(Medicare Claims Processing Manual)

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 furnish ed 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 furnish ed on or after January 1, 2017 through December 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 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, 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 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, 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. 10.6.4 - Payment Adjustment for Rural Emergency Hospitals1 (Rev. 12369, Issued: 11- 17-23; Effective: 01 -01-2023; Implementation: 01- 03-2023)   A rural emergency hospital (REH), as defined in  419.91, is an entity that operates for the purpose of providing emergency department services, observation care, and other outpatient medical and health services specified by the Secretary in which the annu al per patient average length of stay does not exceed 24 hours. The time calculation for determining the length of stay of a patient receiving REH services begins with the registration, check- in or triage of the patient (whichever occurs first) and ends wi th the discharge of the patient from the REH. The discharge occurs when the physician or other appropriate clinician has signed the discharge order, or at the time the outpatient service is completed and documented in the medical record. The entity must not provide inpatient services, except those furnished in a unit that is a distinct part licensed as a skilled nursing facility to furnish post -hospital extended care services.    Rural emergency hospital services, as defined in  419.91, are all covered outpatient department (OPD) services, as defined in section 1833(t)(1)(B) of the Act, excluding services described in section 1833(t)(1)(B)(ii), furnished by an REH that would be pa id under the OPPS when provided in a hospital paid under the OPPS for outpatient services, provided that such services are furnished consistent with the conditions of participation at 42 C.F.R.  485.510 -  485.544.  A. Payment for REH Services  Beginning January 1, 2023, a REH that provides a REH service will receive a Medicare payment for the service that is equal to the amount of payment that would otherwise apply under section 1833(t) of the Act for the equivalent covered OPD service, increase d by 5 percent to reflect the higher costs incurred by such hospitals. The beneficiary co- 1 The information described in Section 10.6.4 of this Manual is based on proposed policies to implement payment for REHs, published as a rider to the CY2023 OPPS proposed rule. All policies are subject to change pending the publication of the final policies  concerning this new provider type, including associated REH payment policies, in the CY2023 OPPS Final Rule, CMS- 1772- FC. If there are changes to these proposed policies made in response to public comments in the final rule, CMS will update this section accordingly.  payment for the service is calculated the same way as it is calculated under section 1833(t)(8) of the Act for the equivalent covered OPD service, excluding the 5 percent payment increase.   EXAMPLE:  1. Service/Rate x 0.05 = Increase Amount for REH Services  $100.00/Rate x 0.05 = $5.00  Increase Amount for REH Services    2. Service/Rate + Increase Amount for REH Services = Allowed Amount   $100.00 + $5.00 = $105.00 Allowed Amount    3. Service/Rate x 0.20 = Coinsurance   $100.00 * 0.20 = $20.00 Coinsurance    Claims for REH services are paid based on OPPS prospective rates and are adjudicated based on OPPS payment policies and rules.  Services performed by an REH that do not meet the definition of an REH service (i.e. certain outpatient services that may be provided on an outpatient basis by OPPS hospitals but are not paid under the OPPS) are paid at the same rate as the service would be paid if performed at an OPPS hospital and paid based on the applicable fee schedule outside of the OPPS.  Such services are not considered REH services and do not receive the additional 5 percent payment that REH services receive. Ambulance services furnished by an entity owned and operated by a rural emergency hospital are paid under the ambulance fee schedule as described at section 1834(l) of the Act. Post -hospital extended care services furnished by a rural emergency hospital that has a unit that is a distinct part licensed as a skilled nursing facility are paid under the skilled nursing facility prospective payment system des cribed at section 1888(e) of the Act. B. Monthly REH Facility Payment  In addition to payment for individual claims, section 1834(x)(2) of the Act requires REHs to be paid a monthly facility payment.  The monthly facility payment for every REH is the same. There is no adjustment to the facility payment because of the size of the REH or amount of revenue generated by the REH.  For 2024 and subsequent years, this payment will be updated annually by the hospital market basket percentage increase.   10.7 - Outliers  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01 -05-09)    10.7.1 - Outlier Adjustments  (Rev. 12423; Issued: 12- 20-23; Effective: 01 -01-24; Implementation: 01 -02-24)    The OPPS incorporates an outlier adjustment to ensure that outpatient services 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, w hich 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 eligible 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 or intensive outpatient 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 Web 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 estimate 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 a mount, 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 appear 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 service 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 l ine-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 total 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.