Volume 25.11
Over twenty percent (20%) of hospices are now being subjected to Medicare program repayments because of the aggregate payment limitation (“CAP”).
Recently, we reported that the Office of Inspector General (“OIG”) determined that the Medicaid program administered in the state of Texas had failed to recover millions of dollars from Texas hospices due to the state’s failure to impose the CAP relating to services provided to Medicaid beneficiaries. Of course, since the Medicaid program is funded in part by the federal government, the federal government wants the state to return the federal share of the Medicaid payments.
Recently, we were alerted to the fact that TriWest Healthcare Alliance (“TriWest” or “Tricare”) was requesting information to determine whether a hospice in New Mexico was subject to CAP recovery for services provided to Veterans. TriWest has partnered with the Department of Defense and the Department of Veterans Affairs (“VA”) serving as the carrier for VA payments to hospices in the western part of the United States.
Tricare’s payments for hospice services are described in the Tricare Reimbursement Manual, Chapter 11, Section 4. The calculation of the CAP is described at 3.1.6.1. This calculation is based on the old Streamlined Method calculation (no longer used my Medicare) whereby admissions during the period of September 28th through September 27th of the subsequent year are used to determine beneficiary counts. The calculated CAP based on these admissions is then compared to payments received for services from November 1st through October 31st of the subsequent year.
Hospices need to make certain that they are familiar with and monitoring all contractual obligations and reimbursement arrangements regardless of the payor source.
2025 CAP YEAR MANAGEMENT
The 2025 CAP Year has ended (September 30, 2025). Hospices should make certain that they have access to PS&R System data to complete the required self-determined CAP filing which is due on or before March 2, 2026. PS&R data should be pulled (beneficiary counts and payments) as soon as possible on or after January 1, 2026.
If the hospice anticipates a liability at the time of the filing, cash need preparations should begin, or the hospice should be planning for the submission of an Extended Repayment Schedule to liquidate the liability. If an ERS of over fifteen (15) months is planned, substantial financial information is required to be submitted in support of the ERS request. The required information is available on the respective MAC’s website.
A hospice can secure an ERS when the total amount of all outstanding payments, not included in another approved ERS, is ten percent (10%) or greater than the total Medicare payments made for the cost reporting period covered by the most recently submitted cost report. Additional information relating to an ERS is located here.