(Medicare Claims Processing Manual)

Final settled operating CCR from 01/01/2009 -  12/31/2009 cost report:  0.35  Total OPPS outlier payout in 01/01/2009 - 12/31/2009 cost reporting period:  $600,000  Weighted average CCR:  0.476   CCR  Days  Weight  Weighted CCR  0.40 90 0.247 (90 Days / 365 Days)  (a) 0.099 = (0.40 * 0.247)  0.50 275 0.753 (275 Days / 365 Days)  (b) 0.377 = (0.50 * 0.753)  TOTAL  365  (a)+(b) = 0.476   The hospital meets the criteria for OPPS outlier reconciliation in this cost reporting period because the weighted average CCR at the time the claim was originally paid changes from 0.476 to 0.35 (which is greater than 10 percentage points) at the time of final settlement, and the provider received an OPPS outlier payment greater than $500,000 for the entire cost reporting period.   Even if a hospital or CMHC does not meet the criteria for reconciliation in 10.7.2.1, subject to approval of the central and regional offices, the Medicare contractor has the discretion to request that a hospital or CMHCs OPPS outlier payments in a cost reporting period be reconciled if the hospitals most recent cost and charge data indicate that the OPPS outlier payments to the hospital were significantly inaccurate.  The Medicare contractor sends notification to the regional office and central office v ia the address and email address provided in 10.11.3.1.  Upon approval of the central and regional office that a hospital or CMHCs outpatient outlier claims need to be reconciled, Medicare contractors should follow the instructions in 10.7.2.4.  10.7.2.3 - Time Value of Money  (Rev. 2242, Issued: 06- 17-11, Effective: 07 -01-11, Implementation: 07- 01-11)  Effective for hospital outpatient services furnished in the first cost reporting period on or after January 1, 2009, at the time of any reconciliation under 10.7.2.2, OPPS outlier payment may be adjusted to account for the time value of money of any adjus tments to OPPS outlier payments as a result of reconciliation.  As described in 42 CFR 419.43(d)(6)(ii), the time value of money is applied from the midpoint of the hospital or CMHCs cost reporting period being settled to the date on which the CMS Central  Office receives notification from the Medicare contractor that reconciliation should be performed.   If a hospital or CMHCs OPPS outlier payments have met the criteria for reconciliation, CMS will calculate the aggregate adjustment using the instructions below concerning reprocessing claims and determine the additional amount attributable to the time value of money of that adjustment.  The index that is used to calculate the time value of money is the monthly rate of return that the Medicare trust fund earns.  This index can be found at http://www.ssa.gov/OACT/ProgData/newIssueRates.html .  The following formula is used to calculate the rate of the time value of money:   (Rate from Web site as of the midpoint of the cost report being settled / 365) * # of days from that midpoint until date of reconciliation.  NOTE : The time value of money can be a positive or negative amount depending if the provider is owed money by CMS or if the provider owes money to CMS.  For purposes of calculating the time value of money, the date of reconciliation is the day on which the CMS Central Office receives notification.  This "date of reconciliation" is based solely on the date CMS Central Office receives notification and not on the date that reconciliation is approved by the CMS Central and Regional Offices.  This date is either the postmark from the written notification sent to the CMS Central Office via mail by the Medicare contractor, or the date an email was received from the Medicare contractor by the CMS Central Office, whichever is first.   The following is an example of the procedures for reconciliation and computation of the adjustment to account for the time value of money:    EXAMPLE:   Cost reporting period:  01/01/2009 -  12/31/2009  Midpoint of cost reporting period:  07/01/2009   Date of reconciliation:  12/31/2010  Number of days from midpoint until date of reconciliation:  548  Rate from Social Security Web site:  4.625%   Overall ancillary CCR used to pay actual original claims in cost reporting period:  0.40 (This CCR could be from the tentatively settled 2006 or 2007 cost report.)   Final settled operating CCR from 01/01/2009 -  12/31/2009 cost report:  0.50 Total OPPS outlier payout in 01/01/2009 -  12/31/2009 cost reporting period:  $600,000  Because the CCR fluctuated from 0.40 at the time the claims were originally paid to 0.50 at the time of final settlement and the provider has an OPPS outlier payout greater than $500,000, the criteria have been met to trigger reconciliation.  The Medicare contractor notifies the CMS Central and Regional Offices.   The Medicare contractor reprices the claims in accordance with the process in 10.7.2.4 below.  The repricing indicates the revised outlier payments are $700,000.   Using the values above, the rate that is used for the time value of money is determined:    (4.625 / 365) * 548 = 6.9438%   Based on the claims reconciled, the provider is owed $100,000 ($700,000 -  $600,000) for the reconciled amount and $6,943.80 for the time value of money.   10.7.2.4 - Procedures for Medicare Contractors to Perform and Record Outlier Reconciliation Adjustments  (Rev.  4233, Issued: 02- 08-19, Effective: 03 -12-19, Implementation: 03- 12-19)  The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare identification number. For purposes of this manual, Medicare beneficiary identifier references both the Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition period and after for certain business areas that will continue to use the HICN as part of their processes.   The following is a step- by-step explanation of the procedures that Medicare contractors are to follow if a hospital (or CMHC) is eligible for outlier reconciliation:   1) The Medicare contractor sends notification to the CMS Central Office (not the hospital or CMHC), via the street address and email address provided in 10.11.3.1 and to the CMS Regional Office that a hospital or CMHC has met the criteria for OPPS outlier re conciliation.  Medicare contractors shall include in their notification the provider number, provider name, cost reporting begin date, cost reporting end date, total outlier payments in the cost reporting period, the CCR or weighted average CCR from the time the claims were paid during the cost reporting per iod eligible for reconciliation and the final settled CCR.   2) If the Medicare contractor receives approval from the CMS Central Office and Regional Office that OPPS outlier reconciliation is appropriate, the Medicare contractor follows steps 3- 14 below.  NOTE : Hospital and CMHC cost reports will remain open until their claims have been processed for OPPS outlier reconciliation.   3) The Medicare contractor shall notify the hospital or CMHC and copy the CMS Regional Office and Central Office in writing and via email (through the address provided in 10.11.3.1) that the hospital or CMHCs OPPS outlier claims are to be reconciled.   4) Prior  to running claims in the FISS Lump Sum Utility*, Medicare contractors shall update the applicable provider record in the Outpatient Provider Specific File (OPSF) by entering the final settled CCR from the cost report in Outpatient Cost to Charge Rat io field.  No other elements in the OPSF shall be updated for the applicable provider records in the PSF that span the cost reporting period being reconciled aside from the CCR.   *NOTE : The FISS Lump Sum Utility is a Medicare contractor tool that, depending on the elements that are input, will produce an extract that will calculate the difference between the original PPS payment amounts and revised PPS payment amounts into a Microsoft A ccess generated report.  The Lump Sum Utility calculates the original and revised payments offline and will not affect the original claim payment amounts as displayed in various CMS systems (such as NCH).    5) Medicare contractors shall ensure that, prior to running claims through the FISS Lump Sum Utility, all pending claims (e.g., appeal adjustments) are finalized for the applicable provider.   6) Medicare contractors shall only run claims in the Lump Sum Utility that meet the following criteria:    TOB 12X, 13X, 34X, 75X, 76X or any TOB with a condition code 07   Claim has a line item date of service of January 1, 2009 or later that also contains a Pay Method Flag of 0   Previous claim is in a paid status (P location) within FISS   Cancel date is blank   7) The Medicare contractor reconciles the claims through the OPPS Pricer software and not through any editing or grouping software.   8) Upon completing steps 3 through 7 above, the Medicare contractor shall run the claims through the Lump Sum Utility.  The Lump Sum Utility will produce an extract, according to the elements in Table 1 below.  NOTE :  The extract must be importable by Microsoft Access or a similar software program (Microsoft Excel).    9) Medicare contractors shall upload the extract into Microsoft Access or a similar software program to generate a report that contains elements in Table 1.  Medicare contractors shall ensure this report is retained with the cost report settlement work papers.   10) For hospitals paid under the OPPS, the Lump Sum Utility will calculate the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17).  If the difference between the original and revised outlier amount  is positive, then a credit amount (addition) shall be issued to the provider. If the difference between the original and revised outlier amount is negative , then a debit amount (deduction) shall be issued to the provider.   11) Medicare contractors shall determine the applicable time value of money amount by using the calculation methodology in 10.7.2.3.  If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility) is a negative amount then the time value of money is also a negative amount. If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility) is a positive amount then the time value of money is also a positive amount.   Similar to step 10, if the time value of money is positive, then a credit amount (addition) shall be issued to the provider.  If the time value of money is negative, then a debit amount (deduction) shall be issued to the provider.  NOTE : The time value of money is applied to the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17).   12) For cost reporting periods beginning before May 1, 2010, under cost report 2552-96, the Medicare contractor shall record the original outlier amount from Worksheet E, Part B, line 1.02 (prior to the inclusion of line 54 of Worksheet E, Part B), the outlier  reconciliation adjustment amount (the difference between the original and revised outlier amount (calculated by the Lump Sum Utility),  the total time value of money, the rate used to calculate the time value of money and the sum of lines 51 and 53 on line s 50- 54, of Worksheet E, Part B of the cost report (NOTE :  the amounts recorded on lines 50, 51, 53 and 54 can be positive or negative amounts per the instructions above).  The total outlier reconciliation amount (Worksheet E, Part B, line 54) shall be included on Worksheet E, Part B, line 1.02.  For complete i nstructions on how to fill out these lines see 3630.2 of the Provider Reimbursement Manual, Part II.