Business Interruption Insurance

Treatment of of business interruption (and similar) revenue on the Provider and Home Office Cost Report

  • A common thought is to treat the revenue like a "rebate" (see below), and thus offset the insurance premium expense to the extent of the insurance proceeds received (likely eliminating the entire insurance premium expense from the cost report).
  • Other CMS guidance related to COVID-19 cost reporting (that does not directly relate to business interruption insurance), states revenue related to SBA and CARES PRF are not be offset on the cost report (pg 117)
  • Before COVID-19 - Income related to business interruption generally resulted from physical damage to the business property impacting ability to provide services.  Providers may have the loss of revenue due to say a flood or fire, something of that nature.
  • Currently due to COVID-19, the recovery is due to expenses and/or lost revenues not paid by the CARES PRF (or other similar funds). 

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