October 14, 2011
Hospice Cap Calculation Methodology Changes
The purpose of this communication is to inform hospice providers of the Hospice Cap Calculation Methodology changes that were published in the Hospice Wage Index for FY 2012 (CMS-1535-F). The changes regarding cap determinations covers 2 time periods and are effective as of October 1, 2011.
Cap determinations for cap years ending on or before October 31, 2011
Providers that have not challenged the current (streamlined) methodology used for determining the number of beneficiaries will continue to have their cap’s calculated using the streamlined methodology for cap years ending on or before October 31, 2011. Providers do have the option to elect to have all open cap determinations for this period and all subsequent cap years, calculated using the new patient-by-patient proportional methodology. To elect this option, providers will need to send us a letter stating that they would like to switch to the new methodology. The election must occur after October 1, 2011, but before receipt of the 2011 (or prior) cap year determination.
Hospices that have challenged how beneficiaries are counted and have had their cap determination calculated using the new patient-by-patient proportional methodology for any cap year prior to the 2012 cap year, will continue to have their cap calculated using new methodology for that cap year and all subsequent cap years. Please note that once you switch to the new methodology, your cap determinations going forward will be calculated using the new method and you cannot switch back to the streamlined method.
Cap determinations for cap years ending on or after October 31, 2012
All providers will be switched to the new methodology for all cap years ending on or after October 31, 2012, with the exception of those who elect to have their cap determinations completed using the streamlined method.
CMS has established a grandfathering proposal, which allows hospices the option to continue using the streamlined methodology. This option will only apply to those that have, or will have, had their caps calculated using the streamlined methodology for cap years prior to 2012 and does not apply to hospices that have already switched to the new methodology prior to the 2012 cap year or all new hospice providers certified October 1, 2011, or after. To elect this option, providers will need to send us a letter stating that they wish to continue to have their caps calculated using the streamlined methodology. The election can be made at any time between October 1, 2011, and up to 60 days after receipt of your 2012 cap determination.
Providers that continue to have their caps calculated using the streamlined method can later elect to switch to the patient-by-patient proportional method. To elect this change in methodologies, providers may submit a written request, prior to receipt of that cap years determination, or by appealing a cap determination calculated using the streamlined methodology.
Providers that would like to elect to stay on the streamlined method or to change to the patient-by-patient proportional method, please send your letter to the address below :
J15 — Part B Correspondence
CGS Administrators, LLC
PO Box 20018
Nashville, TN 37202
Below is a description of how each methodology works.
Under the current methodology for beneficiaries that have only been in one hospice, they will be counted as 1 in their initial year of election. When counting beneficiaries we only count those beneficiaries that have filed their initial notice of election for the dates of September 28 to September 27 of that given cap year and they cannot not be counted more than once or in another cap year.
Changes have been made to counting a beneficiary that has been served by more than one hospice. The calculation of counting days will be made across all cap years and not just the initial year of election. When counting beneficiaries the dates will be the same as the patient-by-patient proportional methodology, which is the cap year dates of November 1 to October 31. Therefore, the only difference between methodologies is when a beneficiary receives care from one hospice.
Patient-by-Patient Proportional Methodology
Under this methodology, for a beneficiary that has only been served by one hospice and survives into another cap year(s), they will be counted proportional across all cap years they were with that hospice. When counting beneficiaries we will use the cap year dates of November 1 to October 31. The total count of these beneficiaries will total one. In performing the calculation, we will determine the total number of valid day’s beneficiary has. We then will determine how many days beneficiary has for each cap year and divide this amount by total number of days to get proportional amount for each cap period.
For beneficiaries that have been served by more than one hospice the calculation will be the same as above and will use total days of care in all hospices.
If a provider uses this new methodology and previously had used streamlined method, we could make adjustments to prior year determinations to prevent over-counting of beneficiaries, subject to existing reopening regulations, which is 3 years from letter date or date final cap determination was made. Please note that each cap year has its own 3 year reopening date.
If you have any questions regarding the above information, please contact Tom Bisbee at (515) 471-7478.