CMS Provides Further Guidance to Hospices on How to Report Charges on the Hospice Claim

To:        NHPCO Membership
From:   NHPCO Regulatory Team
Re:       April 07, 2010

Summary at a Glance: On April 6, 2010, CMS issued a Q&A providing further guidance on how to report charges on the hospice claim.  The answer refers hospices to the Medicare Claims Processing Manual and the Provider Reimbursement Manual as outlined below.  Links to the section in each manual are also provided.

Answer:

1. CMS Medicare Claims Processing Manual, Pub 100-04, Chapter 25, “Completing and Processing the Form CMS-1450 Data Set”
   a)   Section 75.5 -- Form Locator (FL) 47 – Total Charges

• The provider sums the total charges for the billing period for each revenue code (Form Locator (FL) 42).
• If the services require, in addition to the revenue center code, a HCPCS procedure code, the provider sums the total charges for the billing period for each HCPCS code.
• The last revenue code entered in FL 42 is “0001” which represents the grand total of all charges billed.
• The amount for this code, as for all others is entered in FL 47.
• Each line for FL 47 allows up to nine numeric digits (0000000.00).

  The CMS policy is for providers to bill Medicare on the same basis that they bill other payers. (Emphasis added by NHPCO.)  This policy provides consistency of bill data with the cost report so that bill data may be used to substantiate the cost report.

2.    CMS Provider Reimbursement Manual, Part 1, Chapter 22, “Determination of Costs of Services”

a)  Section 2203: Provider Charge Structure as Basis for Apportionment

The link is for the Provider Reimbursement Manual, Part 1.  Click on Chapter 22 and download the zipped file.  When opening the zipped file, select the section entitled:  pr 1_2214_to_2231.doc

• The fiscal intermediary (FI/MAC) will evaluate the charging practice of the provider to ascertain whether it results in an equitable basis for apportioning costs. This evaluation will be done in determining reasonable cost reimbursement and to assure that Medicare’s share of the provider’s costs equitably reflects the costs of services received by Medicare beneficiaries.
• Each facility should have an established charge structure which is applied uniformly to each patient as services are furnished to the patient and which is reasonably and consistently related to the cost of providing the services.  This will allow the facility to assure that its charges are allowable for use in apportioning costs under the program.While the Medicare program (CMS) cannot dictate to a provider what its charges or charge structure may be, the program (CMS) may determine whether or not the charges are allowable for use in apportioning costs under the program

b)  Section 2202, “Definition of Charges”,

• Charges refer to the regular rates established by the provider for services rendered to both beneficiaries and to other paying patients.
• Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient.
• All patients’ charges used in the development of apportionment ratios should be recorded at the gross value; i.e., charges before the application of allowances and discounts deductions. (See §2206.l for information on accrual of charges and § 2204.l for hospital-based physicians charges.)

c)  Section 2204, “Medicare Charges”

• The Medicare Charge for a specific service must be the same as the charge made to non-Medicare patients (including Medicaid, CHAMPUS, private, etc.), must be recorded in the respective income accounts of the facility, and must be related to the cost of the service. (See §2202.4.)