Palmetto Issues Guidance on Hospice Cap Self-Calculation

Since 1982, Medicare Part A has included a hospice benefit for terminally ill patients. Currently, qualified patients are entitled to unlimited hospice benefits (provided that a physician certifies eligibility every 60 days). However, reimbursement to providers for hospice care is subject to a “cap,” that is calculated by multiplying a per-beneficiary rate (adjusted annually for inflation) by the “number of Medicare beneficiaries.”

Traditionally, the hospice cap for a given fiscal year has been calculated by the hospice’s fiscal intermediary in the following summer or fall. Based on a recent change to the hospice cap regulations, the 2014 cap year is the first where hospices will be required to self-report hospice cap determinations. The hospice cap must be self-reported and any overpayment must be repaid on or before March 31, 2015. 42 C.F.R. § 418.308(c). The self-reported cap determination must be based on data obtained from the Provider Statistical & Reimbursement Report (PS&R) system, maintained by the Centers for Medicare & Medicaid Services (CMS) no later than three months following the end of the fiscal year, i.e., data pulled no earlier than February 1, 2015.

For any providers who fail to file a self-determined cap determination on or before March 31, 2015, whether or not they have any cap liability, “payments to the hospice will be suspended in whole or in part, until a self-determined cap determination is filed with the Medicare contractor.” 42 C.F.R. § 418.308(c). Therefore, it is critical for hospices to submit their self-determined cap calculations on or before March 31, 2015, even if their hospice payments are less than the applicable cap. If the hospice has received payments exceeding its self-determined cap, it must, on or before March 31, 2015, return those payments, request an Extended Repayment Schedule, or be subject to withholding.

Palmetto GBA, one of CMS’s hospice fiscal intermediaries has published information related to the hospice cap self-determination for providers in its jurisdiction here. The referenced link provides links to a form finalized by CMS for use in computing the self-determined hospice cap and instructions for use of that form. Palmetto further indicates that it mailed to hospices in its jurisdiction (on February 26, 2015) payment and beneficiary count data to each hospice as obtained from the PS&R system, but encourages hospices with access to use more current PS&R data if available. Palmetto indicates that “if unable to file the form timely, a written request can be submitted prior to the due date to request a 50 percent payment suspension.”

The fiscal intermediary will perform and issue a final hospice cap review for the 2014 cap year and will incorporate any self-determined hospice cap overpayment. The CMS form for self-determined hospice cap does not incorporate sequestration adjustments into the hospice cap, but does indicate that “the contractor will make the adjustment for sequestration at the final cap determination.”

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