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Volume 22.08

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)

This section applies to UPICs.

Medicare Part A includes a hospice benefit for terminally ill patients. Congress has established a retrospective “cap” on the aggregate amount that Medicare will reimburse hospice providers each year. Historically, PI contractor reviews of hospices have overlapped with the MAC review of the benefit cap liability for those same hospices, resulting in a potential double recovery for the government. Therefore, the following communication and process between the UPICs and MACs shall be followed, to minimize the occurrence of these double recoveries and check the RAC Data Warehouse to ensure the provider is not under suppression.

• UPIC Initiated Reviews:

When selecting claims using statistical sampling that may result in an actual and/or extrapolated overpayment, upon the initiation of a hospice review, the UPIC shall coordinate with the MAC to determine whether the hospice is subject to any finalized or ongoing cap liability reviews (self-reported, final, and/or re-opening) for the applicable period of the UPIC’s audit.

If there are no cap liability determinations, the UPIC shall proceed with its review. Upon identification of an overpayment, the UPIC shall coordinate with the MAC to ascertain whether in the intervening period (from the claims selection period to the overpayment determination) the hospice had become subject to any cap liability proceedings for that same period.

The UPIC shall finalize its review and issue the findings to the hospice and refer any overpayment to the MAC for collection. The MAC shall consider the cap liability and adjust as appropriate.

If it is determined that the hospice is subject to any finalized or ongoing cap liability reviews (self-reported, final, and/or re-opening), the UPIC shall consult with the MAC and design a statistical sampling for overpayment estimation (SSOE) for those specific year(s) according to the cap determinations to assist with reconciling cap overpayments. The UPIC shall finalize its review and issue the findings to the hospice and refer any overpayment to the MAC. The MAC shall consider the overpayments submitted by the UPIC and apply these to any subsequent, ongoing cap overpayments (self-reported, final, and/or reopening). This process ensures that a provider is not penalized for the same beneficiary twice.”

Claim denials resulting from any type of review can result in a double payment of the liability, or a portion of that liability.  Do not hesitate to contact us at contact@healthgroup.com or reach out to any member of our professional staff if you believe this may have happened to your hospice.


The 2022 Hospice Financial Management Academy is scheduled for September 19-20, 2022.  The program will be held at the Hotel Monteleone in New Orleans.  Details will be available within the next two weeks.  Mark your calendar for this event.  Space is limited at our programs based on the nature of the programming.  This year’s program will provide concurrent programming to allow attendees to focus on those issues most important to them.