Determining Patient Utilization Days, Deductible, and

40.8.8 - Determining Patient Utilization Days, Deductible, and Coinsurance Amounts (Rev. 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22) Where a primary payer pays an amount for Medicare covered services that is equal to or less than the deductible and coinsurance that would apply if Medicare was the primary payer, Medicare charges full utilization. Therefore, it calculates coinsurance in the usual manner. Where a primary payer pays an amount for Medicare covered services that is more than the deductible and coinsurance that would apply if Medicare were the primary payer, Medicare charges utilization only to the extent that it paid for the services. The MSP payment modules calculate days to be charged to the beneficiary's utilization. The A/B MAC (Part A) reports the result in the in the appropriate field of the CWF record as described in CWF documentation. The procedures below describe how utilization and coinsurance are charged. If payment by the primary payer for Medicare covered services is less than the provider's charges for those services and the current Medicare payment amount (without regard to deductible or coinsurance) and the provider does not accept, and is not obligated to accept, the primary payer payment as payment in full, the A/B MAC (Part A) follows the procedures below to determine utilization and coinsurance applicable. Where the stay involves coinsurance days, the A/B MAC (Part A) determines utilization chargeable to the beneficiary. It completes coinsurance value codes and amounts accordingly. No adjustment to covered days is made based on this determination. The provider completes covered days in the usual manner. The A/B MAC (Part A) charges utilization as follows: • It determines the Medicare secondary payment amount in accordance with §§30.5.1 or 30.5.2 above; • It divides this amount by the amount that Medicare would have paid as primary payer. This is the Medicare interim payment for the stay reduced by the deductible and coinsurance for non-PPS providers or the Medicare payment rate reduced by deductible and coinsurance for PPS providers; and • It multiplies this percentage by the number of covered days in the stay or for PPS providers, the number of payable days in the stay. The A/B MAC (Part A) does not charge a partial day resulting from this calculation as a full day if it is less than a half of a day. It charges a full day if it is a half day or more. For PPS providers, where the number of payable days in the stay exceeds the number of days for which benefits are available (e.g., benefits are exhausted during the nonoutlier portion of the stay), the number of utilization days charged may not exceed the actual days available. If regular benefit days are exhausted during the basic portion of the stay and lifetime days are used for the outlier portion of the stay, the A/B MAC (Part A) separately computes the chargeable days for each portion of the stay. The A/B MAC (Part A) charges coinsurance days as follows: • If the days resulting from the utilization calculation are fewer than the full days available for the stay, no coinsurance days are billed; or • If the days resulting from the utilization calculation are greater than the full days available for the stay, coinsurance days are billed for the excess days. Where the provider performs the utilization calculation above, A/B MACs (Part A) must perform the same calculation to verify that coinsurance Value Codes and Amounts are completed correctly. The A/B MAC (Part A) advises the provider of any discrepancies. EXAMPLE 1: Deductible Involved - PPS (no outlier involved) or Non-PPS Hospital An individual was hospitalized 15 days for which total charges were $5,000. The primary payer paid $2,400 for Medicare covered services. No part of the Medicare inpatient deductible of $764 had been met. The Medicare gross payment amount (without regard to the deductible or coinsurance) for the services absent the primary payer's payment would have been $3,600. The Medicare secondary payment is $1,200 ($3,600 - $2,400). Medicare would have paid $2,836 as primary payer ($3,600 - $764). The A/B MAC (Part A) calculates the beneficiary's utilization as follows: $1,200 divided by $2,836 = .423 x 15 days = 6.34 or 6 days, when rounded. EXAMPLE 2: Coinsurance Involved - PPS (no outlier involved) or Non-PPS Hospital An individual was hospitalized for 20 days (all of which are lifetime reserve days) for which total charges were $20,000. The primary payer paid $13,000 for Medicare covered services. The applicable coinsurance amount was $ 7,640. The current Medicare interim payment amount (without regard to the deductible or coinsurance) for the services, absent the primary payer's payment, would have been $17,000. The Medicare secondary payment amount is $4,000 (the Medicare gross payment amount of $17,000 minus the primary payer's payment of $13,000). Medicare would have paid $9,360 as primary payer ($17,000 - $7,640). The A/B MAC (Part A) calculates the beneficiary's utilization as follows: $4,000 divided by $ $9,360 = .427 x 20 days = 8.5 or 9 days when rounded. If the primary payer's payment in this example had been $7,640 or less, full utilization would have been charged. The beneficiary would have been charged with 20 days utilization. EXAMPLE 3: Primary Payer Pays for Specified Number of Days - PPS (no outlier involved) or Non-PPS Hospital The A/B MAC (Part A) uses this formula even when the primary payer pays for only a specified number of days of a stay because of a payment limitation under the plan based upon the number of benefit days available. For example, a provider furnished 20 days of inpatient care. The primary payer paid all of the charges for the first 10 days. These charges were $4,500. No part of the Medicare inpatient deductible of $764 had been met. The current Medicare gross payment amount (without regard to the deductible or coinsurance) that Medicare would have paid for the 20-day stay, absent primary payer coverage, was $7,000. The Medicare secondary payment is $2,500 ($7,000 - $4,500). Medicare would have paid $ 6,236 as primary payer ($7,000 - $764). The A/B MAC (Part A) calculates the utilization charged to the beneficiary as follows: $2,500 divided by $6,236 = .400 X 20 days = 8.01 days or 8, days when rounded. EXAMPLE 4: Coinsurance Involved - PPS (no outlier involved) or Non-PPS Hospital A beneficiary has 17 full days available at admission. The inpatient stay was 20 days. The provider bills 20 days in Covered Days (form locator 7 of the Form CMS-1450) as if there were no other payer involved. After performing the calculation to determine utilization chargeable, it is determined that the beneficiary can be charged with 10 days. Therefore, no coinsurance days are billed. Absent any other insurer's payment, three days are billed in form locator 9 (Coinsurance Days) with Value Code 9 or 11 and Value Amount in form locator 39 (Coinsurance Value Code and Amount) and 20 days are in the "Cost Report Days" field of the CWF record. EXAMPLE 5: Coinsurance Involved - PPS (no outlier involved) or Non-PPS Hospital A beneficiary has 30 coinsurance days available at admission. The hospital stay was 20 days. The provider bills 20 days in Covered Days (form locator 7) as if there were no other payer involved. After performing the calculation to determine utilization chargeable, it is determined that the beneficiary can be charged with 10 days. Therefore, only 10 coinsurance days are billed. Absent any other insurer's payment, 20 days are billed in form locator 9 (Coinsurance Days) with Value Code 9 or 11 and the Value Amount in form locator 39 (Coinsurance Value Code and Amount). The A/B MAC (Part A) enters 10 days in the "Coinsurance Days" field and the "Cost Report Days" field of the CWF Record. Absent any other insurer's payment, 20 days are billed in form locator 9 (Coinsurance Days) with Value Code 9 or 11 and the Value Amount in form locator 39 (Coinsurance Value Code and Amount). In this case, the A/B MAC (Part A) enters 20 days in the "Coinsurance Days" field and the "Cost Report Days" field of the CWF record. EXAMPLE 6: PPS Hospital A beneficiary enters the hospital with two lifetime reserve days (LTR) remaining and elects to use them. The beneficiary is discharged after 15 days before the outlier threshold is reached. The Medicare payment rate is $5,000. The primary payer amount for Medicare covered services is $3,000. The applicable coinsurance amount is $764 (2 LTR days at $382 a day). Medicare would have paid $4,236 as primary payer ($5,000 - $764). Medicare secondary liability = $5,000 - $3,000 = $2,000 Utilization days potentially chargeable equal: $2,000 divided by $4,236 X 15 days = 7 days In this case, charge only the actual days of coverage in the stay, or two days, for utilization and cost reporting purposes. EXAMPLE 7: PPS Hospital - Stay A beneficiary enters the hospital with two regular coinsurance days remaining and is discharged after 15 days. The primary payer amount for Medicare covered services (i.e., the entire stay) was $3,000. The Medicare payment rate is $5,000. The applicable coinsurance amount is $396 (2 coinsurance days at $198 a day). Medicare would have paid $4,604 as primary payer ($5,000 - $396). Medicare secondary liability = $5,000 - $3,000 = $2,000 Regular benefit days chargeable = $2,000 divided by $4,604 X 10 days in basic portion of stay = 7 days Charge the beneficiary two coinsurance days, since only two days were available. Lifetime reserve days chargeable = $2,000 divided by $2,708 X 5 days in outlier portion of stay = 3.6 rounded to 4 days. Charge the beneficiary for lifetime reserve days and determine coinsurance on this basis.