Payment Adjustments - Outlier Payments

10.1.21 - Payment Adjustments - Outlier Payments (Rev. 10758; Issued: 05-11-21; Effective: 01-01-22; Implementation: 08-11-21) HH PPS payment groups are based on averages of home care experience. When cases “lie outside” expected experience by involving an unusually high level of services in 30- day periods of care, Medicare claims processing systems will provide outlier payments in addition to the case-mix adjusted payment. Outlier payments can result from medically necessary high utilization in any or all of the service disciplines. Outlier determinations are made by comparing: • The estimated cost for a period of care, calculated as the sum of the products of number of units of each discipline on the claim and each wage-adjusted national standardized per unit rate for each discipline (1 unit = 15 minutes); with • The sum of the period payment and a wage-adjusted standard fixed loss threshold amount. If the estimated cost is greater than the wage adjusted and case-mix specific payment amount plus the wage adjusted fixed loss threshold amount, a set percentage (the loss sharing ratio) of the amount by which the estimated cost exceeds the sum will be paid to the HHA as an outlier payment. Units considered for outlier payment are subject to a limit of 32 units (8 hours), summed across the six disciplines of care, per date of service. For rare instances when more than one discipline of care is provided and there is more than 8 hours of care provided in 1 day, the cost associated with the care provided during that day will be calculated using a hierarchical method based on the cost per unit per discipline. The discipline of care with the lowest associated cost per unit will be discounted in the calculation of cost in order to cap the estimation of cost at 8 hours of care, summed across the six disciplines, per day. The outlier payment is a payment for an entire period, and therefore carried only at the claim level on the paid claim. It is not allocated to specific lines of the claim. HHAs do not submit anything on their claims to be eligible for outlier consideration. The outlier payment shall be included in the total payment for the claim on a remittance, but it will be identified separately on the claim using value code 17 with an associated dollar amount representing the outlier payment. Outlier payments will also appear on the electronic remittance advice in a separate segment. Outlier payments made to each HHA are subject to an annual limitation. Medicare systems ensure that outlier payments comprise no more than 10 percent of the HHA’s total HH PPS payments for the year. Medicare systems track both the total amount of HH PPS payments that each HHA has received and the total amount of outlier payments that each HHA has received. When each HH PPS claim is processed, Medicare systems compare these two amounts and determine whether the 10 percent has currently been met. If the limitation has not yet been met, any outlier amount is paid normally. If the limitation has been met or would be exceeded by the outlier amount calculated for the current claim, other HH PPS amounts for the claim are paid but any outlier amount is not paid. Partial outlier payments are not made. The contractor shall use the following remittance advice messages and associated codes when not paying outlier amounts under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three. Group Code: CO CARC: 119 RARC: N/A MSN: N/A Since the payment of subsequent claims may change whether an HHA has exceeded the limitation over the course of the timely filing period, Medicare systems conduct a quarterly reconciliation process. All claims where an outlier amount was calculated but not paid when the claim was initially processed shall be reprocessed to determine whether the outlier has become payable. If the outlier can be paid, the claim is adjusted to increase the payment by the outlier amount. Additionally, if any HHAs are found to have been overpaid outlier during the quarterly reconciliation process, claims are adjusted to recover any excess payments. These adjustments appear on the HHA’s remittance advice with a type of bill code that indicates a contractor-initiated adjustment (TOB 032I) and the coding that typically identifies outlier payments. This quarterly reconciliation process occurs four times per year, in February, May, August and November.