perceived overuse of supplemental payments.
Estimated Revenue Impacts by Provider Type
Hospitals
Highest exposure due to historical SDP levels often reaching 150–250% of Medicare equivalents.
Expected reductions: 15–40% on Medicaid revenue and 5–15% overall.
Risks include pressure on safety-net services and academic medical centers.
Skilled Nursing Facilities
Significant vulnerability given thin operating margins and high Medicaid payer mix.
Expected reductions: 20–50% on Medicaid revenue and 8–20% overall.
Operational risks center on staffing ratios and rural access.
Physician Groups (Especially Academic Medical Centers)
Moderate impact concentrated among faculty practices and hospital-employed specialists.
Expected reductions: 10–40% on Medicaid revenue for academic groups.
Potential consequences include reduced specialty access and accelerated consolidation.
Implementation Timeline
2026–2027: Limited immediate financial effects due to grandfathering; states begin compliance planning.
2028–2032: Primary phase-down period with annual reductions.
2029+: Full expansion to all SDPs and fee-for-service payments.
Strategic Considerations
Providers should model multi-year revenue scenarios now, while states must redesign payment structures and actuarial assumptions. Managed care organizations will experience an overall reduction in payment margins and increased time and coordination to achieve the maximum payment.
This policy shift converts Medicaid supplemental financing from commercial-rate alignment to Medicare-anchored discipline, with lasting effects on provider margins and state financing flexibility.
Key Insights
State Mix (Biggest Driver)
TX, FL, CA, NY Exposure = High Risk
Medicaid Payer Mix
25-30% Medicaid = High Sensitivity
Reliance on Supplemental Payments
Systems using SDPs to:
Offset Low Base Rates → Most Vulnerable
Final Takeaways
This rule is not evenly distributed.
Biggest Losers:
Multi-state Systems with:
TX / FL / CA Exposure
High Medicaid Volume
Heavy SDP Reliance
Relative Winners:
Systems with:
Strong Commercial Mix
Integrated Financing
Contact the experienced team at Besler Holdings to help you quantify this loss so you can explain it to both the C-suite and/or Board and also be ready to know what amounts you would be eligible to appeal on.
*Please note that this is a Proposed Rule and is subject to change once the final rule comes out.
Medicare Cost Report Appeals & Reopenings: Commonly Appealed Issues – A Deep Dive Webinar Recap
Medicare providers continue to face complex reimbursement challenges when filing Medicare Cost Reports. Understanding which issues are most frequently disputed before the Provider Reimbursement Review Board (PRRB) is essential for protecting revenue and maintaining compliance.
On June 17, 2026, The Hospital Finance Academy hosted the second session in its appeals webinar series: “Commonly Appealed Issues: A Deep Dive.” The session was presented by Kristin L. DeGroat, Chief Legal Officer at Besler Holdings, Inc., along with Leslie Goldsmith, Member, and Page M. Smith, Associate, both from Bass, Berry & Sims, PLC.
This recap highlights the key issues discussed and the practical guidance provided for hospitals and health systems.
PRRB Appeals: Continuing the Conversation
The webinar opened with a refresher on PRRB jurisdiction. Providers must meet all jurisdictional requirements, including dissatisfaction with a final determination, timely filing within 180 days, and the required amount in controversy ($10,000 individual / $50,000 group). Medicare Cost Reports remain the foundation for identifying appealable issues, and protesting items correctly on the cost report is a substantive payment requirement.
Most Commonly Appealed PRRB Issues
The speakers identified the following issues as those most frequently appealed to the PRRB:
Operating and Capital Disproportionate Share Hospital (DSH) Payments
Wage Index
Base Rate Standardized Amount
Graduate Medical Education (GME) and Indirect Medical Education (IME)
Nursing and Allied Health Education (NAHE)
Quality Reporting Payment Reductions
Medicare Bad Debt
Sole Community Hospital (SCH) / Medicare Dependent Hospital (MDH) Status
Volume Decrease Adjustments
Each issue was examined in detail, with special attention given to recent regulatory changes and significant case law.
Operating & Capital DSH
Traditional operating DSH (now representing 25% of DSH payments) remains appealable, particularly regarding Medicaid eligible days, Part C days, 1115 waiver days, adolescent psychiatric days, and SSI data match issues. Capital DSH was affected by the Toledo Hospital v. Becerra decision, leading to a prospective rule change effective for discharges on or after October 1, 2023. Hospitals with pre-2024 discharges should continue to protest and appeal.
Wage Index
Appeals often arise from the annual wage index reconciliation process and methodology changes. The Citrus HMS. LLC v. Becerra decision clarified how rural floor calculations must include reclassified urban-to-rural hospitals.
GME / IME
These payments use different FTE counting rules (three years for DGME, one year for IME) and are subject to FTE caps established in 1996. Disputes frequently involve weighting factors and available bed counts.
Volume Decrease Adjustments
Recent success has been achieved following the D.C. Circuit’s Lake Region decision (September 2024), which required CMS to recalculate the adjustment to fully compensate hospitals for fixed costs. The PRRB is now issuing decisions consistent with this ruling.
Other topics covered included Medicare bad debt collection efforts, SCH/MDH status determinations, and quality reporting payment reductions (where appeals at the PRRB level have historically been challenging).
Key Takeaways
The webinar emphasized several practical points for providers:
Many issues require early identification and proper protesting on the Medicare Cost Report.
Recent case law and regulatory changes create new appeal opportunities, especially for Capital DSH and Volume Decrease Adjustments.
Documentation standards remain critical for issues such as Medicare bad debt and indigency determinations.
Strategic timing and issue selection can improve outcomes when pursuing PRRB appeals.
Final Thoughts
Disputed cost report issues can have significant financial implications. A clear understanding of the most commonly appealed topics, combined with timely action and strong documentation, helps providers protect Medicare reimbursement.
Contact the expert team at Besler Holdings for more information or help with your organization’s Medicare Cost Report appeal and/or reopening.
Related Webinars
Part 1: Medicare Cost Report Appeals & Reopenings: What You Need to Know – On-Demand Now Part 3: Medicare Cost Report Appeals & Reopenings: Best Practices – On-Demand Now
Medicare Cost Report Appeals & Reopenings: What You Need to Know – Webinar Recap
Medicare Cost Reports are more than a compliance requirement. They are a foundational part of a provider’s reimbursement strategy, influencing both current and future payments. When a cost report issue affects reimbursement, providers may need to consider whether the matter should be handled through a Provider Reimbursement Review Board (PRRB) appeal, a protested item, or a cost report reopening.
In our recent webinar, “Medicare Cost Report Appeals & Reopenings: What You Need to Know,” presented live on May 13, 2026, by Kristin DeGroat, Chief Legal Officer at Besler Holdings, Inc., we reviewed the key rules, filing requirements, and common issues providers should understand to protect reimbursement opportunities.
Why Cost Reports Matter
A Medicare Cost Report is a financial report that identifies the costs and charges related to healthcare treatment activities. These reports directly impact reimbursement today and can also influence future reimbursement calculations.
Because cost reports establish the record that later supports appeals and reopenings, providers should treat them as an important strategic document, not just a year-end filing.
What Is the PRRB?
The PRRB is established under federal statute and serves as the forum for certain Medicare reimbursement disputes. It’s a five-member panel appointed by the Secretary of Health and Human Services and includes provider representatives and at least one CPA.
Generally, the PRRB hears appeals from Medicare providers regarding final determinations.
What Can Be Appealed?
Healthcare providers may appeal several types of final determinations to the PRRB, including:
Notice of Program Reimbursement (NPR) or Revised NPR
Failure to issue a timely determination
Federal Register notices
Quality Reporting Program payment reduction determinations
Exception determinations
Other Medicare Administrative Contractor (MAC) or CMS determinations of total reimbursement
A key point from the webinar: the appeal must involve a true final determination, and the provider must be dissatisfied with that decision.
PRRB Jurisdiction Requirements
To be eligible for PRRB review, an appeal must generally meet three core requirements:
1. Dissatisfaction
The provider must be dissatisfied with the contractor’s or the Secretary’s final determination of program reimbursement.
2. Amount in Controversy
The amount in controversy must meet the statutory threshold:
$10,000 or more for an individual appeal.
$50,000 or more for a group appeal.
3. Timeliness
The appeal must be filed within 180 days of receiving the final determination or if the contractor fails to issue a timely determination, 180 days after the expiration of one (1) year from the date the provider filed their cost report.
Meeting these requirements is essential to securing PRRB jurisdiction.
Who Can Appeal to the PRRB?
Appeals are available to Medicare “providers” including:
Hospitals
Hospices
CAHs
CORFs
FQHCs
HHAs
RHCs
SNFs
Renal dialysis facilities
Other specified entities
The webinar emphasized that PRRB appeal rights are specific and not available to every type of healthcare professional or organization.
Filing Requirements for PRRB Appeals
All appeals must be filed electronically through OH CDMS.
Supporting documentation typically includes:
The determination being appealed.
A provider representative letter.
Amount in controversy calculation.
Issue statement.
Adjustments or protested amount documentation.
Providers may file individual or group appeals, depending on the issue and circumstances.
Commonly Appealed Issues
The webinar highlighted several frequently appealed topics, especially within Medicare cost reporting and reimbursement disputes:
Disproportionate Share Hospital (DSH) payments.
Medicaid eligible days
1115 waiver days
Part C days
SSI entitled days
Wage index.
Graduate Medical Education / Indirect Medical Education.
Base rate standardized amount and budget neutrality.
Nursing and allied health education programs.
Volume decrease adjustments.
Quality reporting.
These issues often have significant reimbursement implications, making careful review and timely action especially important.
Cost Report Protested Items
Another important concept covered in the webinar is the protested item.
Under Medicare cost reporting rules, providers must include an appropriate claim on the cost report in order to preserve the right to reimbursement. An appropriate claim may involve:
Claiming an item as an allowable cost, or
Self-disallowing by claiming it as a protested amount when the provider believes the MAC lacks authority or discretion to award reimbursement
This step is critical because failing to properly protest an item may affect appeal rights later.
Cost Report Reopenings
A reopening is another tool available to providers after a cost report has been finalized.
Under 42 CFR § 405.1885, MACs may reopen a provider’s Medicare Cost Report:
At the request of a provider.
By CMS direction.
Through MAC determination.
Reopening Time Limits
Generally, a reopening must occur within 3 years of the Notice of Final Determination (NPR).
There is no time limit in cases involving fraud or similar fault.
Important Distinction
A reopening does not toll the PRRB appeal filing deadline. In other words, requesting a reopening does not extend the time to file an appeal.
Providers may request a reopening and still pursue an appeal, but both processes should be managed carefully and strategically.
Key Takeaways from the Webinar
Make sure the right team members and outside personnel are involved in filing and maintaining appeals.
Ensure your organization understands the rules and knows which issues may be appealed to the PRRB.
Given the complexity of Medicare Cost Report disputes, organizations benefit from having a defined process for issue identification, documentation, and decision-making.
Final Thoughts
Cost report appeals and reopenings can play a meaningful role in protecting reimbursement, but only when healthcare providers understand the rules, deadlines, and procedural requirements. A proactive approach can help organizations preserve appeal rights, strengthen compliance, and improve reimbursement outcomes.
If your organization is evaluating a cost report issue, it’s important to assess early whether the matter belongs in a protested item, a PRRB appeal, or a reopening request.
Contact the expert team at Besler Holdings for more information or help with your organization’s Medicare Cost Report appeal and/or reopening.
Related Webinars
Medicare Cost Report Appeals & Reopenings: Commonly Appealed Issues – A Deep Dive (Part 2) – Watch On-Demand Now
Medicare Cost Report Appeals & Reopenings: Best Practices (Part 3) – Watch On-Demand Now
