CMS Pub. 100-04, ch. 4, § 10.7.2.1

Reconciliation

(Rev. 2111, Issued: 12-03-10, Effective: 04-01-11, Implementation: 04-04-11)

A. General

Under §419.43(d)(6)(i), for hospital outpatient services furnished during cost reporting

periods beginning on or after January 1, 2009, OPPS high cost outlier payments may be

reconciled upon cost report settlement to account for differences between the overall

ancillary CCR used to pay the claim at its original submission by the provider, and the

CCR determined at final settlement of the cost reporting period during which the service

was furnished. Hospitals and CMHCs that Medicare contractors identify using the

criteria listed below are subject to the OPPS outlier reconciliation policies described in

this section. OPPS outlier payments are reconciled if the CMS Central Office and

Regional Office confirm that reconciliation is appropriate. Services with an APC

payment paid at charges adjusted to cost are not subject to reconciliation policies.

Subject to the approval of the CMS Central Office and Regional Office, a hospital’s

outpatient outlier claims are reconciled at the time of cost report final settlement if they

meet the following criteria:

1. The actual overall ancillary CCR is found to be plus or minus 10 percentage

points or more from the CCR used during that time period to make OPPS outlier

payments, and

2. Total OPPS outlier payments in that cost reporting period exceed $500,000.

Subject to the approval of the CMS Central Office and Regional Office, a CMHC’s

outlier claims are reconciled at the time of cost report final settlement if they meet the

following criteria:

1. The actual overall CCR is found to be plus or minus 10 percentage points or more

from the CCR used during that time period to make OPPS outlier payments, and

2. Any CMHC OPPS outlier payments are made in that cost reporting period.

To determine if a hospital or CMHC meets the criteria above, the Medicare contractor

shall incorporate all the adjustments from the cost report, run the cost report, calculate the

revised CCR, and compute the actual overall ancillary CCR prior to issuing a Notice of

Program Reimbursement (NPR). If the criteria for OPPS outlier reconciliation are not

met, the cost report shall be finalized. If the criteria for reconciliation are met, Medicare

contractors shall follow the instructions below in §10.7.2.4 of this chapter. The NPR

cannot be issued nor can the cost report be finalized until OPPS outlier reconciliation is

complete. These hospital and CMHC cost reports will remain open until their claims

have been processed for OPPS outlier reconciliation.

As stated above, if a cost report is reopened after final settlement and as a result of this

reopening there is a change to the CCR (which could trigger or affect OPPS outlier

reconciliation and outlier payments), Medicare contractors shall notify the CMS Central

and Regional Offices for further instructions. Notification to the CMS Central Office

shall be sent to the address and email address provided in §10.11.3.1.

Any cost report that has been final settled that meets the qualifications for OPPS outlier

reconciliation shall be reopened. Medicare contractors shall notify the CMS Central

Office and Regional Office that the OPPS outlier payments need to be reconciled, using

the procedures included in §10.7.2.4. After CMS’ approval of the reconciliation, the

Medicare contractor shall issue a reporting notice to the provider.

B. Hospitals and CMHCs Already Flagged for Outlier Reconciliation

Medicare contractors shall have until April 25, 2011 to submit via email to

outliersopps@cms.hhs.gov a list of providers that were flagged for outlier reconciliation

prior to April 1, 2011 (NOTE: Do not send this list prior to April 1, 2011 as this list shall

include all providers flagged for outlier reconciliation prior to April 1, 2011). In this list,

Medicare contractors shall include the provider number, provider name, cost reporting

begin date, cost reporting end date, status of cost report (was the Notice of Program

Reimbursement (NPR) issued), date of NPR, total outlier payments in the cost reporting

period, the CCR or weighted CCR from the time the claims were paid during the cost

reporting period being reconciled and the final settled CCR. The CMS Central Office will

then review this list and grant formal approval via email for Medicare contractors to

reprice and reconcile the claims of those hospitals with open cost reports. Upon receiving

approval for reconciliation from the CMS Central Office, Medicare contractors shall

follow the procedures in §10.7.2.4 and complete the reconciliation process by October 1,

2011. If a Medicare contractor cannot complete the reconciliation process by October 1,

2011, the Medicare contractor shall contact the CMS Central Office for further guidance.

NOTE: Those Medicare contractors that do not have any providers flagged for outlier

reconciliation prior to April 1, 2011 shall also send an email to the address above

indicating that they have no providers flagged for outlier reconciliation prior to April 1,

2011.