What are the guidelines for Medicare payments for Outlier payments?
Guidance for outlier payments including background, cost-to-charge ratios, and examples. Section 1886 (d) (5) (A) of the Act provides for Medicare payments to Medicare-participating hospitals in addition to the basic prospective payments for cases incurring extraordinarily high costs.
What is the fixed-loss outlier threshold for Medicare?
Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the costs above the threshold. For Federal fiscal year (FY) 2005, the existing fixed-loss outlier threshold is $25,800. CMS publishes the outlier threshold in the annual Inpatient Prospective Payment System (IPPS) Final Rule.
When do Outlier payments need to be adjusted for time value?
Effective for discharges occurring on or after August 8, 2003, at the time of any reconciliation, outlier payments may be adjusted to account for the time value of any underpayments of overpayments.
How do you determine if a case qualifies for Outlier payments?
The actual determination of whether a case qualifies for outlier payments takes into account both operating and capital costs and DRG payments. That is, the combined operating and capital costs of a case must exceed the fixed loss outlier threshold to qualify for an outlier payment.
When was the outpatient prospective payment system implemented?
August 1, 2000The Balanced Budget Act of 1997 (BBA) mandated that the Centers for Medicare & Medicaid Services (CMS) implement a Medicare prospective payment system for hospital outpatient services. As such, CMS implemented the outpatient prospective payment system (OPPS), which did not become effective until August 1, 2000.
What is a Medicare outlier payment?
Medicare makes supplemental payments to hospitals, known as outlier payments, which are designed to protect hospitals from significant financial losses resulting from patient-care cases that are extraordinarily costly.
Does Medicare pay day outliers?
For day outliers, an additional per diem payment is made for each covered day beyond the day outlier threshold, which is set annually by HCFA. The per diem amount is calculated by dividing the applicable DRG payment amount by the average length-of-stay for the same DRG times the marginal cost of care.
How are Medicare outpatient outliers calculated?
If both the multiplier threshold and the fixed-dollar threshold are met, the outlier payment is calculated as 50% of the amount, by which the hospital's cost of furnishing the APC service or procedure exceeds the multiplier threshold.
What is the fixed dollar threshold for outlier payments for 2021?
Outlier Payments (pp. 166-170): To ensure CY 2021 aggregate outlier payments equal 1.0% of estimated total OPPS payments, CMS finalized a fixed-dollar threshold of $5,300 combined with the multiple-threshold of 1.75 times to Ambulatory Payment Classification (APC) payment rate.
How does a claim qualify for the low side cost outlier payment?
To qualify for outlier payments, a case must have costs above a fixed-loss cost threshold amount (a dollar amount by which the costs of a case must exceed payments inorder to qualify for outliers).
What is day outlier amount?
Day outlier payments are an additional payment made for exceptionally long lengths of stay on services provided to children under six at disproportionate share hospitals and children under age one at non-disproportionate share hospitals.
What is outlier threshold?
Outlier Threshold means a dollar amount by which the total billed charges on the claim must exceed the MS-DRG Allowable Fee in order to qualify for an additional Outlier amount.
What is a cost outlier claim?
by Medical Billing. Definitions. • Cost outlier — an inpatient hospital discharge that is extraordinarily costly. Hospitals may be eligible to receive additional payment for the discharge.
What is an outlier DRG case?
Outlier cases means those DRG cases, including transfer cases, in which the hospital's adjusted operating cost for the case exceeds the hospital's operating outlier threshold for the case.
How is Medicare outpatient reimbursement calculated?
The payments are calculated by multiplying the APCs relative weight by the OPPS conversion factor and then there is a minor adjustment for geographic location. The payment is divided into Medicare's portion and patient co-pay. Co-pays vary between 20 and 40% of the APC payment rate.
Background
Section 1886 (d) (5) (A) of the Act provides for Medicare payments to Medicare-participating hospitals in addition to the basic prospective payments for cases incurring extraordinarily high costs.
Cost-to-Charge Ratios
As explained above, hospital-specific cost-to-charge ratios are applied to the covered charges for a case to determine whether the costs of the case exceed the fixed-loss outlier threshold.
How much was the outlier payment for the DRG in 2002?
A hospital in Texas that received outlier payments of about $37.5 million in FY 2002 equal to more than 180 percent of its 2002 DRG payments, and that will receive outlier payments in 2003 of about $21.2 million, roughly 130 percent of its DRG payments of about $16.2 million.
How much was the outlier rule in 2003?
A hospital in Pennsylvania that received about $14.4 million in outlier payments, or roughly 40 percent of its DRG payments in FY 2002, and that will receive about $26.2 million in outlier payments in 2003, roughly 92 percent of its DRG payments. “The final outlier rule should benefit the great majority of hospitals that bill Medicare fairly ...
How long does it take for CMS to determine the cost of a case?
Because CMS cannot determine the cost of the case until the cost report has been settled – which can take one to three years – CMS applied the hospital’s CCR from the most recent settled cost report from a prior year to the hospital’s current charges.
Does CMS use settled cost report?
Until then, in general, in response to hospital concerns, CMS will continue to use the most recent settled cost report – providing relief to some hospitals that were not chronic abusers of the system. In addition, in order to give hospitals the continued assurance of finality, the rule states that CMS will issue separate instructions ...
Can a hospital change its CCR?
Allowing a hospital to request the fiscal intermediary to change its CCR to adjust its outlier payments, in much the same way that an individual taxpayer can adjust the amount of withholding from income, to avoid over- or underpayments for outlier cases.