(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 ratio and then multiplying this amount by the provider -specific payment -to-cost ratio (PSPCR).   Step 2 -  Add together the total Medicare program payments, unre duced 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 transitiona l 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 hospitals with 100 or fewer be ds 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 provision for rural hospitals wi th 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 calc ulations 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 effective for servi ces 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 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 child rens 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, stor e 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 o ften implemented in the system after their effective date, overpayments or underpayments in interim TOPs to providers are expected.   Unless directed by CMS, retroactive calculations of monthly interim TOP amounts are not necessary because any difference in  interim TOP payments and actual TOP amounts determined on the cost report will be taken into account in the cost report settlement process, including tentative settlements.   If mutually agreed upon by both the contractor and the provider, the contractor c an pay less than 85 percent of the monthly TOP payment to that provider, to avoid significant overpayments throughout the year that must be paid back to the contractor at cost report settlement.   Contractors should advise providers of the revised TOP calculations and other changes in OPPS using their normal communication protocols (Web site, regularly scheduled bulletins, electronic bulletin boards, or listserv).   80 - Shared system Requirements to Incorporate Provider -Specific Payment -to-Cost Ratios into t he Calculation of Interim Transitional Outpatient Payments Under OPPS (Rev. 1, 10- 03-03) A-01-44  80.1 - Background - Payment -to-Cost Ratios (Rev. 1060, Issued: 09- 18-06, Effective: 10- 01-06, Implementation: 10- 02-06)  Under regulations at 42 CFR 419.70, hospitals and community mental health centers (CMHCs) that are subject to the OPPS may be eligible to receive a transitional corridor payment, frequently referred to as a TOP.  The purpose of  the TOP is to restore some of the decrease in the payment that a provider may experience under the OPPS.  Providers that are eligible for TOPs receive monthly interim payments.  However, the final TOP amount is calculated based on the providers settled c ost report.  Final TOP payments for a calendar year are based on the difference between what the provider was paid under the OPPS, and the providers pre -Balanced Budget Act (BBA) amount.  The pre -BBA amount is an estimate of what the provider would have  been paid during the calendar year for the same services under the system that was in effect prior to OPPS.  If the pre -BBA amount exceeds the actual OPPS payments a provider received during a calendar year, qualifying cancer centers and childrens hospit als are permanently held harmless, and will receive the entire amount of the difference between their OPPS payments and  their pre -BBA amount.  Other hospitals and CMHCs may receive a portion of the difference as a TOP, depending on the rules listed above.   The pre -BBA amount is calculated by multiplying the providers PCR, based on the providers base year cost report, times the reasonable costs the provider incurred during a calendar year to furnish the services that were paid under the OPPS.  For most hos pitals and CMHCs, the base year cost report used to calculate the payment -to-cost ratio is the cost report that ended during calendar year 1996.  However, if a hospital or CMHC did not file a cost report that ended in calendar year 1996, the payment -to cos t ratio will be calculated using the providers first cost report that ended after calendar year 1996 and before calendar year 2001.   80.2 - Using the Newly Calculated PCR for Determining Final TOP Amounts  (Rev. 1, 10- 03-03) A-01-44  Final TOP amounts are determined for each calendar year, based on the calendar year or portion of a calendar year that falls within a providers cost reporting period.  The PCR is one factor used on Worksheet E, Part B, of the hospital cost report (Form CMS -2552 -  96), and Worksheet J -3 of the CMHC cost report (Form CMS -2088) in calculating the providers final TOP amount.  Once calculated, the providers PCR will be used to calculate the providers pre-  BBA amount for all calendar years for which the provider may be eligible fo r a TOP payment.  The PCR will not change each year.   80.3 - Using the Newly Calculated PCR for Determining Interim TOPs (Rev. 1060, Issued: 09- 18-06, Effective: 10- 01-06, Implementation: 10- 02-06)  Providers that are eligible for TOPs receive monthly inte rim payments.  Initially, the calculation of the monthly payment used a national uniform PCR of 80 percent for all providers.  After A/B MACs (A) calculated a provider -specific PCR, no later than October 1, 2001, that PCR shall be used in calculating monthly interim payments to the provider.  The shared systems maintainers will populate the PCR field of the Provider Specific File (formerly cost -of-living adjustment field) to reflect the provider -specific PCR.   The shared systems maintainers will revise the monthly TOPs calculation to use the provider -specific PCR, taken from the Provider Specific File, in lieu of the national PCR of 80 percent.  If the value in the PCR field in the Provider Specific File is blank (i.e., the A/B MAC (A) has not yet calculated  a provider -specific PCR), the A/B MAC (A) must immediately calculate a provider -specific PCR and cannot continue to use the national PCR of 80 percent.  The change to the provider -specific file and the change in the calculation of TOPs payments were effective on July 1, 2001.    90 - Discontinuation of Value Code 05 Reporting  (Rev. 1777; Issued:  07- 24-09; Effective Date:  01- 01-08; Implementation Date:  01 -04-10)  Value code 05, Professional Component Included in Charges and Also Billed Separately to Carri er, was discontinued with the implementation of OPPS, including claims for Critical Access Hospitals and other hospitals not subject to OPPS.   100 - Medicare Summary Notice (MSN)  (Rev. 1, 10- 03-03)  Effective for claims with dates of service on or after August 1, 2000, A/B MACs (A) must modify the MSN for services provided by providers under OPPS to reflect the addition of an APC number.  This APC number should be placed next to the HCPCS code included under the Services Provided column, and must be wit hin a parenthesis.  The coinsurance column should reflect the coinsurance amount for which the beneficiary is responsible.  In addition, the back of the notice must be modified.  In place of the current language, the notice should reflect the following lan guage:   THE AMOUNT YOU MAY BE BILLED for Part B services includes:   Annual deductible, the first $100 of Medicare Part B charges each year;   After the deductible has been met for the year, depending on services received, a coinsurance amount  (20 percent of  the amount charged), or a fixed copayment  for each service; and   Charges for services or supplies that are not covered by Medicare.  You may not have to pay for certain denied services.  If so, a note on the front will tell you.  The Spanish version shoul d read as follows:   La cantidad por la cual usted podra ser facturado incluye: