265-11 ESRD 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.


265-11 Approval Letter
265-11 T-4 from CMS Website

ESRD Transmittal 4

The ESRD, 265-11 system was updated to Transmittal 4 by CMS, on February 16, 2018. Transmittal 4 is effective for cost reporting periods ending on or after December 31, 2017. HFS was approved for Transmittal 4 on April 6, 2018 and the software will be released April 13, 2018. The primary change in Transmittal 4 was the incorporation of a Worksheet S, check box to the certification and settlement summary statement for electronic signature submission to the ESRD cost reporting forms. This provision is available as an option for cost reporting periods ending on or after 12/31/2017 in accordance with 42 CFR 413.24(f)(4)(iv).

For additional information regarding the new HFS feature incorporating the electronic signature click here.

  • Other Transmittal 4 changes include:
    • Added Worksheet S, Part II, line 10.01 to indicate a No Medicare Utilization ESRD facility. Note that indicating No Utilization will only waive Level One edit 1010E. Low and No Utilization Medicare certified ESRD facilities are required to file full cost reports.
    • Added lines 4.01, 5.01, 8.03 and 9.03 to calculate costs for Acute Kidney Injury (AKI) hemodialysis and AKI peritoneal dialysis for services on or after January 1, 2017.
    • Added numerous level one edit.



ESRD Transmittal 3

The ESRD, 265-11 system was updated to Transmittal 3 by CMS, in May 2014. Transmittal 3 is effective for cost reporting periods ending on or after March 31, 2014. HFS was approved for Transmittal 3 on June 24, 2014 and the software will be released July 2, 2014.

  • Transmittal 3 changes include:
    • Instructional change on Worksheet A-2, indicating that lines 19 and 20 are not to be completed for purchases on or after January 1, 2012.
    • Instructional change for Worksheet B and B-1, clarifying that negative amounts are excluded when allocating A&G and Other Cost
    • Instructional change to Worksheet E, Part I, line 19 indicating that the sequestration adjustment is not to be computed where negative net reimbursement is reported on line 16.
    • Minor description changes on the following forms:
      • S, Part II
      • S, Part III
      • S-1, line 13.01
      • A-2, lines 19 and 20
      • Worksheet B, Column 1
      • Worksheet B-1, Column 1, 8A, 11A, 13A
      • Worksheet E, Part I, lines 2.01, 2.02, 12, 16
      • Worksheet E-1 note
      • Worksheet F, Column 1 description and lines 48 and 49
      • Worksheet F-1, Column headings and line 4
    • Description changes for edits: 1060, 1005S, 1010S, 1020S, 1000A
    • New Level One edits: 1022S, 1005A, 1000C, 1010C, 1010D, 1010E



ESRD Transmittal 2

The ESRD, 265-11 system was updated to Transmittal 2 by CMS, in June 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 2). In addition Transmittal 2 includes bad debt changes effective for FY Begin on or after 10/1/2012.

  • HFS was approved for Transmittal 2 on August 5, 2013.
  • Transmittal 2 changes included:
    • Effective for cost reporting periods ending on or after 12/31/2012 ESRD facilities will no longer report statistics relating to Epoetin or Aranesp on Worksheet S-1 lines 14 and 15 respectfully. Instead all erythropoiesis stimulating agent (ESA) statistics will be reported on line 15.01-15.99. Each type of ESA administered should be reported as a separate subscript beginning with line 15.01.
    • Rebates taken on epoetin and aranesp purchased between 1/1/2011 and 12/31/2011 will be reported on Worksheet A-2, lines 19 and 20 respectively. Effective for purchases on or after 1/1/2012 rebates received for each ESA will be reported on Worksheet A-2, line 20.01 and subsequent subscripts of line 20.
    • The instructions to Worksheet D, Column 4.02 and 6.02, were clarified to indicate that these columns should be used to report services rendered on or after 1/1/2014, for cost reporting periods that straddle 1/1/2014.
    • Revised the instructions to Worksheet E, Part I line 7.03 to calculate total deductibles at 20% of net ESRD PPS payments (line 2.03 column 2) if the sum of lines 7-7.02 is less than 20% of line 2.03, column 2)
    • §3101 of the Middle Class Tax Relief and Job Creation Act of 2012, reduced payments for ESRD bad debts 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%. The bad debt reduction is implemented on Worksheet E, Part I, line 16. In addition, for cost reporting periods beginning on or after 1/1/2013, the ESRD bad debts will no longer be limited to the unrecovered costs for Medicare ESRD services.
    • 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. Sequestration is implemented on Worksheet E, Part I, line 19.
    • CMS added level one edit 1000D to ensure total treatments on Worksheet D, column 1, line 11 are greater than -0-.
    • CMS added level one edit 1000E to ensure that if Medicare visits were reported on Worksheet D, columns 4-4.02, then Medicare payments on Worksheet E, Part I, line 1 must be greater than -0-.
  • HFS’s current version for the ESRD is 2.1.146.0, posted 8/6/2013.