Medicare Secondary Payment Calculation Methodology When

40.8.1 - Medicare Secondary Payment Calculation Methodology When Proper Claim Has Been Filed (Rev . 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22) A. Definition of the Gross Amount Payable by Medicare The gross amount payable by Medicare is the amount prior to deductions for the Medicare deductible and/or coinsurance amounts. It consists of: • The current Medicare interim payment amount (see §40.8.2) for providers paid on a reasonable cost basis; • The Medicare payment for hospitals paid on a prospective payment basis; or • The fee schedule amounts. If a provider furnishes services that are payable under more than one payment method (e.g., fee schedule amounts), Medicare determines the combined amount for the services as its gross amount payable without regard to the effect of the Medicare deductible, coinsurance, or payment by the third-party payer. For PPS providers, the Medicare payment rate is the amount Medicare would pay under PPS. It consists of the total prospective payment amount for the discharge and interim payments for those items that are paid retroactively. It is determined without regard to any deductible or coinsurance. The amount is computed in the same manner for PIP and non-PIP hospitals and is the sum of: • The total prospective payment amount, as determined by PRICER, including payment for the DRG and any outlier payments, adjustments for hospitals serving a disproportionate share of low income patients, indirect medical education, or other payments. Since the basic prospective payment is payable if a beneficiary has at least one covered day in the stay, payable days may exceed covered days if there are non-outlier days before entitlement or after benefits are exhausted, and • Payment for direct graduate medical education activities (42 CFR 413.86).