(Medicare Claims Processing Manual)

The following formula shall be 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 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.   EXAMPLE C:  Cost reporting period:  01/01/2010 - 12/31/2010  Midpoint of cost reporting period:  07/01/2010  Date of reconciliation:  12/31/2010  Number of days from midpoint until date of reconciliation:  547  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 IPF 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 IPF outlier payout greater than $500,000, the criteria have been met to trigger reconciliation. The Medicare contractor follows the procedures in 190.7.2.4.  The reprocessing of claims indicates the revised IPF hospital 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.   190.7.2.5 - Procedures for Medicare Contractors to Perform and Record Outlier Reconciliation Adjustments  (Rev.  2111, Issued: 12- 03-10, Effective: 04 -01-11, Implementation: 04- 04-11)   The following is a step- by-step explanation of the procedures that Medicare contractors are to follow if an IPF is eligible for outlier reconciliation:   1) The Medicare contractor shall send notification to the CMS Central Office (not the hospital), via the street address and email address provided in 190.7.2.2 (B), and CMS Regional Office that a hospital has met the criteria for reconciliation. Medicare contractors shall include in their notification the provider number, provider name, cost reporting begin date, cost reporting end date, total outlier payments in the cost reporting period, the CCR or weighted average CCR from the time the claims were paid dur ing the cost reporting period eligible for reconciliation and the final settled CCR.   2) If the Medicare contractor receives approval from the CMS Central Office that reconciliation is appropriate, the Medicare contractor shall follow steps 3- 14 below. NOTE : Hospital cost reports will remain open until their claims have been processed for outlier reconciliation.  3) The Medicare contractor shall notify the hospital and copy the CMS Regional Office and Central Office in writing and via email (through the addresses provided in 190.7.2.2 (B) ) that the hospitals outlier claims are to be reconciled.   4) Prior to running claims in the *Lump Sum Utility, Medicare contractors shall update the applicable provider record in the Provider Specific File (PSF) by entering the final settled CCR from the cost report in the - 25 -Operating Cost to Charge Ratio field. No other elements in the PSF shall be updated for the applicable provider records in the PSF that span the cost reporting period being reconciled aside from the CCR.   *NOTE : The FISS Lump Sum Utility is a Medicare contractor tool that, depending on the elements that are input, will produce an extract that will calculate the difference between the original PPS payment amounts and revised PPS payment amounts into a Microsoft A ccess generated report. The Lump Sum Utility calculates the original and revised payments offline and will not affect the original claim payment amounts as displayed in various CMS systems (such as NCH).   5) Medicare contractors shall ensure that, prior to running claims through the FISS Lump Sum Utility, all pending claims (e.g., appeal adjustments) are finalized for the applicable provider.   6) Medicare contractors shall only run claims in the Lump Sum Utility that meet the following criteria:    Type of Bill (TOB) equals 11X   Previous claim is in a paid status (P location) within FISS   Cancel date is blank   7) The Medicare contractor reconciles the claims through the IPF Pricer software and not through any editing or grouping software.   8) Upon completing steps 3 through 7 above, the Medicare contractor shall run the claims through the Lump Sum Utility. The Lump Sum Utility will produce an extract, according to the elements in Table 1 below. NOTE :  The extract must be importable by Microsoft Access or a similar software program (Microsoft Excel).   9) Medicare contractors shall upload the extract into Microsoft Access or a similar software program to generate a report that contains elements in Table 1. Medicare contractors shall ensure this report is retained with the cost report settlement work papers.   10) For hospitals paid under the IPF PPS, the Lump Sum Utility will calculate the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17). If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility) is positive, then a credit amount (addition) shall be issued to the provider. If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility)  is negative , then a debit amount (deduc tion) shall be issued to the provider.   11) Medicare contractors shall determine the applicable time value of money amount by using the calculation methodology in 190.7.2.4. If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility) is a negative amount then the time value of money is also a negative amount. If the difference between the original and revised outlier amount (calculated by the Lump Sum Utility) is a positive amount then the time value of money is also a positive amount.  Similar to step 10, i f the time value of money is positive, then a credit amount (addition) shall be issued to the provider. If the time value of money is negative, then a debit amount (deduction) shall be issued to the provider. NOTE : The time value of money is applied to the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17).  12) For cost reporting periods beginning before May 1, 2010, under cost report 2552-96, the Medicare contractor shall record the original outlier amount from Worksheet E -3, Part 1 line 1.09, the outlier reconciliation adjustment amount ( the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17) calculated by Lump Sum Utility) , the total time value of money and the rate used to calculate the time value of money on lines 50-53, of Worksheet E-3, Part 1 of the cost report ( NOTE : the amounts recorded on lines 50, 51 and 53 can be positive or negative amounts per the instructions above). The total outlier reconciliation amount ( the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17) calculated by the Lump Sum Utility plus the time value of money ) shall be recorded on line 15.99 of Worksheet E-3, Part 1. For complete instructions on how to fill out these lines please see  3633.1 of the Provider Reimbursement Manual, Part II.   For cost reporting periods beginning on or after May 1, 2010, under cost report 2552-10, the Medicare contractor shall record the original outlier amount from Worksheet E -3, Part II line 2, the outlier reconciliation adjustment amount ( the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17) calculated by the Lump Sum Utility ), the total time value of money and the rate used to calculate the time value of money on lines 50-53, of Worksheet E- 3, Part II o f the cost report ( NOTE : the amounts recorded on lines 50, 51 and 53 can be positive or negative amounts per the instructions above). The total outlier reconciliation amount ( the difference between the original outlier amount (value code 17) and the revised outlier amount (value code 17) calculated by the Lump Sum Utility plus the time value of money ) shall be recorded on line 29 of Worksheet E-3, Part II.   13) The Medicare contractor shall finalize the cost report, issue a NPR and make the necessary adjustment from or to the provider.  14) After determining the total outlier reconciliation amount and issuing a NPR, Medicare contractors shall restore the CCR(s) to their original values (that is, the CCRs used to pay the claims) in the applicable provider records in the PSF to ensure an accurate history is maintained. Specifically, for hospitals paid under the IPF PPS, Medicare contractors shall enter the original CCR in PSF field 25 -Operating Cost to Charge Ratio.  Medicare contractors shall contact the CMS Central Office via the address and email address provided in 190.7.2.2 (B) with any questions regarding this process.  Table 1:  Data Elements for FISS Extract   List of Data Elements for FISS Extract  Provider #  Health Insurance Claim (HIC) Number  List of Data Elements for FISS Extract  Document Control Number (DCN)  Type of Bill  Original Paid Date  Statement From Date  Statement To Date  Original Reimbursement Amount (claims page 10)  Revised Reimbursement Amount (claim page 10)  Difference between these amounts  Original Deductible Amount, Payer A, B, C (Value Code A1, B1, C1)  Revised Deductible Amount, Payer A, B, C (Value Code A1, B1, C1)  Difference between these amounts  Original Coinsurance Amount, Payer A, B, C (Value Code A2, B2, C2)  Revised Coinsurance Amount, Payer A, B, C (Value Code A2, B2, C2)  Difference between these amounts  Original Outlier Amount (Value Code 17)  Revised Outlier Amount (Value Code 17)  Difference between these amounts  Original DSH Amount (Value Code 18)  Revised DSH Amount (Value Code 18)  Difference between these amounts  Original IME Amount (Value Code 19)  Revised IME Amount (Value Code 19)  Difference between these amounts  Original New Tech Add -on (Value Code 77)  Revised New Tech Add -on (Value Code 77)  Difference between these amounts  Original Device Reductions (Value Code D4)  Revised Device Reductions (Value Code D4)  Difference between these amounts  Original Hospital Portion (claim page 14)  Revised Hospital Portion (claim page 14)  Difference between these amounts  Original Federal Portion  (claim page 14)  Revised Federal Portion  (claim page 14)  Difference between these amounts  Original C TOT PAY (claim page 14) Revised C TOT PAY (claim page 14)  Difference between these amounts  Original C FSP (claim page 14)  Revised C FSP (claim page 14)  Difference between these amounts  Original C OUTLIER (claim page 14)  Revised C OUTLIER (claim page 14)  Difference between these amounts  Original C DSH ADJ (claim page 14)  Revised C DSH ADJ (claim page 14)  List of Data Elements for FISS Extract  Difference between these amounts  Original C IME ADJ (claim page 14)  Revised C IME ADJ (claim page 14)  Difference between these amounts  Original Pricer Amount  Revised Pricer Amount  Difference between these amounts  Original PPS Payment (claim page 14)  Revised PPS Payment (claim page 14)  Difference between these amounts  Original PPS Return Code (claim page 14)  Revised PPS Return Code (claim page 14)  DRG  MSP Indicator (Value Codes 12 -16 & 41 -43 - indicator indicating the claim is MSP; Y = MSP, blank = no MSP  Reason Code  HMO -IME Indicator  Filler   190.7.3 - Electroconvulsive Therapy (ECT) Payment  (Rev. 3575, Issued: 08- 01-16, Effective: 10-01- 16; Implementation: 10 -03-16)