(Medicare Claims Processing Manual)

10.11.1 - Requirement to Calculate CCRs for Hospitals Paid under OPPS and for CMHCs  (Rev. 2296, Issued: 09- 02-11, Effective: 10 -01-11, Implementation: 10- 03-11)  Medicare contractors must calculate overall cost -to-charge ratios for hospitals paid under OPPS and for CMHCs using the providers most recent full year cost reporting period, whether tentatively settled or final settled, in accordance with the instruction s in 10.11.7, 10.11.7.1, 10.11.8, 10.11.8.1 or 10.11.9 as applicable. The contractor must calculate a provider overall CCR whenever a more recent full year cost report becomes available. If a CCR is calculated based on the tentatively settled cost report , the contractor must calculate another overall CCR when the cost report is final or when a cost report for a subsequent cost reporting period is tentatively settled, whichever occurs first. If a CCR is based on a final settled cost report, the contractor must calculate the CCR when a cost report for a subsequent cost reporting period is tentatively settled.  10.11.2 - Circumstances in Which CCRs are Used  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  The contractors must apply CCRs prospectively to calculate outlier payments (for hospitals paid under OPPS and CMHCs), Transitional Outpatient Payment System (TOPS) payments (for hospitals paid under OPPS), device pass -through payments (for hospitals paid under OPPS), and items and services paid at charges adjusted to cost (for hospitals paid under OPPS).   10.11.3 - Selection of the CCR to be Used  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01 -05-09)  Contractors will use the CCR calculated for the most recent period of time, whether based on a tentatively settled cost report or a final settled cost report.  For example, if the CCR being used is the tentatively settled CCR for FY 2008, and a tentatively settled CCR for FY 2009 is determined before the final settled CCR for FY 2008, then the contractor uses the CCR based on the tentatively settled 2009 cost report.   10.11.3.1 - CMS Specification of Alternative CCR (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  Effective January 1, 2009, the central office may direct Medicare contractors to use an alternative CCR if CMS believes this will result in a more accurate CCR.  Also, if the Medicare contractor finds evidence that indicates that using data from the latest  settled or tentatively settled cost report would not result in the most accurate CCR, then the Medicare contractor shall notify the CMS central office and CMS regional office to seek approval to use a CCR -based on alternative data.  For example, CCRs may be revised more often if a change in a hospital or CMHCs operations occurs which materially affects a hospital or CMHCs costs and charges.  The central and regional offices must approve the Medicare contractors request before the Medicare contractor may  use a CCR- based on alternative data.  Revised CCRs are applied prospectively to all OPPS claims processed after the update.  Medicare contractors shall send notification to the central office via the following address and e -mail address:   CMS  C/O Division of Outpatient Care -  OPPS Outlier Team  7500 Security Blvd.  Mail Stop C4 -05-17 Baltimore, MD 21244 outliersopps@cms.hhs.gov  10.11.3.2 - Hospital or CMHC Request for Use of a Different CCR  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  Effective January 1, 2009, CMS (or the Medicare contractor) may specify an alternative CCR if it believes that the CCR being applied is inaccurate.  In addition, a hospital or CMHC has the opportunity to request that a different CCR be applied for outlier payment calculation in the event it believes the CCR being applied is inaccurate.  The hospital or CMHC is required to present substantial evidence supporting its request.  Such evidence should include documentation regarding its costs and charges that demonstrate  its claim that an alternative ratio is more accurate.  After the Medicare contractor has evaluated the evidence presented by the hospital or CMHC, the Medicare contractor notifies the CMS central office and CMS regional office of any such request.  The CM S central and regional offices approve or deny any request by the hospital (or CMHC) or Medicare contractor for use of a different CCR.  Medicare contractors shall send requests to the CMS central office using the address and e -mail address provided above.   10.11.3.3 - Notification to Hospitals Paid Under the OPPS of a Change in the CCR  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  The Medicare contractor shall notify a hospital or CMHC whenever it makes a change to its CCR.  When a CCR is changed as a result of a tentative settlement or a final settlement of the cost report, the change to the CCR can be included in the notice that i s issued to each provider after a tentative or final settlement is completed.  Medicare contractors can also issue separate notification to a hospital about a change to its CCR(s).   10.11.4 - Use of CCRs in Mergers, Acquisitions, Other Ownership Changes, or Errors Related to CCRs  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  The contractors use the CCR for the surviving provider in cases of provider merger, acquisition or other such changes.   Effective for hospitals experiencing a change of ownership after January 1, 2007, that have not accepted assignment of an existing hospital's provider agreement in accordance with 42 CFR 489.18, and do not yet have a Medicare cost report, the contractor may use the default S tatewide CCR to determine cost -based payments until the hospital has submitted its first Medicare cost report.  See 10.11.10 for the location of the Statewide CCRs and the upper limit above which the contractor must use the Statewide CC R.  For purposes of identifying a CCR for payment, Medicare contractors may apply a Statewide average to hospitals receiving a new provider number, such as hospitals converting from non-IPPS to IPPS status.  Also, for purposes of identifying a CCR for paym ent, hospitals receiving a new provider number may request use of a different CCR based on substantial evidence.  Use of an alternative CCR is subject to the approval of the CMS central and regional offices as discussed in 10.11.3.2.  For hospitals experi encing a change of ownership prior to January 1, 2007, the contractor should use the prior hospital's CCR.   In instances where errors related to CCRs and/or outlier payments are discovered, the Medicare contractor shall contact the CMS central office to seek further guidance.  Medicare contractors may contact the CMS central office via the address and e- mail address listed in 10.11.3.1 of this chapter.   If a cost report is reopened after final settlement and as a result of this reopening, there is a change to the CCR, Medicare contractors should contact the CMS regional and central office for further instructions.  Medicare contractors may contact the CMS  central office via the address and email address listed in 10.11.3.1.  10.11.5 - New Providers and Providers with Cost Report Periods Less Than a Full Year  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  The contractors must calculate a hospital CCR using the most recent full -year cost report if a hospital or CMHC has a short period cost report.  The contractors must use the Statewide CCR for all inclusive rate hospitals paid under OPPS, or when a new provider does not have a full years cost report and has no cost report history.   See 10.11.10 for the location of the Statewide CCRs.   10.11.6 - Substitution of Statewide CCRs for Extreme OPPS Hospital Specific CCRs  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  The contractors must use the applicable Statewide average urban or rural hospital default ratio if the CCR calculated for a hospital paid under OPPS is greater than the upper limit CCR in the file of overall OPPS hospital CCR limits on the CMS Web site.   In addition to the circumstances listed in 10.11.6, 10.11.5, and 10.11.4 of this chapter, a Medicare contractor also should use a Statewide average CCR if it is unable to determine an accurate overall ancillary CCR for a hospital for whom accurate data w ith which to calculate an operating CCR is not available.  Further, the policies of 10.11.3.1 and 10.11.3.2 can be applied as an alternative to the Statewide average.   See 10.11.10 for the location of the Statewide CCRs and the upper limit above which the contractor must use the Statewide CCR.   10.11.7 - Methodology for Calculation of Hospital Overall CCR for Hospitals That Do Not Have Nursing and Paramedical Education Programs for Cost Reporting Periods Beginning Before  May 1, 2010, Under Cost Report Form 2552- 96 (Rev. 2296, Issued: 09- 02-11, Effective: 10 -01-11, Implementation: 10- 03-11)  10.11.7.1 - Methodology for Calculation of Hospital Overall CCR for Hospitals That Do Not Have Nursing and Paramedical Education Programs for Cost Reporting Periods Beginning On or After May 1, 2010, Under Cost Report 2552 -10 (Rev. 2296, Issued: 09- 02-11, Effective: 10 -01-11, Implementation: 10- 03-11)  In calculating the hospitals costs or charges, do not include departmental CCRs and charges for services that are not paid under the OPPS such as physical, occupational and speech language therapies, clinical diagnostic laboratory services, ambulance, rur al health clinic services, non -implantable DME, etc. See 10.11.10 for the location of the list of exact cost centers that shall be included in the calculation of the overall CCR.   Step 1 -  Determining Overall Costs:   Calculate costs for each cost center by multiplying the departmental CCR for each cost center (and subscripts thereof) that reflect services subject to the OPPS from Form CMS 2552- 10, Worksheet C, Part I, Column 9 by the Medicare outpatient charges for tha t cost center (and subscripts thereof) from Worksheet D, Part V, Columns 2, 3, and 4,. Sum the costs calculated for each cost center to arrive at Medicare outpatient cost of services subject to OPPS.   Step 2 -  Determining Overall Charges: Calculate charges by summing the Medicare outpatient charges from Form CMS 2552- 10, Worksheet D, Part V, Columns 2, 3, and 4, (and for each cost center (and subscripts thereof) that reflect services subject to the OPPS.   Step 3 -  Calculating the Overall CCR: Divide the costs from Step 1 by the charges from Step 2 to calculate the hospitals Medicare outpatient CCR.   10.11.8 - Methodology for Calculation of Hospital Overall CCR for Hospitals That Have Nursing and Paramedical Education Programs for Cost Reporting Periods Beginning Before May 1, 2010, Under Cost Report Form 2552 -96 (Rev. 2296, Issued: 09- 02-11, Effective: 10 -01-11, Implementation: 10- 03-11)  10.11.8.1 - Methodology for Calculation of Hospital Overall CCR for Hospitals That Have Nursing and Paramedical Education Programs for Cost Reporting Periods Beginning On or After May 1, 2010, Under Cost Report 2552-10 (Rev. 2296, Issued: 09- 02-11, Effective: 10 -01-11, Implementation: 10- 03-11)