2540-10 SNF Transmittals
The Medicare Cost Report changes frequently. Health Financial Systems keeps users informed in several different ways; e-mails, live web-ex sessions, news blogs, user meetings and our website. This page gives information about the details of such transmittals.


2540-10 Approval Letter
2540-10 T-7 from CMS Website

SNF Transmittal 7

The Skilled Nursing Facility, 2540-10 was updated to Transmittal 7 by CMS, on August 19, 2016. Transmittal 7 is effective for cost reporting periods beginning on or after October 1, 2015.

The primary purpose of the Transmittal was to incorporate Statutory reporting requirements to facilitate hospice payment reforms pursuant to Section 3132 of the Patient Protection and Affordable Care Act (ACA). In addition, this Transmittal requires SNF facilities with FQHC units to file a separate Form 224-14 cost report for cost reporting periods beginning on or after October 1, 2014. HFS was approved for Transmittal 7 on October 21, 2016.



SNF Transmittal 6

CMS published the SNF, 2540-10 Transmittal 6, on September 19, 2014. Transmittal 6 is effective for cost reporting periods ending on or after September 30, 2014. HFS was approved on October 16, 2014 and the software was distributed to all SNF users on November 3, 2014. Form CMS-2540-10 Transmittal 6 contained minor clarifications previously included in the HFS software.



SNF Transmittal 5

The SNF, 2540-10 system was updated to Transmittal 5 by CMS, in May 2013. Transmittal 5 is effective for FY overlapping 4/1/2013, for the Sequestration reduction (i.e. all FYE on or after 4/1/2013 MUST use Transmittal 5). In addition Transmittal 5 includes bad debt changes effective for FY Begin on or after 10/1/2012.

  • HFS was approved for Transmittal 5 on July 31, 2013.
  • Transmittal 5 changes included:
    • CMS revised Worksheet S-2, Part I, line 43 to only identify providers with Home Office cost allocations. If line 43 is answered as “Y”, line 44 and 45-47 must also be completed. If a provider has related organization costs but no home office, Worksheet S-2, Part I, line 18 will be answered “Y”, but line 43 would be “N”.
    • CMS clarified that Worksheet D-1, Part II, is not applicable to Titles V or XIX.
    • CMS modified various settlement worksheets to introduce the 2% Sequestration reduction for services on or after 4/1/2013.
      • This change is to implement section 251A of the Balanced Budget and Emergency Deficit Control Act
    • Sequestration will be computed as days on or after 4/1/2013 divided by total days in the FY, times 2%. Thus, a 6/30/2013 FYE would have about a half percent reduction. Worksheets impacted include, Worksheet E, Part I (lines 14.99 and 28.99), Worksheet H-4 (line30.99), Worksheet I-3 (line 25.01) and Worksheet J-3 (line 17.01)
    • §3101 of the Middle Class Tax Relief and Job Creation Act of 2012, reduced payments for bad debts as follows:
      • Non-dual eligible - From 70% allowable to 65% allowable for cost reporting periods beginning during Federal fiscal year 2013 and subsequent fiscal years.
      • SNF dual Eligible - for cost reporting periods beginning during FFY 2013, 88%, for cost reporting periods beginning during FFY 2014, 76%, for cost reporting periods beginning during FFY 2015 and Subsequent, 65%.
      • CMHC, RHC and ESRD - for cost reporting periods beginning during FFY 2013, 88%, for cost reporting periods beginning during FFY 2014, 76%, for cost reporting periods beginning during FFY 2015 and Subsequent, 65%.
    • Worksheets impacted include, Worksheet E, Part I (lines 8 and 24.02), Worksheet I-3 (line 22.01) and Worksheet J-3 (line 13.01)
    • CMS added level one edit 1046S to ensure that if line 43 is answered as “Y”, line 44 and 45-47 must also be completed. Edit 1045S was eliminated to no longer requires that line 18 is answered “N”.
  • HFS’s current version for the SNF is 5.1.146.0, posted 8/6/2013.