Hospice CAP Liability and Claims Denials

The Health Group 

As hospices become subjected to claims denials, whether such denials are the result of a UPIC or not, the hospice may be entitled to a refund of previously paid CAP liabilities.  We reported on this in 2021; however, The Health Group, LLC ("THG") recently has identified several hospices that are entitled to a CAP liability refund.

When a claim is retroactively denied for a completed CAP Year, the denied claims impact Medicare payments and beneficiary counts used in the determination of the aggregate payment limitation (“CAP”).

If your hospice has incurred a CAP liability in completed CAP Years, but has experienced claim denials for whatever reason, you should be tracking the CAP liability monthly for purposes of identifying the status of that CAP liability.  This monthly tracking allows you to monitor the increasing CAP liability, but also allows you to identify the impact of claim denials, if any, on that liability.

If you identify an overpayment, notify the Medicare Administrative Contractor (“MAC”) immediately of the overpayments, including calculations, and request a refund of the overpayment.  Remember, if you have overpaid a CAP liability because of denied claims, then Medicare has recovered from you twice; once when the claim was denied and again when the CAP overpayment was demanded for repayment.

CMS is aware of the potential of a double recovery of amounts from hospices.  On April 19, 2021, the following was added to the Medicare Program Integrity Manual, Chapter 4: 4.17 – UPIC Hospice Cap Liability Process – Coordination with the MAC (Rev. 10711; Issued: 04-01-21; Effective: 04-19-21; Implementation: 04-19-21). . .

See https://www.cms.gov/files/document/r10711pi.pdf  for the changes.

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