(Medicare Claims Processing Manual)

10.6.3.4 - Payment Adjustment for Certain Cancer Hospitals Beginning CY 2016 (Rev. 3941; Issued: 12- 22-17; Effective: 01-  01-18; Implementation: 01 -02-18)  The target PCR that should be used in the calculation of the interim monthly payments associated with the cancer hospital adjustment, as described above in section 10.6.3, and at final cost report settlement is 0.92 for hospital outpatient services furnished on or after January 1, 2016 through December 31, 2016.   10.6.3.5 - Payment Adjustment for Certain Cancer Hospitals Beginning CY 2017 (Rev. 3941; Issued: 12- 22-17; Effective: 01-  01-18; Implementation: 01 -02-18)  The target PCR that should be used in the calculation of the interim monthly payments associated with the cancer hospital adjustment, as described above in section 10.6.3, and at final cost report settlement is 0.91 for hospital outpatient services furnished on or after January 1, 2017 through Dec ember 31, 2017.   10.6.3.6 - Payment Adjustment for Certain Cancer Hospitals Beginning CY 2018 (Rev. 3941; Issued: 12- 22-17; Effective: 01-  01-18; Implementation: 01 -02-18)  Section 16002(b) of the 21st Century Cures Act requires that, for CY 2018 and subse quent calendar years, the target PCR that should be used in the calculation of the interim monthly payments associated with the cancer hospital adjustment, as described above in section 10.6.3, and at final cost report settlement is  reduced by 0.01. After including this reduction, for hospital outpatient services furnished on or after January 1, 2018 through December 31, 2018, the target PCR is 0.88. 10.6.3.7 - Payment Adjustment for Certain Cancer Hospitals Beginning CY 2019                                                                                                       (Rev.  4513, Issued: 02- 04-2020, Effective: 01-01- 2020, Implementation: 01-06-2020)  Section 16002(b) of the 21st Century Cures Act requires that, for CY 2018 and subsequent calendar ye ars, the target PCR that should be used in the calculation of the interim monthly payments associated with the cancer hospital adjustment, as described above in section 10.6.3, and at final cost report settlement is reduced by 0.01. After including this reduction, for hospital outpatient services furnished on or after January 1, 2019 through December 31, 2019, the target PCR is 0.88.  10.6.3.8 - Payment Adjustment for Certain Cancer Hospitals Beginning CY 2020                                                                                                      (Rev. 4513, Issued: 02-04-2020, Effective: 01-01- 2020, Implementation: 01-06-2020)  Section 16002(b) of the 21st Century Cures Act requires that, for CY 2018 and subsequent calendar years, the target PCR that should be used in the calculation of the interim monthly payments associated with the cancer hospital adjustment, as described above in section 10.6.3, and at final cost report settlement is reduced by 0.01. After including this reduction, for hospital outpatient services furnished on or after January 1, 2020 through December 31, 2020, the target PCR is 0.89.  10.7 - Outliers  (Rev. 1657, Issued: 12- 31-08, Effective: 01-01-09, Implementation: 01-05-09)     10.7.1 - Outlier Adjustments  (Rev. 3685, Issued: 12- 22-16, Effective: 01-01-17, Implementation: 01-03-17)  The OPPS incorporates an outlier adjustment to ensure that outpatient servi ces with variable and potentially significant costs do not pose excessive financial risk to providers.  Section 419.43(f) of the Code of Federal Regulations excludes drugs, biologicals and items and services paid at charges adjusted to cost from outlier payments.  The OPPS determines eligibility for outliers using either a multiple threshold, which is the product of a multiplier and the APC payment rate, or a combination of a multiple and fixed-dollar threshold.  A service or group of services becomes eli gible for outlier payments when the cost of the service or group of services estimated using the hospitals most recent overall cost- to-charge ratio (CCR) separately exceeds each relevant threshold.  For community mental health centers (CMHCs), CMS determines whether billed partial hospitalization services are eligible for outlier payments using a multiple threshold specific to CMHCs.  The outlier payment is a percentage of the difference between the cost estimate and the multiple threshold.  The CMS OPPS W eb site at www.cms.hhs.gov/HospitalOutpatientPPS/ under Annual Policy Files includes a table depicting the specific hospital and CMHC outlier thresholds and the payment percentages in place for each year of the OPPS.   Beginning in CY 2000, CMS determined outlier payments on a claim basis.  CMS determined a claims eligibility to receive outlier payments using a multiple threshold.  A claim was eligible for outlier payments when the total estima te of charges reduced to cost for the entire claim exceeded a multiple of the total claim APC payment amount.  As provided in Section 1833(t)(5)(D), CMS used each hospitals overall CCR rather than a CCR for each department within the hospital.  CMS continues to use an overall hospital CCR specific to ancillary cost centers to estimate costs from charges for outlier payments.   In CY 2002, CMS adopted a policy of calculating outlier payments based on each individual OPPS (line- item) service.  CMS continued using a multiple threshold, modified to be a multiple of each services APC payment rather than the total claim APC payment amount, and an overall hospital CCR to estimate costs from charges.  For CY 2004, CMS established separate  multiple  outlier thresholds for hospitals and CMHCs.   Beginning in CY 2005, for hospitals only, CMS implemented the use of a fixed- dollar threshold to better target outlier payments to complex and costly services that pose hospitals with significant financial risk.  The current hospital outlier policy is calculated on a service basis using both fixed- dollar and multiple thresholds to determine outlier eligibility.   The current outlier payment is determined by:    Calculating the cost related to an OPPS line -item service, including a pro rata portion of the total cost of packaged services on the claim and adding payment for any device with pass - through status to payment for the associated procedure, by multiplying the total charges for OPPS services by each hospitals overall CCR (see 10.11.8 of this chapter); and    Determining whether the total cost for a service exceeds 1.75 times the OPPS payment and separately exceeds the fixed -dollar threshold determined each year; and    If total cost for the service exceeds both thresholds, the  outlier payment is 50 percent of the amount by which the cost exceeds 1.75 times the OPPS payment.  The total cost of all packaged items and services, including the cost of uncoded revenue code lines with a revenue code status indicator of N, that appea r on a claim is allocated across all separately paid OPPS services that appear on the same claim.  The proportional amount of total packaged cost allocated to each separately paid OPPS service is based on the percent of the APC payment rate for that servic e out of the total APC payment for all separately paid OPPS services on the claim.   To illustrate, assume the total cost of all packaged services and revenue codes on the claim is $100, and the three APC payment amounts paid for OPPS services on the claim are $200, $300, and $500 (total APC payments of $1000).  The first OPPS service or line -item is allocated $20 or 20 percent of the total cost of packaged services, because the APC payment for that service/line- item represents 20 percent ($200/$1000) of tot al APC payments on the claim.  The second OPPS service is allocated $30 or 30 percent of the total cost of packaged services, and the third OPPS service is allocated $50 or 50 percent of the total  cost of packaged services.   If a claim has more than one su rgical  service line  with a status indicator (SI) of S or T and any lines with an SI of S or T have less than $1.01 as charges, charges for all S and/or T lines are summed and the charges are then divided across S and/or T  lines in proportion to their APC payment rate. The new charge amount is used in place of the submitted charge amount in the line -item outlier calculation.   If a claim includes a composite payment that pays for more than one otherwise separately paid servi ce, the charges for all services included in the composite are summed up to one line. To determine outlier payments, CMS estimates a single cost for the composite APC from the summarized charges.  Total packaged cost is allocated to the composite line -item in proportion to other separately paid services on the claim.   In accordance with Section 1833(t)(5)(A)(i) of the Act, if a claim includes a device receiving pass -through payment, the payment for the pass -through device is added to the payment for the ass ociated procedure, less any offset, in determining the associated procedures eligibility for outlier payment, and the outlier payment amount.  The estimated cost of the device, which is equal to payment, also is added to the estimated cost of the procedur e to ensure that cost and payment both contain the procedure and device costs when determining the procedures eligibility for an outlier payment.    CMHC Outlier Payment Cap   Beginning for services provided on or after January 1, 2017, outlier payments made  to CMHCs are subject to a cap, applied at the individual CMHC level, so that each CMHCs total outlier payments for the calendar year do not exceed 8 percent of that CMHCs total per diem payments for the calendar year.  Total per diem payments are total Medicare per diem payments plus the total beneficiary share of those per diem payments.   Future updates will be issued in a Recurring Update Notification.   10.7.2 - Outlier Reconciliation  (Rev. 1657, Issued: 12- 31-08, Effective: 01- 01-09, Implementation: 01- 05-09)  10.7.2.1 - Identifying Hospitals and CMHCs Subject to Outlier Reconciliation  (Rev.  2111, Issued: 12- 03-10, Effective: 04- 01-11, Implementation: 04- 04-11)  A. General   Under 419.43(d)(6)(i), for hospital outpatient services furnished during cost  reporting periods beginning on or after January 1, 2009, OPPS high cost outlier payments may be reconciled upon cost report settlement to account for differences between the overall ancillary CCR used to pay the claim at its original submission by the provider, and the CCR determined at final settlement of the cost reporting period during which the service was furnished.  Hospitals and CMHCs that Medicare contractors identify using the criteria listed below are subject to the OPPS outlier reconciliation policies described in this section.  OPPS outlier payments are reconciled if the CMS Central Office and Regional Office confirm that reconciliation is appropriate.  Services with an APC payment paid at charges adjusted to cost are not subject to reconciliati on policies.   Subject to the approval of the CMS Central Office and Regional Office, a hospitals outpatient outlier claims are reconciled at the time of cost report final settlement if they meet the following criteria:   1. The actual overall ancillary CCR  is found to be plus or minus 10 percentage points or more from the CCR used during that time period to make OPPS outlier payments, and    2. Total OPPS outlier payments in that cost reporting period exceed $500,000.   Subject to the approval of the CMS Central Office and Regional Office, a CMHCs outlier claims are reconciled at the time of cost report final settlement if they meet the following criteria:   1. The actual overall CCR is found to be plus or minus 10 percentage points or more from the CCR used during that time period to make OPPS outlier payments, and   2. Any CMHC OPPS outlier payments are made in that cost reporting period.