How Come My Hospice Owes Money Back to Medicare?

Why Does My Hospice Need To Give Back Money To Medicare?

Medicare CAP reports need to be filed yearly for the fiscal period of 10/1 to 9/30. The CAP report is based on information from two PS&R reports, which are pulled from the EIDM system: report 810, which shows net reimbursement for the period, and the beneficiary count summary report. Once the net reimbursement and number of beneficiaries are entered into the CAP report, the report determines if the hospice owes money back to Medicare for the CAP report period.

If a hospice billed legitimate claims which were approved my Medicare, then why owe money back altogether?

Medicare allows billing for all sorts of hospice services but sets a cap at now a little over $31K per patient per year total reimbursement.  This means that you may not be reimbursed more than the CAP amount per patient. The total amount that your hospice is allowed to receive from Medicare for the year is the CAP amount times the number of patients in your hospice for the year. This means that if you billed for services that were very “expensive” compared to the number of patients, even though the services were both allowable and covered by Medicare, you would end up having to give money back.

The way the number of patients is calculated is somewhat complicated.  If you admit a patient who came from a different hospice or went to a different hospice afterwards, you lose a significant “percentage” of that patient.  This may be true even if the patient was in your hospice for a majority of the year.  This means that, in reality, you may have had more patients than the beneficiary count shows, but, regardless, the beneficiary count is the determining factor.  Also, CC and, possibly, GIP patients take much more billing than routine or respite patients.

It is important to note that the CAP report has nothing to do with the cost report and must be filed independently. The cost report will not in any way affect how much money the hospice owes to Medicare due to the CAP report and cannot either increase or decrease that amount. Remember that a hospice will never owe money to Medicare based on the cost report, since the cost report never shows a settlement.

Not all hospices go over the cap.  There are methods for avoiding going over the cap.  If your hospice has found itself with large sums to pay back to Medicare, then it is worthwile to speak with a hospice consultant to avoid this situation in the future. 

Need help preparing your cost report?  At PPS we have over thirty years of cost reporting experience and are happy to share our expertise with you!  Contact us now for cost reporting assistance.

For information or assistance, we are, as always, here to help! Contact Us via emailwebsite, or call 800-447-2540/ 248-968-4100 for our renowned customer service.

Disclaimer:  This blog does not contain legal advice. What it does contain are our best
explanations, advice, and suggestions to help facilities and cost report preparers to understand the cost report forms and reporting process and offer suggestions for their preparation. Progressive Provider Services assumes no legal responsibility for the content of this blog, nor for cost reports or other reports prepared based on the content herein.

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