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Volume 21.15

Many hospices incur CAP liabilities, which must be repaid to the Medicare program.  Information provided by HRSA regarding lost revenues does not specifically address CAP overpayments; however, HRSA Q&A includes the following:

“Provider Relief Fund recipients shall exclude from the reporting of net patient revenue payments received or payments made to third parties relating to care not provided in 2019, 2020, or 2021.”

Many hospices may repay a previous year CAP liability in 2019.  Likewise, a hospice may repay a 2019 CAP liability in 2020 and 2021, etc.

In the determination of 2019, 2020, and 2021 patient revenues, a hospice that has experienced a CAP liability should apply any CAP liability to the appropriate period to which the CAP liability applies.  Otherwise, a significant distortion of patient revenues could be reported inappropriately.  For example, assume a hospice incurred a CAP liability for the 2020 CAP Year, which was paid in the Spring of 2021.  The quarter during which the repayment was made could reflect a significant, but inaccurate, decline in revenue during the quarter of the repayment.  In fact, the revenue for the four (4) quarters during which the 2020 CAP liability was generated (4th quarter of 2019 and 1st three quarters of 2020) should be reduced by the CAP liability for purposes of reporting quarterly revenue in the PRF Portal.

A hospice that has regularly incurred CAP liabilities may need to spend an appropriate amount of time to more accurately estimate the revenues earned in each of the reporting quarters.  Reporting quarterly revenue is further complicated when a hospice has received multiple recalculations of any CAP liability.


Most providers, including hospices, use revenues as reported in their accounting records for purposes of reporting quarterly revenues to support any lost revenues calculations in their PRF Report.  However, to improve on the accuracy of reported quarterly Medicare revenues, many providers are securing PS&R data by quarter to obtain these revenues.  Likewise, many providers are securing PS&R quarterly revenue for comparison against revenues reported in their accounting records.

Remember, reporting revenues on a consistent basis between 2019, 2020, and the first two (2) quarters of 2021 is most important.  It is equally important to recognize that providers are to report revenues and expenses on their basis of accounting (cash, accrual, or modified accrual).  PS&R data can be secured on an accrual or cash basis.  Hospices that report revenues throughout the year on a cash-basis but convert to accrual-basis at year-end need to be especially cautious to consistently report revenues (cash or accrual basis) for the thirty (30) month period.