CMS Pub. 100-16, ch. 8, § 40.2

Facility Services to Medicare-Eligible Beneficiaries

(Rev. 89; Issued: 11-02-07; Effective/Implementation: 11-02-07)

In determining the FFS capitation rates for a year, the annual per capita rate of payment

shall be adjusted to reflect the estimate, on a per capita basis, of the amount of additional

payments that would have been made in the area involved if individuals entitled to

Medicare benefits had not received services from facilities of the Veterans Administration

(VA) or Department of Defense (DOD). The Medicare Advantage FFS capitation rates for

certain areas, based on historical FFS claims data, may not reflect the added cost to MA

plans that cover services for such dually-eligible enrollees who might have obtained these

services from a VA or DOD facility if they were in the FFS program.

Incorporating costs associated with Medicare-covered services provided to beneficiaries in

VA and DOD facilities into the MA payment methodology is a multi-year project requiring

development of methods for matching coverage determinations and pricing of services,

because coverage and pricing rules differ for Medicare and the VA and DOD. CMS

continues to work on obtaining and analyzing the data. From 2004 through 2008, the

adjustment is zero.