(Medicare Claims Processing Manual)

70.1 - Transitional Outpatient Payments (TOPs) for CY 2000 and CY 2001  (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided between August 1, 2000, and December 31, 2001.   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 r atio 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 9.  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 of step 2 by the result of step 1, skip step 4 and perform step 5, 6, 7, or 8 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- 8.  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 .8 and pay .85 times this amount.   Step 6 -  If the result of step 3 is equal to or greater than .8 but less than .9, subtract .7 times the result of step 2 from .71 times the result of step 1, and pay .85 times this amount.  Step 7 -  If the result of step 3 is equal to or greater than .7 but less than .8, subtract .6 times the result of step 2 from .63 times the result of step 1, and pay .85 times this amount.  Step 8 -  If the result of step 3 is less than .7, multiply the result of step 1 by .21 and pay .85 times this amount.  Step 9 -  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.  70.2 - Transitional Outpatient Payments (TOPs) for CY 2002 (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  For services provided during calendar years 2002, TOPs were gradually reduced for all providers except those hospitals that receive hold harmless TOPs (cancer hospitals, childrens hospitals, and rural hospitals having 100 or fewer beds).  To avoid TOP overpayments, contractors were instructed to revise t he monthly interim TOP calculations to reflect the new calculation.   Monthly TOPs calculations that contractors are required to calculate are described below.  This calculation is effective for services provided between January 1, 2002, and December 31, 2002.   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 8.  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 of step 2 by the result of step 1, skip step 4 and perform steps 5, 6, or 7 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- 7.  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 .7 and pay .85 times this amount.   Step 6 -  If the result of step 3 is equal to or greater than  .8 but less than .9, subtract .6 times the result of step 2 from .61 times the result of step 1, and pay .85 times this amount.  Step 7 -  If the result of step 3 is less than .8, multiply the result of step 1 by .13 and pay .85 times this amount.  Step 8 -  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.  70.3 - Transitional Outpatient Payments (TOPs) for CY 2003 (Rev. 1657, Issued: 12- 31-08, Effective: 01 -01-09, Implementation: 01- 05-09)  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 beds).  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 effective 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 r atio 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 of 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 discontinued 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, interim 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 com munity 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 c ost 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 r atio 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 du ring 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.  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.