2014 Cap Year Mandatory Hospice Cap Calculation – Be Ready

With the 2014 cap year just concluded, it's time to think about the new cap calculation requirements.

Over the summer, CMS finalized its revisions to the hospice cap rule, requiring hospices beginning with cap year 2014 (just completed) to calculate and return hospice cap overpayments within a very tight window. Hospices that fail to submit this calculation and, if applicable, repayment (or repayment plan) will be subject to suspension of all reimbursement pending completion of the report/repayment.

As a result, every hospice must give this careful attention, whether they face likely cap liability or not.

And, although CMS initially proposed to allow hospices to submit such reports immediately upon the close of a cap year, as finalized, the regulation requires hospices to use data that is derived from the PS&R system at least three months after the end of the cap year.

So for the 2014 cap year, hospices must wait until February 1, 2015 to run the necessary reports.

Hospices must then report and, if applicable, repay 2014 cap not later than March 31, 2015.

3,700 hospices therefore have a narrow window in which to query the PS&R system (not before February 1, 2015 for cap year 2014) and file the report and plan for overpayment (not later than March 31, 2015).

In our comments to CMS' proposed rule, we noted that not all hospices are registered for, or know how to use, the PS&R system. All hospices should now make sure that their registration is active and that their staff is educated on its proper use.

In our comments, we also noted that the PS&R system would be under severe strain when 3,700 providers submit virtually simultaneous queries after year end. The PS&R system is known to respond slowly in times of heavy use. It has never been put through the strain that this new tight timeline will impose. For this reason, we recommend that hospices submit queries early in February to ensure that no matter how long the reporting takes it is likely to be in hand during the two month window.

To calculate cap using the PS&R system, providers must run two distinct reports, a cap report (called Beneficiary Count) and a Provider Summary Report (revenue report). In our comments, we suggested that CMS automate these calculations into one function and even send hospices the cap report automatically. CMS ignored this suggestion, leaving hospices to run both reports and make the correct technical calculations. For instance, the Provider Summary Report must be...