Procedure for Medicare Contractors to Perform and Record

20.1.2.7 - Procedure for Medicare Contractors to Perform and Record Outlier Reconciliation Adjustments (Rev. 4390, Issued: 09-06-19, Effective: 10-01-19, Implementation: 10-07-19) The following is a step-by-step explanation of the procedures that Medicare contractors are to follow if a hospital is eligible for outlier reconciliation: 1) The Medicare contractor shall send notification to the CMS Central Office (not the hospital), via email to outliersIPPS@cms.hhs.gov and regional office that a hospital has met the criteria for reconciliation. Medicare contractors shall include in their notification the provider number, provider name, cost reporting begin date, cost reporting end date, total operating and capital outlier payments in the cost reporting period, the operating CCR or weighted average operating CCR from the time the claims were paid during the cost reporting period eligible for reconciliation and the final settled operating and capital CCR. 2) If the Medicare contractor receives approval from the CMS Central Office that reconciliation is appropriate, the Medicare contractor follows steps 3-14 below. NOTE: Hospital cost reports will remain open until their claims have been processed for outlier reconciliation. 3) The Medicare contractor shall notify the hospital and copy the CMS Regional Office and Central Office via email at outliersIPPS@cms.hhs.gov that the hospital’s outlier claims are to be reconciled. 4) Prior to running claims in the *Lump Sum Utility, Medicare contractors shall update the applicable provider records in the Inpatient Provider Specific File (IPSF) by entering the final settled operating and capital CCR from the cost report in the operating and capital CCR fields. Specifically, for hospitals paid under the IPPS, Medicare contractors shall enter the revised operating CCR in PSF field 25 - Operating Cost to Charge Ratio and the revised capital CCR in PSF field 47 - Capital Cost to Charge Ratio. No other elements in the IPSF (such as elements related to the DSH and IME adjustments) shall be updated for the applicable provider records in the IPSF that span the cost reporting period being reconciled aside from the elements for the operating and capital CCRs. *NOTE: The FISS Lump Sum Utility is a Medicare contractor tool that, depending on the elements that are input, will produce an extract that will calculate the difference between the original PPS payment amounts and revised PPS payment amounts into a Microsoft Access generated report. The Lump Sum Utility calculates the original and revised payments offline and will not affect the original claim payment amounts as displayed in various CMS systems (such as NCH). 5) Medicare contractors shall ensure that, prior to running claims through the FISS Lump Sum Utility, all pending claims (e.g., appeal adjustments) are finalized for the applicable provider. 6) Medicare contractors shall only run claims in the Lump Sum Utility that meet the following criteria: • Type of Bill (TOB) equals 11X • Previous claim is in a paid status (P location) within FISS • Cancel date is ‘blank’ 7) The Medicare contractor reconciles the claims through the applicable IPPS Pricer software and not through any editing or grouping software. 8) Upon completing steps 3 through 7 above, the Medicare contractor shall run the claims through the Lump Sum Utility. The Lump Sum Utility will produce an extract, according to the elements in Table 1 below. NOTE: The extract must be importable by Microsoft Access or a similar software program (Microsoft Excel). 9) Medicare contractors shall upload the extract into Microsoft Access or a similar software program to generate a report that contains elements in Table 1. Medicare contractors shall ensure this report is retained with the cost report settlement work papers. 10) For hospitals paid under the IPPS, the Lump Sum Utility will calculate the difference between the original and revised operating and capital outlier amounts. If the difference between the original and revised operating and capital outlier amounts (calculated by the Lump Sum Utility) is positive, then a credit amount (addition) shall be issued to the provider. If the difference between the original and revised operating and capital amounts (calculated by the Lump Sum Utility) is negative, then a debit amount (deduction) shall be issued to the provider. NOTE: The difference between the original and revised operating outlier amounts and the difference between the original and revised capital outlier amounts are two distinct amounts calculated by the lump sum utility and are recorded on two separate lines on the cost report. 11) The operating and capital time value of money amounts are two distinct calculations that are recorded separately on the cost report. Medicare contractors shall determine the applicable time value of money amount by using the calculation methodology in §20.1.2.6. If the difference between the original and revised operating and capital outlier amounts is a negative amount then the time value of money is also a negative amount. If the difference between the original and revised operating and capital outlier amounts is a positive amount then the time value of money is also a positive amount. Similar to step 10, if the time value of money is positive, then a credit amount (addition) shall be issued to the provider. If the time value of money is negative, then a debit amount (deduction) shall be issued to the provider. NOTE: The time value of money is applied to the difference between the original and revised operating and capital outlier amounts. 12) For cost reporting periods beginning before May 1, 2010, under cost report 2552- 96, the Medicare contractor shall record the original operating and capital outlier amounts, the operating and capital outlier reconciliation adjustment amount (the difference between the original and revised operating and capital outlier amounts calculated by the Lump Sum Utility), the operating and capital time value of money and the rate used to calculate the time value of money on lines 50-56, of Worksheet E, Part A of the cost report (NOTE: the amounts recorded on lines 50-53 and 55 thru 56 can be positive or negative amounts per the instructions above). The total outlier reconciliation adjustment amount (the difference between the original and revised operating and capital outlier amount (calculated by the Lump Sum Utility) plus the time value of money) shall be recorded on line 24.99 of Worksheet E, Part A. For complete instructions on how to fill out these lines please see § 3630.1 of the Provider Reimbursement Manual, Part II. NOTE: Both the operating and capital amounts are combined and recorded on line 24.99 of Worksheet E, Part A. For cost reporting periods beginning on or after May 1, 2010, under cost report 2552-10, the Medicare contractor shall record the original operating and capital outlier amounts, the operating and capital outlier reconciliation adjustment amounts (the difference between the original and revised operating and capital outlier amounts calculated by the Lump Sum Utility), the operating and capital time value of money and the rate used to calculate the time value of money on lines 90-96, of Worksheet E, Part A of the cost report (NOTE: the amounts recorded on lines 90- 93 and 95 thru 96 can be positive or negative amounts per the instructions above). The total outlier reconciliation adjustment amount (the difference between the original and revised operating and capital outlier amount (calculated by the Lump Sum Utility) plus the time value of money) shall be recorded on line 69 of Worksheet E, Part A. NOTE: Both the operating and capital amounts are combined and recorded on line 69 of Worksheet E, Part A. 13) The Medicare contractor shall finalize the cost report, issue a NPR and make the necessary adjustment from or to the provider. 14) After determining the total outlier reconciliation amount and issuing a NPR, Medicare contractors shall restore the operating and capital CCR(s) elements to their original values (that is, the CCRs used to pay the claims) in the applicable provider records in the IPSF to ensure an accurate history is maintained. Specifically, for hospitals paid under the IPPS, Medicare contractors shall enter the original operating CCR in PSF field 25 -Operating Cost to Charge Ratio and the original capital CCR in PSF field 47 -Capital Cost to Charge Ratio. If the Medicare contractor has any questions regarding this process it should contact the CMS Central Office via the address and email address provided in §20.1.2.1 (B). Table 1: Data Elements for FISS Extract List of Data Elements for FISS Extract Provider # Health Insurance Claim (HIC) Number Document Control Number (DCN) Type of Bill Original Paid Date Statement From Date Statement To Date Original Reimbursement Amount (claims page 10) Revised Reimbursement Amount (claim page 10) Difference between these amounts Original Deductible Amount, Payer A, B, C (Value Code A1, B1, C1) Revised Deductible Amount, Payer A, B, C (Value Code A1, B1, C1) Difference between these amounts Original Coinsurance Amount, Payer A, B, C (Value Code A2, B2, C2) Revised Coinsurance Amount, Payer A, B, C (Value Code A2, B2, C2) Difference between these amounts Original Medicare Lifetime Reserve Amount in the first calendar year period (Value Code 08) Revised Medicare Lifetime Reserve Amount in the first calendar year period (Value Code 08) Difference between these amounts Original Medicare Coinsurance Amount in the first calendar year period (Value Code 09) Revised Medicare Coinsurance Amount in the first calendar year period (Value Code 09) Difference between these amounts Original Medicare Lifetime Reserve Amount in the second calendar year period (Value code 10) Revised Medicare Lifetime Reserve Amount in the second calendar year period (Value code 10) Difference between these amounts Original Medicare Coinsurance Amount in the second calendar year period (Value code 11) Revised Medicare Coinsurance Amount in the second calendar year period (Value code 11) Difference between these amounts Original Outlier Amount (Value Code 17) Revised Outlier Amount (Value Code 17) Difference between these amounts Original DSH Amount (Value Code 18) Revised DSH Amount (Value Code 18) Difference between these amounts Original IME Amount (Value Code 19) Revised IME Amount (Value Code 19) Difference between these amounts Original New Tech Add-on (Value Code 77) Revised New Tech Add-on (Value Code 77) Difference between these amounts Original Device Reductions (Value Code D4) Revised Device Reductions (Value Code D4) List of Data Elements for FISS Extract Difference between these amounts TOT CHRG – total billed charges (claim page 3) COV CHRG – total covered charges (claim page 3) Original Hospital Portion (claim page 14) Revised Hospital Portion (claim page 14) Difference between these amounts Original Federal Portion (claim page 14) Revised Federal Portion (claim page 14) Difference between these amounts Original C TOT PAY (claim page 14) Revised C TOT PAY (claim page 14) Difference between these amounts Original C FSP (claim page 14) Revised C FSP (claim page 14) Difference between these amounts Original C OUTLIER (claim page 14) Revised C OUTLIER (claim page 14) Difference between these amounts Original C DSH ADJ (claim page 14) Revised C DSH ADJ (claim page 14) Difference between these amounts Original C IME ADJ (claim page 14) Revised C IME ADJ (claim page 14) Difference between these amounts Original Pricer Amount Revised Pricer Amount Difference between these amounts Original PPS Payment (claim page 14) Revised PPS Payment (claim page 14) Difference between these amounts Original PPS Return Code (claim page 14) Revised PPS Return Code (claim page 14) Original UNCOMP CARE AMT (claim page 40) Revised UNCOMP CARE AMT (claim page 40) Difference between these amounts Original VAL PURC ADJ AMT (claim page 40) Revised VAL PURC ADJ AMT (claim page 40) Difference between these amounts Original READMIS ADJ AMT (claim page 40) Revised READMIS ADJ AMT (claim page 40) Difference between these amounts Original HAC PAYMENT AMT (claim page 40) Revised HAC PAYMENT AMT (claim page 40) Difference between these amounts Original EHR PAY ADJ AMT (claim page 40) Revised EHR PAY ADJ AMT (claim page 40) Difference between these amounts Original PPS-ISLET-ADD-ON-AMT (Value Code Q7) List of Data Elements for FISS Extract Revised PPS-ISLET-ADD-ON-AMT (Value Code Q7) Difference between these amounts DRG MSP Indicator (Value Codes 12-16 & 41-43 – indicator indicating the claim is MSP; ‘Y’ = MSP, ‘blank’ = no MSP Reason Code HMO-IME Indicator Filler