Effective January 1, 2010, for calendar year 2010, the outlier payments made to each Home Health Agency (HHA) will be subject to an annual limitation. Medicare systems will ensure that outlier payments comprise no more than 10% of the HHA’s total HH PPS payments for the year. Medicare systems will track both the total amount of HH PPS payments that each HHA has received and the total amount of outlier payments that each HHA has received. When each HH PPS claim is processed, Medicare systems will compare these two amounts and determine whether the 10% has currently been met. If the limitation has not yet been met, any outlier amount will be paid normally. (Partial outlier payments will not be made. Only if the entire outlier payment on the claim does not result in the limitation being met, will outlier payments be made for a particular claim.) If the limitation has been met or would be exceeded by the outlier amount calculated for the current claim, other HH PPS amounts for the episode will be paid but any outlier amount will not be paid. When the calculated outlier amount is not paid, HHAs will be alerted to this by the presence of claim adjustment reason code 45 on the accompanying remittance advice. This code is defined: “Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.”
Since the payment of subsequent claims may change whether an HHA has exceeded the limitation over the course of the timely filing period, Medicare systems will conduct a quarterly reconciliation process. All claims where an outlier amount was calculated but not paid when the claim was initially processed will be reprocessed to determine whether the outlier has become payable. If the outlier can be paid, the claim will be adjusted to increase the payment by the outlier amount.
These adjustments will appear on the HHA’s remittance advice with a type of bill code that indicates a contractor-initiated adjustment (type of bill 3XI) and the coding that typically identifies outlier payments. quarterly reconciliation process occurs four times per year, in February, May, August and November.
If you need additional information regarding the CMS rule, you may visit the CMS website at: http://www.cms.hhs.gov/center/hha.asp