(Medicare Benefit Policy Manual)

$4,000,000 x 0.80 = $3,200,000 = payments for allowable inpatient care days.  Excess inpatient days = (10,000 actual days)  (8,000 allowable days) = 2,000.  Multiply  the excess  inpatient  care days  by the  routine  home  care rate of $192.78, wage adjusted for a hospice located in Redding, California, using the FY 2018 Wage Index value of 1.4968, leading to a wage -adjusted rate of $288.55:   2,000 x $288.55= $577,100= allowable payments for the excess inpatient care days.  Add the allowable inpatient payments and the allowable payments for excess days to derive the inpatient cap: $3,200,000 +  $577,100= $3,777,100= inpatient cap.   Compare  $3,777,100 inpatient  cap with  $4,000,000 actually  paid  for inpatient revenue  codes.   The hospice  must  refund $4,000,000 - $3,777,100=  $222,900  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 inpatient cap if the amount is material.   90.2  Aggregate Cap on Overall Reimbursement to Medicare -certified Hospices  (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  Overall  aggregate Medicare payments  made to  a Medicare- certified  hospice  are subject  to an aggregate cap for each cap year.  The aggregate cap is  calculated  by multiplying  a Medicare beneficiary count during the period by a statutory cap amount.  The cap amount is adjusted annually.  The Medicare beneficiary count is determined using either the proportional method or the streamlined method, as described in section 90.2.2 below.    The total actual Medicare payments made for services furnished to Medicare beneficiaries during the cap year are compared to the aggregate cap for this period.   Total actual Medicare payments made for services furnished to Medicare beneficiaries during the cap yea r refers to Medicare payments for services rendered during the cap year, regardless of when payment is actually made.  Any actual Medicare payments in excess of the aggregate cap must be refunded by the hospice.   All Medicare -certified hospices are subject to the aggregate cap calculation.  When a beneficiary receives hospice care from more than one hospice, only the care provided by the Medicare- certified hospice(s) is considered when computing the aggregate cap.   90.2. 1  New Hospices (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  The hospice  aggregate cap  is calculated  in a different  manner  for new  hospices  entering the Medicare program  if the hospice  has not participated  in the program  for an entire  cap year.   In this situation,  the initial cap  calculations  for newly  certified  hospices  must  cover  a period of  at least  12 months  but less than  24 months.    Hospices and Medicare contractors shall use the proportional method when calculating the aggregate cap for all hospices which are Medicare -certified on or after October 1, 2011 (as described in Section 90.2.2 below).  90.2. 2  Counting Beneficiaries for Calculation  (Rev. 246, Issued: 09- 14-18, Effective: 12 -17- 18, Implementation: 12- 17-18)  Each hospice's cap amount is calculated by multiplying the adjusted cap amount by the number of Medicare beneficiaries who elected to receive hospice care from that hospice during the cap period.    The two methods for counting beneficiaries are the streamlined method and the proportional method, and are explained below.   Proportional Method : Under the proportional method, each hospice shall include in its number of Medicare beneficiaries only that fraction which represents the portion of a patients total days of care in all hospices and all years that was spent in that hospice in that cap year, using the best data available at the time of the calculation (subject to revision at a later time based on updated data).  The whole and fractional shares of Medicare beneficiaries time in a given cap year are then summed to comput e the total number of Medicare beneficiaries served by that hospice in that cap year.   The fractional share for any given beneficiary counted using the proportional method shall be calculated as follows:   Proportion = Beneficiarys Hospice Days in Cap Year in a Distinct Hospice / Beneficiarys Total Hospice Days for all Years   When a hospices cap is calculated using the proportional method, and a beneficiary included in that calculation survives into another cap year, the Medicare contractor  may need to make adjustments to prior cap determinations.  Reopening is allowed for up to 3 years from the date of the cap determination notice, except in the case of fraud, where reopening is unlimited.  A revised cap determination letter issued as a res ult of a reopening may itself be reopened, subject to the 3 year limitation on reopening.  Streamlined Method :  This method is used by eligible hospices that had their cap determinations calculated using the streamlined method for all cap years prior to cap year 2012 and elected to have their cap determination for cap years 2012 and beyond calculated using the streamlined method.   The method that these hospices must use is described below.     When a beneficiary receives care from only one hospice:   Each beneficiary is counted as 1 in the first year of services with that hospice facility and will not be counted in any following years.  T he hospice includes in its number of Medicare beneficiaries those Medicare beneficiaries who have not previously been included in the calculation of any hospice cap, and who have filed an election to receive hospice care during the timeframe for counting beneficiaries associated with the cap year, using the best data available at the time of the calculation.   Once a  beneficiary  has been  included in  the calculation  of a hospice  cap, he or she may not be included in  the cap for that  hospice  again, even  if the number  of covered  days  in a subsequent  cap year  exceeds  that of the period where  the beneficiary  was included  (this  could occur  when  the beneficiary  has breaks  between  periods  of election).    When a beneficiary receives care from more than one Medicare- certified hospice during a cap year or years:   Each Medicare -certified hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patients total days of care in all Medicare -certified hospices and all years that was spent in that hospice in that cap  year, using the best data available at the time of the calculation.  Cap determinations are subject to reopening/adjustment to account for updated da ta.  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.   Beneficiary Counting Examples   The following examples are for illustrative purposes only.    As the examples illustrate, if the proportional method is applied for a given year, then every beneficiary who receives services in that year is counted based on the number of days of care furnished to the beneficiary in that year, relative to the total days of care for the beneficiary for all years.   Example 1.  (One Hospice).    Jane Smith, a Medicare beneficiary, initially elected hospice care from Hospice A beginning on June 1, 2018.  Her condition improved, and she was discharged from Hospice A on August 15, 2018, as she was no longer terminally ill.  However, in November 2018 Ms. Smiths condition worsened; she re -elected hospice at Hospice A on November 15, 2018, and subsequently died on December 27, 2018.   Streamlined Method :  Hospice A would count Ms. Smith as 1 in its 2018 cap year, but would not count Ms. Smith again in its 2019 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.  Once  a beneficiary  has been  included  in the calculation  of a hospice  cap, he or she may  not be included in  the cap for that  hospice  again.   Proportional Method: Ms. Smith would be counted as follows:   2018 cap year (June 1st  August 15th):    76 days   =   76/119 =  0.64 2019 cap year (Nov 15th  Dec 27th):    43 days   =   43/119 =  0.36 Total days:      119 days   =     1.00  Hospices and Medicare contractors use 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.   Example 2.  (Reopening/Adjustment).      Continuing with the proportional method scenario from Example 1 above, had Ms. Smith lived until August 25, 2019, the hospice and the Medicare contractor would consider the information available at the time of the cap calculation when determining proportional shares.    For example, if the hospice  calculated the 2018 cap on February 15, 2019, using claims for dates of service through December 31, 2018, Ms. Smiths total stay would have been 123 days, and the 2018 proportional share would be 76 / 123 = 0.62.    Cap Accounting with Claims through December 31, 2018:  2018 cap year (June 1st  August 15th):   76 days   =   76/123 =  0.62 2019 cap year (Nov 15th  Dec 31st):    47 days   =   47/123 =  0.38 Total days:      123 days   =     1.00  When calculating the 2019 cap determination using claims for dates of service through December 31, 2019, the Medicare contractor would be able to re -open the 2018 cap determination and correct the proportional allocation made in the previous cap year, to reflect a final allocation of 76/360 = 0.21 for the 2018 cap determination and 284/360 = 0.79 in the 2019 cap determination, reflecting the final date of August 25, 2019. Cap Accounting with Claims through December 31, 2019:  2018 cap year (June 1st  Aug 15th):    76 days   =   76/360   =  0.21 2019 cap year (Nov 15th  Aug 25th):  284 days   =   284/360 =  0.79 Total days:      360 days   =     1.00  Example 3.  (Two Different Hospices) .    Jane Smith, a Medicare beneficiary, initially elected hospice care from Hospice A beginning on June 1, 2018.  Her condition improved, and she was discharged from Hospice A on August 15, 2018, as she was no longer terminally ill.  However, in January 2019, Ms. Smiths condition worsened; she re -elected hospice at Hospice B on January 15, 2019, and subsequently died on February 26, 2019.  Streamlined Method :    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