Medicare Cost Report Updates for 2025: Critical Changes for FQHCs
Significant changes to Medicare Cost Report requirements for 2025 are reshaping how Federally Qualified Health Centers (FQHCs) track and report preventative vaccine costs. Most notably, hepatitis B vaccines now qualify for cost-based reimbursement through the Medicare cost report process, effective January 1, 2025. This change requires immediate attention from FQHC finance teams.
Additionally, Medicare introduced interim payments for all preventative vaccines beginning July 1, 2025, fundamentally altering cash flow dynamics and settlement calculations. These policy shifts create both opportunities and challenges that demand strategic preparation and careful documentation.
Understanding the New Hepatitis B Vaccine Reimbursement
The Centers for Medicare & Medicaid Services (CMS) has expanded the list of preventative vaccines eligible for cost-based reimbursement to include hepatitis B vaccines beginning January 1, 2025. This means FQHCs can now recover the actual costs of providing hepatitis B vaccines to Medicare patients through the annual cost report settlement process—just like flu, pneumonia, and COVID-19 vaccines.
However, there is a critical timing consideration: for fiscal year ends of June 30, 2025, only six months of hepatitis B vaccine activity (January through June 2025) qualifies for inclusion. Health centers with different fiscal year ends will have varying inclusion periods, but January 1, 2025 remains the universal start date for hepatitis B vaccine cost reporting.
The Template Challenge
CMS has not yet released an updated Medicare cost report template to accommodate hepatitis B vaccines. This creates a reporting challenge that requires interim solutions. Medicare Administrative Contractors (MACs) including Noridian and NGS have indicated they are aware of this gap and accept temporary reporting methodologies until official guidance is released.
FQHCs preparing cost reports should work with experienced consultants or carefully document their approach to ensure compliance while awaiting the updated template.
What This Means for Your FQHC
New Data Collection Requirements
To properly report hepatitis B vaccines on your Medicare cost report, you will need to gather:
Purchase invoices for hepatitis B vaccines from January 1, 2025 forward
Encounter data showing hepatitis B vaccine administration with dates of service
Patient-level vaccination rosters that include hepatitis B alongside other preventative vaccines
Staff time allocation records for vaccine administration
Pay special attention to filtering your data by date of service. Unlike other vaccines that may span your full fiscal year, hepatitis B vaccines must only include activity from January 1, 2025 onward for this reporting cycle.
The New CPT Codes
Several CPT codes relate to hepatitis B vaccine administration that should be tracked in your billing data:
90739, 90740, 90743, 90744, 90747, 90748 (vaccine administration codes)
G0010 (vaccine administration code specific to hepatitis B)
Your billing system should be configured to identify and report these codes separately to facilitate accurate cost report preparation.
Interim Payments Change the Game
Beginning July 1, 2025, Medicare started paying for preventative vaccines through the claims process rather than requiring health centers to wait for annual settlement. While this significantly improves cash flow, it also means:
Future settlement amounts will be substantially smaller, reconciling only the difference between actual costs and interim payments
MACs will likely scrutinize cost allocation methodologies more closely to verify costs exceed interim payments
Financial projections should be adjusted to account for regular interim payments rather than large annual settlements
This transition represents a positive change for FQHC cash flow but requires adjusting expectations around settlement timing and amounts.
Essential Steps for FQHC Finance Teams
Start Tracking Hepatitis B Vaccine Data Now
Even if your fiscal year has already ended, begin implementing systems to track hepatitis B vaccine costs and activity separately. This includes establishing processes to:
Maintain separate invoice files for hepatitis B vaccines
Generate reports that filter encounter data by vaccine type and date of service
Document staff time spent on hepatitis B vaccine administration
Communicate Clearly with Your MAC
When submitting your Medicare cost report, include a cover letter that explains how you are reporting hepatitis B vaccines in the absence of an updated CMS template. Clear communication prevents delays and potential audit findings. Your cover letter should specify:
Where hepatitis B vaccine costs appear in your cost report
That this represents an interim reporting methodology pending official CMS guidance
Confirmation that only dates of service from January 1, 2025 forward are included
Strengthen Your Cost Documentation
As interim payments reduce settlement amounts, expect MACs to increase scrutiny of whether your actual costs truly exceed the interim payments received. Strengthen your documentation by:
Conducting and documenting time studies that show staff time per vaccine type
Maintaining detailed records of all cost allocation methodologies
Keeping organized invoice files that clearly support reported vaccine costs
Updating allocation methods regularly to reflect current operational practices
Recent MAC reviews have begun requesting more detailed explanations of cost allocation methodologies, particularly for vaccine administration. Proactive documentation helps expedite the review process.
Prepare Detailed Vaccination Rosters
Patient vaccination rosters should include hepatitis B vaccines alongside flu, pneumonia, and COVID-19. To facilitate MAC review, include clear subtotals for each vaccine category. These subtotals should match the vaccine counts reported elsewhere in your cost report and serve as a quality control mechanism before submission.
Review Settlement Documents Carefully
When you receive preliminary and final settlement documents from Medicare, review them carefully to ensure accuracy. Settlement documents can contain errors, and catching them early prevents lengthy dispute processes. Key items to verify:
The settlement amount matches what you submitted or includes reasonable, explained adjustments
Any withheld amounts are properly justified and documented
Payments have been received as indicated in the settlement documentation
If settlement documents indicate you owe money back to Medicare or show unexpected adjustments, consult with Medicare cost report specialists before responding to ensure you protect your organization's interests.
Preparing for Future Changes
The Medicare cost report landscape continues to evolve. FQHCs should anticipate:
CMS will eventually release an updated cost report template with dedicated hepatitis B vaccine line items
Settlement amounts will decrease as interim vaccine payments continue throughout the year
MAC scrutiny of cost allocation methodologies will likely intensify
Staying informed about Medicare policy changes and maintaining strong relationships with experienced Medicare cost report consultants will help your FQHC navigate these evolving requirements successfully.
Taking Action on Medicare Cost Report Changes
The addition of hepatitis B vaccines to Medicare's cost-based reimbursement model represents a valuable opportunity for FQHCs to recover actual costs of providing essential preventative services. Combined with the new interim payment structure, these changes fundamentally alter both cash flow and cost reporting processes.
Success requires careful attention to data collection, particularly the January 1, 2025 start date for hepatitis B inclusion. FQHCs must implement robust tracking systems, maintain thorough documentation of cost allocation methodologies, and communicate proactively with Medicare Administrative Contractors about interim reporting approaches.
While navigating these changes independently is possible, the complexity and financial stakes involved make expert guidance a worthwhile investment. Community Link Consulting specializes in helping FQHCs maximize Medicare reimbursement while maintaining full compliance with federal requirements.
Expert Medicare Cost Report Support
Community Link Consulting offers comprehensive Medicare cost report preparation services designed specifically for Federally Qualified Health Centers. Our team of experienced consultants brings firsthand health center leadership experience and deep technical expertise to ensure your organization captures every reimbursement dollar while maintaining compliance.
Our Medicare cost report services include:
Complete cost report preparation incorporating all 2025 regulatory changes
Hepatitis B vaccine cost calculation and documentation support
MAC communication and audit response assistance
Settlement document review and reconciliation
Cost allocation methodology development and documentation
Phone: 509-226-1393
Email: info@communitylinkconsulting.com
About the Author
Carolyn Commers, Lead Consultant
Community Link Consulting
Carolyn brings 20 years of healthcare financial management experience, specializing in cost reports, UDS reporting, and financial analysis for health centers. With a background as Director of Practice Management for a large hospital system and degrees in management, accounting, and psychology, she combines deep technical expertise with practical operational knowledge. Her work with FQHCs focuses on maximizing reimbursement while ensuring regulatory compliance.
References
Centers for Medicare & Medicaid Services. (2025). Medicare Benefit Policy Manual, Chapter 13: Preventive Services.
Noridian Healthcare Solutions. (2025). Medicare Cost Report Preparation Guidance for Federally Qualified Health Centers.
NGS Medicare Administrative Contractor. (2025). FQHC Cost Report Submission Requirements.
