CPA Firm vs. costreporting.ai for Medicare Cost Report Preparation

By costreporting.aiPublished May 26, 2026

Choosing between a CPA firm and costreporting.ai is not an either-or for many providers. A CPA firm provides a service relationship; costreporting.ai is a software platform. The two are complementary in many configurations. This page documents the differences and helps clarify when each path fits.

What CPA firms do for Medicare cost reports

From our market research, cost-report specialist CPA firms typically combine: data collection from the provider's accounting system, classification of the trial balance to CMS cost centers, step-down allocation per the methodology in PRM Pub. 15-1, worksheet preparation against the provider-specific form (CMS-1728-20 for HHA, CMS-1984-14 for Hospice, etc.), ECR file generation, MCReF submission, and post-submission support through MAC review and any reopening proceedings.

Larger generalist firms (e.g., BerryDunn, FORVIS Mazars) bundle this with broader healthcare consulting; cost-report specialist boutiques (e.g., SimiTree, CostreportCPA, Patrick Accounting) focus more narrowly on the cost-report workflow itself. CPAs are licensed by their state Board of Accountancy (not by CMS); their preparation authority comes from the cost-finding standard at 42 CFR § 413.24 applied through licensed professional accounting work, not from a CMS-issued credential.

When the CPA-firm path is the right fit

From our market research, the CPA-firm path is commonly the right fit when:

the provider wants a full-service relationship including audit, tax, and year-round advisory work — not cost-report-only;
the provider is part of a larger health system and needs coordinated reporting across multiple entities;
the provider has a complex fiscal-year situation (mid-year ownership change, multi-state operations, prior-year reopening under 42 CFR § 405.1885) where a long-running CPA relationship adds situational context;
the provider prefers a single accountable firm to a software-plus-internal-review model.

How costreporting.ai is different

We are a software platform, not a service firm. The platform classifies a provider's trial balance to CMS cost centers using AI; a deterministic Decimal-based engine performs every numeric calculation (no AI output ever lands in a numeric column); the provider reviews a confidence-scored draft; the provider's authorized representative signs and files. The provider holds the engagement throughout.

We do not bundle audit, tax, or general advisory work. CPA firms do, and many providers want that bundling. Whether you use a CPA firm, a billing agency, or an independent consultant alongside the platform is up to you — and your authorized representative signs the cost report regardless of which preparation tool or service path you choose. We expect our pilot customers will be providers (and, in some configurations, CPA firms themselves on behalf of provider clients) who want a software-driven preparation workflow with transparent audit-trail traceability for every customer-visible number.

Choosing between them

The honest framing is not "CPA firm or costreporting.ai" — it is "which mix fits your provider's situation." A small single-location HHA may use the platform directly; a multi-entity health system will likely keep a CPA relationship. A CPA firm itself may use the platform as the preparation engine while continuing to own the client relationship. All three configurations are legitimate. The cost-report rule at 42 CFR § 413.24 applies to the output; the path to that output is the provider's choice.

Common questions

Is a CPA required to prepare and sign a Medicare cost report?

No. A CPA is not required by Medicare to prepare or sign the cost report. The cost report is signed by an authorized representative of the provider (commonly the CFO, controller, or designated officer) under 42 CFR § 413.24(f). Many providers do hire a CPA firm because cost-report preparation is specialized work and the documentation-adequacy standard under 42 CFR § 413.24 is high, but it is the provider's authorized representative who attests to the report.

What do cost-report CPA firms typically do?

From our market research, cost-report specialist CPA firms typically combine data collection, classification of the trial balance to CMS cost centers, step-down allocation, worksheet preparation, the ECR file generation and MCReF submission, and post-submission support through MAC review and any reopening. Larger generalist firms (e.g., BerryDunn, FORVIS Mazars) bundle this with broader healthcare consulting; cost-report specialist boutiques (e.g., SimiTree, CostreportCPA, Patrick Accounting) focus more narrowly on the cost-report workflow.

What does a CPA firm typically charge for cost-report preparation?

Public pricing is not commonly published. From our market research, the typical engagement range for full HHA or Hospice cost-report preparation is $5,000-$50,000 per filing depending on provider size, fiscal-year complexity (multi-FY, ownership changes), and whether the engagement includes year-round advisory or only the once-a-year preparation. The wide range reflects real market segmentation — single-location providers commonly fall in the lower half; multi-location and hospital-based providers in the upper half.

When is the CPA-firm path the right fit?

From our market research, the CPA-firm path is commonly the right fit when (a) the provider wants a full-service relationship including audit, tax, and advisory rather than cost-report-only, (b) the provider is part of a larger health system and needs coordinated reporting across multiple entities, (c) the provider has a complex fiscal-year situation (mid-year ownership change, multi-state operations, prior-year reopening) where a long-running CPA relationship adds value, or (d) the provider prefers a single accountable firm to a software-plus-internal-review model.

How is costreporting.ai different from a CPA firm?

We are a software platform, not a service firm. The platform classifies a provider's trial balance to CMS cost centers using AI; a deterministic engine performs every numeric calculation; the provider reviews a confidence-scored draft; the provider's authorized representative signs and files. The provider holds the engagement throughout. We do not bundle audit, tax, or general advisory work. CPA firms do; many providers want that bundling. We expect our pilot customers will be providers (and in some configurations, CPA firms themselves on behalf of provider clients) who want a software-driven preparation workflow with transparent audit-trail traceability for every customer-visible number.

Can a CPA firm use costreporting.ai on behalf of provider clients?

Yes — this configuration is on our post-pilot roadmap. The platform itself is provider-account-scoped today (the November 2026 pilot is direct-to-provider), but the architecture supports multi-client workflows that a firm would use. If you operate a CPA firm and would like to discuss partnership configurations, the contact below routes to our partnership inquiries.

Does using costreporting.ai mean we no longer need a CPA?

No. The platform handles the cost-report preparation workflow — classification, calculation, worksheet preparation, ECR file generation. A CPA is still valuable for the broader scope a CPA provides: external audit, tax, year-round advisory, and the signing-officer trust relationship that a long-running CPA brings. Many of our expected pilot configurations keep an existing CPA relationship and use the platform for the cost-report workflow specifically.

Is costreporting.ai a CMS-approved vendor?

Not yet. We are pursuing CMS-approved vendor status. Until that approval lands, the ECR file produced by the platform is reviewed and signed by your authorized representative before MCReF submission, the same path a provider would follow with any other preparation method.