(Medicare Benefit Policy Manual)

The streamlined method cap calculation for a Medicare beneficiary who has been in more than one Medicare -certified hospice is identical to the proportional method (as described below).  Therefore, Hospice A would count Ms. Smith as a fraction (0.64) in its  2018 cap year and would not count Ms. Smith again in its 2019 cap year.  Hospice B would count Ms. Smith as a fraction (0.36) in its 2019 cap year and would not count Ms. Smith in its 2018 cap year.  Medicare payments for hospice care provided would be counted in the cap year in which those services were provided, regardless of when payments were actually made, using the best data available at the time of the calculation.   Proportional Method :   Under the proportional method, Ms. Smith would be counted as follows:   Hospice A:  2018 cap year (June 1st  August 15th):    76 days   =   76/119 =  0.64  Hospice B  2019 cap year (Jan 15th -  Feb 26th):     43 days   =     43/119 =  0.36 Total days:      119 days   =     1.00  The Medicare contractor uses the best data available at the time the cap is calculated to determine the proportional allocation of Ms. Smiths time.  Because the Medicare contractor calculates the cap after allowing time for claims and adjustments to flow through the claims processing system, and assuming Hospice A files its claims without delay, by the time the 2018 cap is calculated the Medicare contractor would have information about Ms. Smiths complete hospice stay.  Therefore, the Medicare contractor is able to correctly count Ms. Smiths stay for the 2018 and 2019 cap determinations, without having to make prior year adjustments to her proportional shares.   90.2. 3  Changing Aggregate Cap Calculation Methods  (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  Hospices are not allowed to switch back and forth between cap calculation methods, as doing so would greatly complicate the cap determination calculation, would be difficult to administer, and could lead to inappropriate switching by hospices seeking merely to maximize Medicare payments.  Additionally, in the year of a change in the calculation method or when a previous cap determination cannot be re -opened, there is a potential for over-counting some beneficiaries.  Allowing hospices to switch back and fort h between methods would perpetuate the risk of over -counting beneficiaries.  Therefore:   1) Hospices that have their cap determination calculated using the proportional method for any cap year prior to the 2012 cap year will continue to have their cap calculated using the proportional method for the 2012 cap year and all subsequent cap years; and,  2) All other hospices would have their cap determinations for the 2012 cap year and all subsequent cap years calculated using the proportional method unless they make a one-time election to have their cap determinations for cap year 2012 and beyond calculated  using the streamlined method.  A/B MACs (HHH) do not reopen cap determinations for the 2011 cap year and prior cap years as a result of a hospice transition from the streamlined to the proportional method for the 2012 cap year.  NOTE : this does not apply to hospices that appealed their cap determination.   3) A hospice would be able to elect the streamlined method no later than 60 days following the receipt of its 2012 cap determination.  4) Hospices which elected to have their cap determination calculated using the streamlined method may later elect to have their cap determinations calculated using the proportional method by either:   a. electing to change to the proportional method (if the election is made prior to receipt of the cap determination associated with the cap year where the change is desired); or   b. appealing a cap determination calculated using the streamlined method to determine the number of Medicare beneficiaries.   5) If a hospice elected the streamlined method, and  changed to the proportional method for a subsequent cap year, the hospices aggregate cap determination for that cap year (i.e., the cap year of the change) and all subsequent cap years would be calculated using the proportional method.  Past cap year det erminations for the 2012 cap year and later cap years are subject to reopening; existing re -opening rules allow reopening for up to 3 years from the date of the cap determination, except in cases of fraud, where reopening is unlimited.  A revised cap deter mination letter issued as a result of reopening may itself be reopened, subject to the 3 year limitation on reopening.   90.2. 4  Other Issues  (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  The computation of  the aggregate cap is  made by the  hospice  after the cap year ends, which now is in alignment with the federal fiscal year.     Hospices can obtain instructions regarding the cap determination method election process from their Medicare contractor.  Regardless of which method is used, the Medicare contractor  shall continue to demand any additional overpayment amounts due to CMS at the time of the hospice cap determination.  Cap determinations are subject to the existing CMS reopening regulations, which allow reopening for up to 3 years from the date of the cap determination letter, except in cases of fraud, where reopening is not li mited.   If a providers covered days of hospice care or Medicare payments are adjusted through an audit or other review, the Medicare contractor  may recalculate the aggregate cap if the amount is material.   90.2. 5  Updates to the Cap Amount  (Rev. 11056; Issued: 10- 21-21; Effective: 10 -01-21; Implementation: 12 -22-21)  The aggregate cap amount was set at $6,500 per beneficiary when first enacted in 1983.  Since 1983, the $6,500 amount has been adjusted annually by the change in the medical care expenditure category of the consumer price index for urban consumers (CPI U, United  States  city average),  published by the  Bureau  of Labor  Statistics, from March 1984 to the fifth month of the cap year, as required by section 1814(i)(2)(B) of the Act.   Section 1814(i)(2)(B)(i) and (ii) of the Act, as added by section 3(b) of the Improving Medicare Post -Acute Care Transformation Act (IMPACT Act) of 2014 (Pub. L. 113185) requires, effective for the 2016 cap year (November 1, 2015 through October 31, 2016) , that the cap amount for the previous year to be updated by the hospice payment update percentage, rather than the original $6,500 being annually adjusted by the change in the CPI U for medical care expenditures since 1984.  This provision would have sunset for cap years ending after September 30, 2025, at which time the annual update to the cap amount would have reverted back to the original methodology.  However, division CC, section 404 of the Consolidated Appropriations Act, 2021 (CAA 2021) has extended the accounting years impacted by the adjustment made to the hospice cap calculation until 2030.  Therefore, for accounting years that end after September 30, 2016 and before October 1, 2030, the hospice cap amount is updated by the hospice payment update percentage rather than using the CPI U.  This provision will sunset for cap years ending after September 30, 2030, at which time the annual update to the cap amount will revert back to the original methodology.  In those  situations  where  a hospice  begins  participation  in Medicare at any time other  than the beginning of  a cap year,  and hence has  an initial cap  calculation  for a  period in  excess  of 12 months, a  weighted  average cap amount  is used.  The  following example illustrates  how  this is accomplished.   EXAMPLE ( Cap amounts utilized in this example are for illustrative purposes only and do not reflect actual cap amounts.)   09/01/18 -  Hospice  A is Medicare certified.   09/01/18 to  10/31/19  -  First  cap period (13  months)  for hospice  A.  Statutory  cap amount for  first Medicare cap  year  (09/01/18 -  09/30/18)  = $28,000.00   Statutory  cap amount for  second  Medicare cap year   (10/01/18 -  09/30/19)  = $28,500.00  Weighted  average cap amount calculation  for hospice  A:  One month (09/01/18  09/30/18)  at $28,000.00 =  $28,000.00  12 months  (10/01/18 -  09/30/19)  at $28,500.00 =  $342,000.00  13 month period $370,000.00 divided by 13 =  $28,461.54 (rounded)   In this example,  $28,461.54 is  the weighted  average cap  amount  used  in the initial cap  calculation  for Hospice  A for the  period September 1,  2018, through September 30, 2019.   NOTE: If  Hospice  A had been  certified  in mid-month, a  weighted  average  cap amount  based  on the  number  of days  falling  within  each  cap period is  used.   90.3  Administrative Appeals  (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  The applicable Medicare contractor shall issue a Cap Determination Letter to notify hospice providers of the results of the Medicare contractors cap calculations and to serve as the providers Notice of Program Reimbursement (NPR).  If there is a cap overpayment, there shall be an accompanying demand for repayment.  As indicated in 42 CFR 418.311, a hospice that believes that its payments have not been properly determined may request a review from the applicable Medicare contractor or the Provider Reimbursement Review Board (PRRB). Each determination of program reimbursement shall inclu de language describing the providers appeal rights.  The above described letter, serving as the provider's determination of program reimbursement, shall include the following language:   This notice is the Medicare contractors final determination for purposes of appeal rights.  If you disagree with this determination, you may file an appeal, in accordance with 42 CFR 418.311 and 42 CFR, part 405, subpart R.  The appeal should be filed wi th either the applicable Medicare contractor or the Provider Reimbursement Review Board (PRRB), depending on the amount in controversy.  Appeal requests must be in writing and be filed within 180 days from the date of this determination.                                        Transmittals Issued for this Chapter  Rev #  Issue Date  Subject  Impl Date  CR#  R12400BP   12/06/2023 Hospice Benefit Policy Manual Updates Related to the Addition of Marriage and Family Therapists (MFTs) or Mental Health Counselors (MHCs) to the Hospice Interdisciplinary Team  01/02/2024  13437  R12385BP