CMS Pub. 100-02, ch. 9, § 90.2.2

Each hospice's cap amount is calculated by multiplying the adjusted cap amount by the

number of Medicare beneficiaries who elected to receive hospice care from that hospice

during the cap period.

The two methods for counting beneficiaries are the streamlined method and the

proportional method, and are explained below.

Proportional Method: Under the proportional method, each hospice shall include in its

number of Medicare beneficiaries only that fraction which represents the portion of a

patient’s total days of care in all hospices and all years that was spent in that hospice in

that cap year, using the best data available at the time of the calculation (subject to

revision at a later time based on updated data). The whole and fractional shares of

Medicare beneficiaries’ time in a given cap year are then summed to compute the total

number of Medicare beneficiaries served by that hospice in that cap year.

The fractional share for any given beneficiary counted using the proportional method

shall be calculated as follows:

Proportion = Beneficiary’s Hospice Days in Cap Year in a Distinct Hospice /

Beneficiary’s Total Hospice Days for all Years

When a hospice’s cap is calculated using the proportional method, and a beneficiary

included in that calculation survives into another cap year, the Medicare contractor may

need to make adjustments to prior cap determinations. Reopening is allowed for up to 3

years from the date of the cap determination notice, except in the case of fraud, where

reopening is unlimited. A revised cap determination letter issued as a result of a

reopening may itself be reopened, subject to the 3 year limitation on reopening.

Streamlined Method: This method is used by eligible hospices that had their cap

determinations calculated using the streamlined method for all cap years prior to cap year

2012 and elected to have their cap determination for cap years 2012 and beyond

calculated using the streamlined method. The method that these hospices must use is

described below.

• When a beneficiary receives care from only one hospice: Each beneficiary is

counted as 1 in the first year of services with that hospice facility and will not be

counted in any following years. The hospice includes in its number of Medicare

beneficiaries those Medicare beneficiaries who have not previously been included

in the calculation of any hospice cap, and who have filed an election to receive

hospice care during the timeframe for counting beneficiaries associated with the

cap year, using the best data available at the time of the calculation.

Once a beneficiary has been included in the calculation of a hospice cap, he or she

may not be included in the cap for that hospice again, even if the number of

covered days in a subsequent cap year exceeds that of the period where the

beneficiary was included (this could occur when the beneficiary has breaks

between periods of election).

• When a beneficiary receives care from more than one Medicare-certified

hospice during a cap year or years: Each Medicare-certified hospice includes

in its number of Medicare beneficiaries only that fraction which represents the

portion of a patient’s total days of care in all Medicare-certified hospices and all

years that was spent in that hospice in that cap year, using the best data available

at the time of the calculation. Cap determinations are subject to

reopening/adjustment to account for updated data. The streamlined method cap

calculation for a Medicare beneficiary who has been in more than one Medicare-certified hospice is identical to the proportional method.

Beneficiary Counting Examples

The following examples are for illustrative purposes only.

As the examples illustrate, if the proportional method is applied for a given year, then

every beneficiary who receives services in that year is counted based on the number of

days of care furnished to the beneficiary in that year, relative to the total days of care for

the beneficiary for all years.

Example 1. (One Hospice).

Jane Smith, a Medicare beneficiary, initially elected hospice care from Hospice A

beginning on June 1, 2018. Her condition improved, and she was discharged from

Hospice A on August 15, 2018, as she was no longer terminally ill. However, in

November 2018 Ms. Smith’s condition worsened; she re-elected hospice at Hospice A on

November 15, 2018, and subsequently died on December 27, 2018.

Streamlined Method: Hospice A would count Ms. Smith as 1 in its 2018 cap year, but

would not count Ms. Smith again in its 2019 cap year. Medicare payments for hospice

care provided would be counted in the cap year in which those services were provided,

regardless of when payments were actually made, using the best data available at the time

of the calculation. Once a beneficiary has been included in the calculation of a hospice

cap, he or she may not be included in the cap for that hospice again.

Proportional Method: Ms. Smith would be counted as follows:

2018 cap year (June 1st – August 15th): 76 days = 76/119 = 0.64

2019 cap year (Nov 15th – Dec 27th): 43 days = 43/119 = 0.36

Total days: 119 days = 1.00

Hospices and Medicare contractors use the best data available at the time the cap is

calculated to determine the proportional allocation of Ms. Smith’s time. Because the

Medicare contractor calculates the cap after allowing time for claims and adjustments to

flow through the claims processing system, and assuming Hospice A files its claims

without delay, by the time the 2018 cap is calculated the Medicare contractor would have

information about Ms. Smith’s complete hospice stay. Therefore, the Medicare

contractor is able to correctly count Ms. Smith’s stay for the 2018 and 2019 cap

determinations, without having to make prior year adjustments to her proportional shares.

Example 2. (Reopening/Adjustment).

Continuing with the proportional method scenario from Example 1 above, had Ms. Smith

lived until August 25, 2019, the hospice and the Medicare contractor would consider the

information available at the time of the cap calculation when determining proportional

shares.

For example, if the hospice calculated the 2018 cap on February 15, 2019, using claims

for dates of service through December 31, 2018, Ms. Smith’s total stay would have been

123 days, and the 2018 proportional share would be 76 / 123 = 0.62.

Cap Accounting with Claims through December 31, 2018:

2018 cap year (June 1st – August 15th): 76 days = 76/123 = 0.62

2019 cap year (Nov 15th – Dec 31st): 47 days = 47/123 = 0.38

Total days: 123 days = 1.00

When calculating the 2019 cap determination using claims for dates of service through

December 31, 2019, the Medicare contractor would be able to re-open the 2018 cap

determination and correct the proportional allocation made in the previous cap year, to

reflect a final allocation of 76/360 = 0.21 for the 2018 cap determination and 284/360 =

0.79 in the 2019 cap determination, reflecting the final date of August 25, 2019.

Cap Accounting with Claims through December 31, 2019:

2018 cap year (June 1st – Aug 15th): 76 days = 76/360 = 0.21

2019 cap year (Nov 15th – Aug 25th): 284 days = 284/360 = 0.79

Total days: 360 days = 1.00

Example 3. (Two Different Hospices).

Jane Smith, a Medicare beneficiary, initially elected hospice care from Hospice A

beginning on June 1, 2018. Her condition improved, and she was discharged from

Hospice A on August 15, 2018, as she was no longer terminally ill. However, in January

2019, Ms. Smith’s condition worsened; she re-elected hospice at Hospice B on January

15, 2019, and subsequently died on February 26, 2019.

Streamlined Method:

The streamlined method cap calculation for a Medicare beneficiary who has been in more

than one Medicare-certified hospice is identical to the proportional method (as described

below). Therefore, Hospice A would count Ms. Smith as a fraction (0.64) in its 2018 cap

year and would not count Ms. Smith again in its 2019 cap year. Hospice B would count

Ms. Smith as a fraction (0.36) in its 2019 cap year and would not count Ms. Smith in its

2018 cap year. Medicare payments for hospice care provided would be counted in the

cap year in which those services were provided, regardless of when payments were

actually made, using the best data available at the time of the calculation.

Proportional Method:

Under the proportional method, Ms. Smith would be counted as follows:

Hospice A:

2018 cap year (June 1st – August 15th): 76 days = 76/119 = 0.64

Hospice B

2019 cap year (Jan 15th - Feb 26th): 43 days = 43/119 = 0.36

Total days: 119 days = 1.00

The Medicare contractor uses the best data available at the time the cap is calculated to

determine the proportional allocation of Ms. Smith’s time. Because the Medicare

contractor calculates the cap after allowing time for claims and adjustments to flow

through the claims processing system, and assuming Hospice A files its claims without

delay, by the time the 2018 cap is calculated the Medicare contractor would have

information about Ms. Smith’s complete hospice stay. Therefore, the Medicare

contractor is able to correctly count Ms. Smith’s stay for the 2018 and 2019 cap

determinations, without having to make prior year adjustments to her proportional shares.