(Medicare Claims Processing Manual)

For services provided during calendar years 2003, TOPs continued to decrease for all providers except those hospitals that receive hold harmless TOPs (cancer hospitals, childrens hospitals, and rural hospitals having 100 or fewer be ds).  To avoid TOP overpayments, contractors were instructed to revise the monthly interim TOP calculations to reflect the new calculation.   Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effe ctive for services provided between January 1, 2003, and December 31, 2003.   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 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 7.  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 or a cancer hospital go to step 4.  If any other type of hospital, divide the result o f step 2 by the result of step 1, skip step 4 and perform step 5 or 6 as appropriate.   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.  Do not perform steps 5- 6.  Step 5 -  If the result of step 3 is equal to or greater than  .9 but less than 1.0, subtract the result of step 2 from the result of step 1, and multiply the difference by .6 and pay .85 times this amount.   Step 6 -  If the result of step 3 is less than .9, multiply the result of step 1 by .06 and pay .85 times this amount.   Step 7 -  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.   70.4 - Transitional Outpatient Payments (TOPs) for CY 2004 and CY 2005 (Rev. 1657, Issued: 12- 31-08, Effective: 01- 01-09, Implementation: 01- 05-09)  Section 411 of the Medicare Modernization Act (MMA) provided that for services provided on or after January 1, 2004, TOPs are disconti nued for all CMHCs and all hospitals except for rural hospitals having 100 or fewer beds, sole community hospitals (SCHs) which are located in rural areas, and cancer and childrens hospitals.  For CMHCs and hospitals for which TOPs will be discontinued, i nterim TOPs are to be paid for services furnished through December 31, 2003.  Hold harmless TOPs shall continue for services rendered through December 31, 2005, for rural hospitals having 100 or fewer beds.  Cancer hospitals and childrens hospitals are permanently held harmless.  In addition, hold harmless TOPs are paid to sole community hospitals that are located in rural areas, with respect to services furnished during the period that begins with the providers first cost reporting period beginning on or  after January 1, 2004, and ends on December 31, 2005.  NOTE:   If a qualifying SCH has a cost reporting period that begins on a date other than January 1, TOPs and interim TOPs payments will not be paid for services furnished after December 31, 2003, and before the beginning of the providers next cost reporting per iod.  If a hospital qualifies as both a rural hospital having 100 or fewer beds and as a SCH located in a rural area, for purposes of  70.4, the hospital will be treated as a rural hospital having 100 or fewer beds, thereby avoiding a gap in payment if the cost reporting period does not begin on January 1.   If the contractor identifies additional hospitals that are eligible for TOPs payments, the contractor shall make the appropriate interim payments retroactive to January 1, 2004, for small rural hospitals and retroactive to the providers first day of the cost reporting period beginning on or after January 1, 2004 for rural SCHs having greater than 100 beds.  For 2004- 2005, providers will receive interim TOPs payments of 85 percent, and will receive the additional 15 percent (to reach 100 percent) at cost report settlement.  Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided between January 1, 2004, and December 31,  2005.   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 paym ents 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 m onth.  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 t otals 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 transitiona l 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 TOPs payments.  Essential A ccess 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 hospi tal 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 wil l 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 provider 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, provide rs 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 ratio and then mul tiplying 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 during 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 t han 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) extends 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, 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.