Medicare Payments to HCPPs

40.1 - Medicare Payments to HCPPs (Rev. 30, 09-05-03) Medicare's payment to HCPPs is based on the reasonable cost of providing Medicare- covered services to Medicare enrollees. All necessary and proper expenses of the HCPP in providing Medicare-covered services are recognized. The share of the total HCPP cost that is borne by CMS is related to the Medicare-covered care furnished to Medicare beneficiaries so that no part of their cost would need to be borne by other enrollees or nonenrolled patients. Conversely, costs attributable to other HCPP enrollees and nonenrolled patients are not to be borne by Medicare. The HCPP payment principles take into account the special nature of HCPPs by recognizing costs of marketing, enrollment, and certain other costs unique to the HCPP form of health delivery. Under these principles, there may be more than one method of handling a particular cost item (including apportionment and allocation methods). The method elected by the HCPP must be consistently followed in subsequent periods. A change of method must have advance approval from CMS. Also, any request for a change in the method of handling a particular cost item, including the apportionment or allocation of such items, must be made 90 days prior to the beginning of the reporting year in which the new method is proposed for use.