Examples

EXAMPLE 1: LTR Days Cover Cost Outlier

Date of Service: 1/1 - 1/31 discharge 

Medically necessary days 30 

Covered charges $55,000 

Benefits available 30 LTR 

Covered days 30 

Noncovered days 0 

Cost report days 30 

All charges for Medicare approved revenue codes billed as covered No OC 47 needed

 Reimbursement: Full DRG plus cost outlier based on $55,000 covered charges

EXAMPLE 2: LTR Days Exhaust in the Cost Outlier 

Dates of service: 1/1 - 2/10 discharge 

Medically necessary days: 40 

Covered charges: $65,000 

Benefits available: 30 LTR 

Covered days: 30 

Noncovered days: 10 

Cost report days: 30

 30 days covered charges for Medicare approved revenue codes and 10 days noncovered charges. OC 47: 1/26 OC A3: 1/30 

Reimbursement: Full DRG plus cost outlier based on $55,000 covered charges ($50,000 inlier and $5,000 outlier

EXAMPLE 3: LTR Days Exhaust Prior to Cost Outlier 

Dates of service: 1/1 - 1/31 discharge 

Medically necessary days: 30 

Covered charges: $55,000 

Benefits available: 20 LTR 

Covered days: 20 

Noncovered days: 10 

Cost report days: 25 

25 days covered charges for Medicare approved revenue codes and 5 days noncovered charges OC 47: 1/26 OC A3 1/25 OSC 70: 1/21 -1/25

 Reimbursement: Full DRG payment, no cost outlier 

EXAMPLE 4: Coinsurance Days Exhaust Prior to Cost Outlier and No LTR Days Are Available

 Date of Service: 1/1 - 1/31 discharge Medically necessary days 30 

Covered charges $55,000

 Benefits available: 20 coinsurance 

Covered days: 20 

Noncovered days: 10

 Cost report days: 25 

25 days covered charges for Medicare approved revenue codes and 5 days noncovered charges OC 47: 1/26 OC A3: 1/25 OSC 70: 1/21 - 1/25 

Reimbursement: Full DRG payment, no cost outlier 

EXAMPLE 5: Coinsurance Days Exhaust Prior to Cost Outlier.

 LTR Days Exhausts in the Cost Outlier 

Date of Service: 1/1 - 2/10 discharge 

Medically necessary days 40 

Covered charges $65,000 Benefits available: 20 coinsurance and 10 LTR Covered days: 30 Noncovered days: 10 Cost report days: 35

 35 days covered charges for Medicare approved revenue codes and 5 days noncovered charges OC 47: 1/26

OC A3: 2/4 

OSC 70: 1/21 - 1/25

 Reimbursement: Full DRG payment, plus cost outlier based on $60,000 covered charges ($50,000 inlier, $10,000 outlier, $5,000 noncovered)

EXAMPLE 6: Full and Coinsurance Days Cover Cost Outlier

 Date of Service: 1/1 - 1/31 discharge Medically necessary days 30 

Covered charges $55,000 

Benefits available: 10 full and 20 coinsurance Covered days: 30

 Noncovered days: 0 

Cost report days: 30

 All charges for Medicare approved revenue codes billed as covered.

 OC 47: Not needed 

Reimbursement: Full DRG payment plus cost outlier based on $55,000 covered charges. 

EXAMPLE 7: Coinsurance Days and LTR Days Exhaust in the Cost Outlier 

Date of Service: 1/1 - 2/28 discharge

Medically necessary days 58 

Covered charges $83,000 

Benefits available: 10 full, 30 coinsurance and 10 LTR 

Covered days: 50 

Noncovered days: 8 Cost report days: 50 

50 days covered charges for Medicare approved revenue codes and 8 days noncovered charges 

OC 47: 1/26 OC A3: 2/19 

Reimbursement: Full DRG payment, plus cost outlier based on $75,000 covered charges ($50,000 inlier, $25,000 outlier, $8,000 noncovered)

EXAMPLE: 8: LTR Days Exhaust Prior to Cost Outlier and Noncovered Span(s)

 Present 

Dates of service: 1/1 - 1/31 discharge 

Medically necessary days: 28 OSC 76 1/10 - 1/11 

Covered charges: $55,000 

Benefits available: 20 LTR

 Covered days: 20

Noncovered days: 10 

Cost report days: 25 

25 days covered charges for Medicare approved revenue codes and 5 days noncovered charges 

OC 47: 1/28 OC A3 1/27 OSC 70: 1/23 -1/27 

Reimbursement: Full DRG payment, no cost outlier

Part A Remittance Advice

For remittance reporting PIP and/or non-PIP payments, the Hemophilia Add On is included in the overall claim payment (Provider Reimbursement, CLP04). 

If an inpatient claim has a Hemophilia Add On payment, the payment to the provider is increased in the PLB segment with a PLB adjustment HM. The Hemophilia Add On amount will always be included in the CLP04 Claim Payment Amount. 

For remittance reporting PIP payments, the Hemophilia Add On will also be reported in the provider level adjustment (element identifier PLB) segment with the provider level adjustment reason code HM. For remittances reporting PIP payments, the sum of inpatient claims, CLP04, is backed out at PLB with PI/PA. If an inpatient claim has a Hemophilia Add On payment, the payment to the provider is increased in the PLB segment with a PLB adjustment HM.

Standard Hard Copy Remittance Advice

For paper remittances reporting non-PIP payments involving Hemophilia Add On, add a "Hemophilia Add On" category to the end of the "Pass Thru Amounts" listings in the "Summary" section of the paper remittance. Enter the total of the Hemophilia Add On amounts due for the claims covered by this remittance next to the Hemophilia Add On heading.

The following reflects the remittance advice messages and associated codes that will appear when processing claims under this policy. The CARC below is not included in the CAQH CORE Business Scenarios.

Group Code: OA 

CARC: 94

RARC: MA103 

MSN: N/A

This will be the full extent of Hemophilia Add On reporting on paper remittance notices; providers wishing more detailed information must subscribe to the Medicare Part A specifications for the ASC X12 835 remittance advice, where additional information is available.

Cost Outlier Bills With Benefits Exhausted

PM - A-99-17 (CR-749) 

Providers under IPPS, LTCH PPS, and IRF PPS follow this scenario when benefits are exhausted.

The methodology for using benefit days and reimbursing cost outliers is based on the beneficiary having a lifetime reserve (LTR) benefit day which the beneficiary elects to use or a regular benefit (regular or coinsurance) day beginning the day after the day covered charges are incurred in an amount that results in a cost outlier payment for the provider. Additional charges are considered covered for every day thereafter for which a beneficiary has, and elects to use, an available benefit day.

DRG claims with cost outlier payments with discharge dates on or after October 1, 1997, must have an Occurrence Code (OC) 47 on the claim unless there are enough full and/or coinsurance days to cover all the medically necessary days or the only available benefits are LTR days and there are enough LTR days to cover all the medically necessary days. DRG claims without cost outlier payments can never have regular benefit days combined with LTR benefit days.

Once the cost outlier threshold is known, providers must add the daily covered charges for the claim until they determine the day that covered charges reach the cost outlier threshold. Providers must exclude days and covered charges during noncovered spans, e.g., during Occurrence Span Code (OSC) 74, 76, or 79 dates. Providers must then submit the date of the first full day of cost outlier status (the day after the day that covered charges reach the cost outlier threshold) on the bill using OC 47. The OC 47 date cannot be equal to or during OSC 74, 76, or 79 dates. Providers must determine the amount of regular, coinsurance, and LTR days the beneficiary has available per CWF inquiry or their FI.

Any nonutilization days after the beneficiary exhausts coinsurance or LTR days before the OC 47 date will be identified using OSC 70. LTR days should be used as necessary and as elected by the beneficiary. If coinsurance days are exhausted during the inlier portion of the stay and there is a period of nonutilization indicated by the presence of OSC 70 and the beneficiary elects not to use LTR days, covered charges are limited to the exact amount of the cost outlier threshold and both OC A3, which shows the last covered day, and OC 47, which shows the following day which is the first full day of cost outlier status,must be shown. When coinsurance and/or LTR days are exhausted during the cost outlier portion of the stay, OC A3 should be used as appropriate to report the date benefits are exhausted. Covered charges should be accrued to reflect the entire period of the bill if the bill is fully covered or the entire period up to and including the date benefits were exhausted, if benefits were exhausted.

Assumptions for all of the following examples: 

1. Cost outlier threshold amount is $50,000. 

2. Threshold amount is reached on the 25th day. 

3. Billed charges are $1,000 each day thereafter. 

4. Beneficiary elects to use any available LTR days.