(Medicare Claims Processing Manual)

Step 1 -  Compute the pre -BBA amount for each month by first multiplying the total charges for covered services for all OPPS services on claims paid during the month and reduce the total charges to cost by multiplying them by the outpatient cost -to-charge r atio and then multiplying this amount by the provider -specific payment -to-cost ratio (PSPCR).   Step 2 -  Add together the total Medicare program payments, unreduced coinsurance and deductible applied for all APCs, as well as all outlier payments and transitional pass -through payments for drugs, biologicals and/or devices for those same claims paid du ring the month as those used in Step 1.  If the result is greater than the result of step 1, go to step 4.  No transitional payment is due this month.  Step 3 -  If the hospital is a childrens hospital, a small rural hospital with not more than 100 beds, a rural sole community hospital, or a cancer hospital, subtract the result of step 2 from the result of step 1 and pay .85 times this amount.   Step 4 -  When the result of step 2 is greater than the result of step 1 for the final month of a providers cost report period, do nothing more.  When the result of step 2 is greater than the result of step 1 for any other month, store all step 1 and step 2 totals and include these totals with the totals for the next months TOP calculation.  70.5 - Transitional Outpatient Payments (TOPs) for CY 2006 -CY 2008  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  Hold harmless transitional outpatient payments (TOPs) to small rural hospitals and rural sole community hospitals were scheduled to expire December 31, 2005.  Section 5105 of The Deficit Reduction Act (DRA) of 2005 reinstituted these hold harmless payments  through December 31, 2008, for rural hospitals having 100 or fewer beds that are not sole community hospitals.  Small rural hospitals will continue to receive TOPs payments through December 31, 2008.  Sole community hospitals are no longer eligible for TO Ps payments.  Essential Access Community Hospitals (EACHs) are considered to be sole community hospitals under section 1886(d)(5)(D)(iii)(III) of the Act.  Therefore, EACHs are not eligible for TOPs payments for CY 2006- CY 2008.  If a hospital qualifies as  both a small rural hospital and a rural SCH, for purposes of receiving TOPs and interim TOPs in 70.5, the hospital will be treated as a rural SCH.  These providers are not eligible for TOPs for services furnished on or after January 1, 2006.  The DRA specifies that providers will receive 95 percent of the hold harmless amount during 2006, 90% of the hold harmless amount in 2007, and 85 percent of the hold harmless amount in 2008.  Interim TOPs payments will continue at 85 percent, and the provi der will continue to receive additional payments at cost report settlement, similar to past policy.  For 2006, providers will continue to receive interim TOPS payments of 85 percent and will receive the additional 10 percent (to reach 95 percent) at cost report settlement.  For 2007, providers will receive the additional 5 percent (to reach 90 percent) at cost report settlement.  For 2008, providers will not receive any additional money at cost report settlement.   Cancer and children's hospitals are permanently held harmless and will continue to receive TOPs payments in 2006 and beyond.   Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided between January 1, 2006, and December 31, 2008.   Step 1 -  Compute the pre -BBA amount for each month by first multiplying the total charges for covered services for all OPPS services on claims paid during the month and reduce the total charges to cost by multiplying them by the outpatient cost -to-charge r atio and then multiplying this amount by the provider -specific payment -to-cost ratio (PSPCR).   Step 2 -  Add together the total Medicare program payments, unreduced coinsurance and deductible applied for all APCs, as well as all outlier payments and transitional pass -through payments for drugs, biologicals and/or devices for those same claims paid du ring the month as those used in Step 1.  If the result is greater than the result of step 1, go to step 59.  No transitional payment is due this month.  Step 3 -  If the hospital is a childrens hospital, a small rural hospital that is not also a SCH, EACH, or a cancer hospital, go to step 4.  Step 4 -  If the hospital is a childrens hospital, a small rural hospital with not more than 100 beds or a cancer hospital, subtract the result of step 2 from the result of step 1 and pay .85 times this amount.   Step 5 -  When the result of step 2 is greater than the result of step 1 for the final month of a providers cost report period, do nothing more.  When the result of step 2 is greater than the result of step 1 for any other month, store all step 1 and step 2 totals and include these totals with the totals for the next months TOP calculation.  70.6 - Transitional Outpatient Payments (TOPs) for CY 2009 (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  Hold harmless transitional outpatient payments (TOPs) to small rural hospitals and rural sole community hospitals that were scheduled to expire December 31, 2008.  Section 147 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) exte nds the hold harmless provision for small rural hospitals with 100 or fewer beds through December 31, 2009, at 85 percent of the hold harmless amount.  Section 147 also provides 85 percent of the hold harmless amount from January 1, 2009, through December 31, 2009, to sole community hospitals with 100 or fewer beds.  Essential Access Community Hospitals (EACHs) are considered to be sole community hospitals under section 1886(d)(5)(D)(iii)(III) of the Act.  Therefore, EACHs are also eligible for TOPs for CY 2009.  Cancer and children's hospitals are permanently held harmless and continue to receive TOPs payments in CY 2009.  Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided between January 1, 2009, and December 31, 2009.   Step 1 -  Compute the pre -BBA amount for each month by first multiplying the total charges for covered services for all OPPS services on claims paid during the month and reduce the total charges to cost by multiplying them by the outpatient cost -to-charge ratio and then multiplying this amount by the provider -specific payment -to-cost ratio (PSPCR).   Step 2 -  Add together the total Medicare program payments, unreduced coinsurance and deductible applied for all APCs, as well as all outlier payments (including reconciled outlier payments and the time value of money) and transitional pass -through payments  for drugs, biologicals and/or devices for those same claims paid during the month as those used in Step 1.  If the result is greater than the result of step 1, go to step 4.  No transitional payment is due this month.  Step 3 -  If the hospital is a childrens hospital, a cancer hospital, a rural hospital with 100 or fewer beds, or a sole community hospital (including EACHs) with 100 or fewer beds, subtract the result of step 2 from the result of step 1 and pay .85 times this amount.  If the hospital is not one of the hospital types listed above, no payment is made.  Step 4 -  When the result of step 2 is greater than the result of step 1 for the final month of a providers cost report period, do nothing more.  When the result of step 2 is greater than the result of step 1 for any other month, store all step 1 and step 2 totals and include these totals with the totals for the next months TOP calculation.  70.7 - Transitional Outpatient Payments (TOPs) for CY 2010 through CY 2012  (Rev. 2531, 08- 24-12, Effective:10- 01-12, Implementation:10- 01-12)  Hold harmless transitional outpatient payments (TOPs) to small rural hospitals and rural sole community hospitals were scheduled to expire December 31, 2009. Section 3121 of the Affordable Care Act extended the hold harmless provision for small rural hospi tals with 100 or fewer beds through December 31, 2010, at 85 percent of the hold harmless amount.  Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) are no longer limited to those with 100 or fewer beds effective January 1, 2010 through December 31, 2010 and these providers will receive TOPs payments at 85 percent of the hold harmless amount until December 31, 2010.  Section 108 of the Medicare and Medicaid Extenders Act of 2010 (MEA) further extended the hold harmless provisi on for rural hospitals with 100 or fewer beds and to all SCHs (and EACHs) regardless of bed size through December 31, 2011 at 85 percent of the hold harmless amount.   Section 308 of the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA) as amended by section 3002 of the Middle Class Tax Relief and Jobs  Creation Act , extends the Outpatient Hold -Harmless provision, effective for dates of service on or after January 1, 2012, through December 31, 2012, to rural hospitals with 100 or fewer beds.   Section 308 of the Temporary Payroll Tax Cut Continuation Act of 2011 also extended through February 29, 2012 the hold harmless provision for SCHs (and EACHs) without the bed size limitation.  However, section 3002 of the Middle Class Tax Relief and Jobs  Creation Act  extended through December 31, 2012, the hold harmless provision for SCHs (and EACHs) that have no more than 100 beds.  Cancer and children's hospitals are permanently held harmless under section 1833(t)(7)(D)(ii) of the Social Security Act.   Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided by SCH (and EACHs) with more than 100 beds between January 1, 2010 and February 29, 2012.  This calculation is ef fective for services provided by rural hospitals with 100 or fewer beds and SCHs (and EACHs) with 100 or fewer beds between January 1, 2010 and December 31, 2012.   Step 1 -  Compute the pre -BBA amount for each month by first multiplying the total charges for covered services for all OPPS services on claims paid during the month and reduce the total charges to cost by multiplying them by the outpatient cost -to-charge r atio and then multiplying this amount by the provider -specific payment -to-cost ratio (PSPCR).   Step 2 -  Add together the total Medicare program payments, unreduced coinsurance and deductible applied for all APCs, as well as all outlier payments (including reconciled outlier payments and the time value of money) and transitional pass -through payments  for drugs, biologicals and/or devices for those same claims paid during the month as those used in Step 1.  If the result is greater than the result of step 1, go to step 4.  No transitional payment is due this month.   Step 3 -  If the hospital is a childrens hospital, a rural hospital with 100 or fewer beds, or a sole community hospital (including EACHs), subtract the result of step 2 from the result of step 1 and pay .85 times this amount.  If the hospital is not one of the hospital types listed above, no payment is made.   Step 4 -  When the result of step 2 is greater than the result of step 1 for the final month of a providers cost report period, do nothing more.  When the result of step 2 is greater than the result of step 1 for any other month, store all step 1 and step 2 totals and include these totals with the totals for the next months TOP calculation.   70.8 - TOPs Overpayments (Rev. 2141, Issued: 01- 24-11, Effective: 01 -01-11, Implementation: 01- 03-11)  Because the revised TOP calculations are often implemented in the system after their effective date, overpayments or underpayments in interim TOPs to providers are expected.