(Medicare Claims Processing Manual)

Subject to the approval of the CMS Central Office and Regional Office, a hospitals outpatient outlier claims are reconciled at the time of cost report final settlement if they meet the following criteria:   1. The actual overall ancillary CCR  is found to be plus or minus 10 percentage points or more from the CCR used during that time period to make OPPS outlier payments, and    2. Total OPPS outlier payments in that cost reporting period exceed $500,000.   Subject to the approval of the CMS Central Office and Regional Office, a CMHCs outlier claims are reconciled at the time of cost report final settlement if they meet the following criteria:   1. The actual overall CCR is found to be plus or minus 10 percentage points or more from the CCR used during that time period to make OPPS outlier payments, and   2. Any CMHC OPPS outlier payments are made in that cost reporting period.  To determine if a hospital or CMHC meets the criteria above, the Medicare contractor shall incorporate all the adjustment s from the cost report, run the cost report, calculate the revised CCR, and compute the actual overall ancillary CCR prior to issuing a Notice of Program Reimbursement (NPR).  If the criteria for OPPS outlier reconciliation are not met, the cost report sha ll be finalized.  If the criteria for reconciliation are met, Medicare contractors shall follow the instructions below in 10.7.2.4 of this chapter.  The NPR cannot be issued nor can the cost report be finalized until OPPS outlier reconciliation is complet e.  These hospital and CMHC cost reports will remain open until their claims have been processed for OPPS outlier reconciliation.  As stated above, if a cost report is reopened after final settlement and as a result of this reopening there is a change to t he CCR (which could trigger or affect OPPS outlier reconciliation and outlier payments),  Medicare contractors shall notify the CMS Central and Regional Offices for further instructions.  Notification to the CMS Central Office shall be sent to the address a nd email address provided in 10.11.3.1.  Any cost report that has been final settled that meets the qualifications for OPPS outlier reconciliation shall be reopened. Medicare contractors shall notify the CMS Central Office and Regional Office that the OPP S outlier payments need to be reconciled, using the procedures included in 10.7.2.4.  After CMS approval of the reconciliation, the Medicare contractor shall issue a reporting notice to the provider.  B. Hospitals and CMHCs Already Flagged for Outlier Re conciliation   Medicare contractors shall have until April 25, 2011 to submit via email to outliersopps@cms.hhs.gov a list of providers that were flagged for outlier reconciliation prior to April 1, 2011  ( NOT E: Do not send this list prior to April 1, 2011 as this list shall include all providers flagged for outlier reconciliation prior to April 1, 2011).  In this list, Medicare contractors shall include the provider number, provider name, cost reporting begin date, cost reporting end date, status of cost report (was the Notice of Program Reimbursement (NPR) issued), date of NPR, total outlier payments in the cost reporting period, the CCR or weighted CCR from the time the claims were paid during the cost reporting period being reconciled and the final settled CCR. The CMS Central Office will then review this list and grant formal approval via email for Medicare contractors to reprice and reconcile the claims of those hospitals with open cost reports. Upon receiving approval for reconciliation from the CMS Central Office, Medicare contractors shall follow the procedures in 10.7.2.4 and complete the reconciliation process by October 1, 2011.  If a Medicare contractor cannot complete the reconciliation process by October 1, 2011, the Medicare contractor shall contact the CMS Central Office for further guidance. NOTE : Those Medicare contractors that do not have any providers flagged for outlier reconciliation prior to April 1, 2011 shall also send an email to the address above indicating that they have no providers flagged for outlier reconciliation prior to April 1, 2011.  10.7.2.2 - Reconciling Outlier Payments for Hospitals and CMHCs (Rev. 1760, Issued:  06-23-09; Effective Date:  07-01- 09; Implementation Date:  07-06-09)  For hospital outpatient services furnished during cost reporting periods beginning on or after January 1, 2009, all hospitals and CMHCs are subject to the OPPS outlier reconciliation policies set forth in this section.  If a hospital or CMHC meets the criteria in 10.7.2.1, the Medicare contractors shall notify the central office and regional office at the address and email address provided in 10.11.3.1.  Further instructions for Medicare contractors on reconciliation and the time value of money are provided below in 10.7.2.3 and 10.7.2.4 of this chapter.  The following examples demonstrate how to apply the criteria for reconciliation:   EXAMPLE A:   Cost reporting period:  01/01/2009-12/31/2009  Overall ancillary CCR used to pay original claims submitted during cost reporting period:  0.40  (In this example, this CCR is from the tentatively settled 2007 cost report.)  Final settled overall ancillary 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 of 0.40 used at the time the claim was originally paid changed to 0.50 at the time of final settlement, and the provider received greater than $500,000 in OPPS outlier payments during that cost report ing period, the criteria are met for reconciliation, and therefore, the Medicare contractor  notifies the central office and the regional office.  The providers OPPS outlier payments for this cost reporting period are reconciled using the correct CCR of 0.50.   In the event that multiple overall ancillary CCRs are used in a given cost reporting period to calculate outlier payments, Medicare contractors should calculate a weighted average of the CCRs in that cost reporting period.  Example B below shows how t o weight the CCRs.  The Medicare contractor shall then compare the weighted CCR to the CCR determined at the time of final settlement of the cost reporting period to determine if OPPS outlier reconciliation is required.  Total OPPS outlier payments for the  entire cost reporting period must exceed $500,000 in order to trigger reconciliation.   EXAMPLE B:   Cost reporting period:  01/01/2009- 12/31/2009  Overall ancillary CCR used to pay original claims submitted during cost reporting period:  - 0.40 from 01/01/2009 to 03/31/2009 (This CCR could be from the tentatively settled 2006 cost report.)   - 0.50 from 04/01/2009 to 12/31/2009 (This CCR could be from the tentatively settled 2007 cost report.)   Final settled operating CCR from 01/01/2009 -  12/31/2009 c ost 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 r econciliation 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 via the address and email address provided in 10.11.3.1.  U pon 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, Effec tive: 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 adjustments 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 s ettled 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 a ggregate 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 v alue 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)