CMS Pub. 100-05, ch. 5, § 40.8.8

Coinsurance Amounts

(Rev. 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22)

Where a primary payer pays an amount for Medicare covered services that is equal to or

less than the deductible and coinsurance that would apply if Medicare was the primary

payer, Medicare charges full utilization. Therefore, it calculates coinsurance in the usual

manner.

Where a primary payer pays an amount for Medicare covered services that is more than

the deductible and coinsurance that would apply if Medicare were the primary payer,

Medicare charges utilization only to the extent that it paid for the services.

The MSP payment modules calculate days to be charged to the beneficiary's utilization.

The A/B MAC (Part A) reports the result in the in the appropriate field of the CWF

record as described in CWF documentation. The procedures below describe how

utilization and coinsurance are charged.

If payment by the primary payer for Medicare covered services is less than the provider's

charges for those services and the current Medicare payment amount (without regard to

deductible or coinsurance) and the provider does not accept, and is not obligated to

accept, the primary payer payment as payment in full, the A/B MAC (Part A) follows

the procedures below to determine utilization and coinsurance applicable.

Where the stay involves coinsurance days, the A/B MAC (Part A) determines

utilization chargeable to the beneficiary. It completes coinsurance value codes and

amounts accordingly. No adjustment to covered days is made based on this

determination. The provider completes covered days in the usual manner.

The A/B MAC (Part A) charges utilization as follows:

• It determines the Medicare secondary payment amount in

accordance with §§30.5.1 or 30.5.2 above;

• It divides this amount by the amount that Medicare would have paid as

primary payer. This is the Medicare interim payment for the stay reduced by the

deductible and coinsurance for non-PPS providers or the Medicare payment rate

reduced by deductible and coinsurance for PPS providers; and

• It multiplies this percentage by the number of covered days in the stay or

for PPS providers, the number of payable days in the stay.

The A/B MAC (Part A) does not charge a partial day resulting from this calculation as

a full day if it is less than a half of a day. It charges a full day if it is a half day or more.

For PPS providers, where the number of payable days in the stay exceeds the number of

days for which benefits are available (e.g., benefits are exhausted during the nonoutlier

portion of the stay), the number of utilization days charged may not exceed the actual

days available. If regular benefit days are exhausted during the basic portion of the stay

and lifetime days are used for the outlier portion of the stay, the A/B MAC (Part A)

separately computes the chargeable days for each portion of the stay.

The A/B MAC (Part A) charges coinsurance days as follows:

• If the days resulting from the utilization calculation are fewer than the

full days available for the stay, no coinsurance days are billed; or

• If the days resulting from the utilization calculation are greater than the

full days available for the stay, coinsurance days are billed for the excess days.

Where the provider performs the utilization calculation above, A/B MACs (Part A)

must perform the same calculation to verify that coinsurance Value Codes and

Amounts are completed correctly. The A/B MAC (Part A) advises the provider of any

discrepancies.

EXAMPLE 1: Deductible Involved - PPS (no outlier involved) or Non-PPS Hospital

An individual was hospitalized 15 days for which total charges were $5,000. The primary

payer paid $2,400 for Medicare covered services. No part of the Medicare inpatient

deductible of $764 had been met. The Medicare gross payment amount (without regard to

the deductible or coinsurance) for the services absent the primary payer's payment would

have been $3,600. The Medicare secondary payment is $1,200 ($3,600 - $2,400).

Medicare would have paid $2,836 as primary payer ($3,600 - $764). The A/B MAC (Part

A) calculates the beneficiary's utilization as follows: $1,200 divided by $2,836 = .423 x

15 days = 6.34 or 6 days, when rounded.

EXAMPLE 2: Coinsurance Involved - PPS (no outlier involved) or Non-PPS

Hospital

An individual was hospitalized for 20 days (all of which are lifetime reserve days) for

which total charges were $20,000. The primary payer paid $13,000 for Medicare

covered services. The applicable coinsurance amount was $ 7,640. The current Medicare

interim payment amount (without regard to the deductible or coinsurance) for the

services, absent the primary payer's payment, would have been $17,000. The Medicare

secondary payment amount is $4,000 (the Medicare gross payment amount of $17,000

minus the primary payer's payment of $13,000). Medicare would have paid $9,360 as

primary payer ($17,000 - $7,640). The A/B MAC (Part A) calculates the beneficiary's

utilization as follows: $4,000 divided by $ $9,360 = .427 x 20 days = 8.5 or 9 days when

rounded. If the primary payer's payment in this example had been $7,640 or less, full

utilization would have been charged. The beneficiary would have been charged with 20

days utilization.

EXAMPLE 3: Primary Payer Pays for Specified Number of Days - PPS (no outlier

involved) or Non-PPS Hospital

The A/B MAC (Part A) uses this formula even when the primary payer pays for only a

specified number of days of a stay because of a payment limitation under the plan based

upon the number of benefit days available. For example, a provider furnished 20 days of

inpatient care. The primary payer paid all of the charges for the first 10 days. These

charges were $4,500. No part of the Medicare inpatient deductible of $764 had been met.

The current Medicare gross payment amount (without regard to the deductible or

coinsurance) that Medicare would have paid for the 20-day stay, absent primary payer

coverage, was $7,000. The Medicare secondary payment is $2,500 ($7,000 - $4,500).

Medicare would have paid $ 6,236 as primary payer ($7,000 - $764). The A/B MAC

(Part A) calculates the utilization charged to the beneficiary as follows: $2,500 divided

by $6,236 = .400 X 20 days = 8.01 days or 8, days when rounded.

EXAMPLE 4: Coinsurance Involved - PPS (no outlier involved) or Non-PPS

Hospital

A beneficiary has 17 full days available at admission. The inpatient stay was 20 days.

The provider bills 20 days in Covered Days (form locator 7 of the Form CMS-1450) as if

there were no other payer involved. After performing the calculation to determine

utilization chargeable, it is determined that the beneficiary can be charged with 10 days.

Therefore, no coinsurance days are billed.

Absent any other insurer's payment, three days are billed in form locator 9 (Coinsurance

Days) with Value Code 9 or 11 and Value Amount in form locator 39 (Coinsurance

Value Code and Amount) and 20 days are in the "Cost Report Days" field of the CWF

record.

EXAMPLE 5: Coinsurance Involved - PPS (no outlier involved) or Non-PPS

Hospital

A beneficiary has 30 coinsurance days available at admission. The hospital stay was 20

days. The provider bills 20 days in Covered Days (form locator 7) as if there were no

other payer involved. After performing the calculation to determine utilization

chargeable, it is determined that the beneficiary can be charged with 10 days. Therefore,

only 10 coinsurance days are billed.

Absent any other insurer's payment, 20 days are billed in form locator 9 (Coinsurance

Days) with Value Code 9 or 11 and the Value Amount in form locator 39 (Coinsurance

Value Code and Amount).

The A/B MAC (Part A) enters 10 days in the "Coinsurance Days" field and the "Cost

Report Days" field of the CWF Record.

Absent any other insurer's payment, 20 days are billed in form locator 9 (Coinsurance

Days) with Value Code 9 or 11 and the Value Amount in form locator 39 (Coinsurance

Value Code and Amount).

In this case, the A/B MAC (Part A) enters 20 days in the "Coinsurance Days" field

and the "Cost Report Days" field of the CWF record.

EXAMPLE 6: PPS Hospital

A beneficiary enters the hospital with two lifetime reserve days (LTR) remaining and

elects to use them. The beneficiary is discharged after 15 days before the outlier

threshold is reached. The Medicare payment rate is $5,000. The primary payer amount

for Medicare covered services is $3,000. The applicable coinsurance amount is $764 (2

LTR days at $382 a day). Medicare would have paid $4,236 as primary payer ($5,000 -

$764).

Medicare secondary liability = $5,000 - $3,000 = $2,000

Utilization days potentially chargeable equal:

$2,000 divided by $4,236 X 15 days = 7 days

In this case, charge only the actual days of coverage in the stay, or two days, for

utilization and cost reporting purposes.

EXAMPLE 7: PPS Hospital - Stay

A beneficiary enters the hospital with two regular coinsurance days remaining and is

discharged after 15 days. The primary payer amount for Medicare covered services (i.e.,

the entire stay) was $3,000. The Medicare payment rate is $5,000. The applicable

coinsurance amount is $396 (2 coinsurance days at $198 a day). Medicare would have

paid $4,604 as primary payer ($5,000 - $396).

Medicare secondary liability = $5,000 - $3,000 = $2,000

Regular benefit days chargeable =

$2,000 divided by $4,604 X 10 days in basic portion of stay = 7 days

Charge the beneficiary two coinsurance days, since only two days were available.

Lifetime reserve days chargeable =

$2,000 divided by $2,708 X 5 days in outlier portion of stay = 3.6 rounded to 4

days.

Charge the beneficiary for lifetime reserve days and determine coinsurance on this basis.