Reconciling Outlier Payments for Hospitals and CMHCs

10.7.2.2 - Reconciling Outlier Payments for Hospitals and CMHCs (Rev. 1760, Issued: 06-23-09; Effective Date: 07-01-09; Implementation Date: 07- 06-09) For hospital outpatient services furnished during cost reporting periods beginning on or after January 1, 2009, all hospitals and CMHCs are subject to the OPPS outlier reconciliation policies set forth in this section. If a hospital or CMHC meets the criteria in §10.7.2.1, the Medicare contractors shall notify the central office and regional office at the address and email address provided in §10.11.3.1. Further instructions for Medicare contractors on reconciliation and the time value of money are provided below in §§10.7.2.3 and 10.7.2.4 of this chapter. The following examples demonstrate how to apply the criteria for reconciliation: EXAMPLE A: Cost reporting period: 01/01/2009-12/31/2009 Overall ancillary CCR used to pay original claims submitted during cost reporting period: 0.40 (In this example, this CCR is from the tentatively settled 2007 cost report.) Final settled overall ancillary CCR from 01/01/2009 - 12/31/2009 cost report: 0.50 Total OPPS outlier payout in 01/01/2009-12/31/2009 cost reporting period: $600,000 Because the CCR of 0.40 used at the time the claim was originally paid changed to 0.50 at the time of final settlement, and the provider received greater than $500,000 in OPPS outlier payments during that cost reporting period, the criteria are met for reconciliation, and therefore, the Medicare contractor notifies the central office and the regional office. The provider’s OPPS outlier payments for this cost reporting period are reconciled using the correct CCR of 0.50. In the event that multiple overall ancillary CCRs are used in a given cost reporting period to calculate outlier payments, Medicare contractors should calculate a weighted average of the CCRs in that cost reporting period. Example B below shows how to weight the CCRs. The Medicare contractor shall then compare the weighted CCR to the CCR determined at the time of final settlement of the cost reporting period to determine if OPPS outlier reconciliation is required. Total OPPS outlier payments for the entire cost reporting period must exceed $500,000 in order to trigger reconciliation. EXAMPLE B: Cost reporting period: 01/01/2009-12/31/2009 Overall ancillary CCR used to pay original claims submitted during cost reporting period: - 0.40 from 01/01/2009 to 03/31/2009 (This CCR could be from the tentatively settled 2006 cost report.) - 0.50 from 04/01/2009 to 12/31/2009 (This CCR could be from the tentatively settled 2007 cost report.) Final settled operating CCR from 01/01/2009 - 12/31/2009 cost report: 0.35 Total OPPS outlier payout in 01/01/2009 -12/31/2009 cost reporting period: $600,000 Weighted average CCR: 0.476 CCR Days Weight Weighted CCR 0.40 90 0.247 (90 Days / 365 Days) (a) 0.099 = (0.40 * 0.247) 0.50 275 0.753 (275 Days / 365 Days) (b) 0.377 = (0.50 * 0.753) TOTAL 365 (a)+(b) = 0.476 The hospital meets the criteria for OPPS outlier reconciliation in this cost reporting period because the weighted average CCR at the time the claim was originally paid changes from 0.476 to 0.35 (which is greater than 10 percentage points) at the time of final settlement, and the provider received an OPPS outlier payment greater than $500,000 for the entire cost reporting period. Even if a hospital or CMHC does not meet the criteria for reconciliation in §10.7.2.1, subject to approval of the central and regional offices, the Medicare contractor has the discretion to request that a hospital or CMHC’s OPPS outlier payments in a cost reporting period be reconciled if the hospital’s most recent cost and charge data indicate that the OPPS outlier payments to the hospital were significantly inaccurate. The Medicare contractor sends notification to the regional office and central office via the address and email address provided in §10.11.3.1. Upon approval of the central and regional office that a hospital or CMHC’s outpatient outlier claims need to be reconciled, Medicare contractors should follow the instructions in §10.7.2.4.