Alternative Method for Cost Report Treatment of Employer

390 - Alternative Method for Cost Report Treatment of Employer Health Plans (Rev. 4, 10-01-01) In the case of benefits covered by an employer plan for a Medicare member who is also a group member under the employer’s plan, the Medicare cost-based HMO/CMP may elect to identify the cost or charge for the service covered under that plan. However, instead of specifically identifying those services for which an employer health plan is primarily liable for payment, the HMO/CMP may elect to utilize a member month ratio to establish Medicare’s liability. This election must be made in writing at the time of a timely submitted budget. In addition, this election must be made for the groups of Medicare beneficiaries subject to the MSP provisions as described in this chapter. Once the election is made, the election will remain in effect until it is revoked by the Medicare cost-based HMO/CMP in writing on a timely submitted budget. The member month ratio is developed by dividing the Medicare member months by the total Medicare member months. This ratio would then be applied to covered Medicare service costs resulting in those costs for which Medicare is the primary payer.