The U.S. Department of Health & Human Services (“DHHS”) Office of Inspector General (“OIG”) issued a Report in July 2021 regarding the CAP management process of Palmetto GBA, LLC (“Palmetto”). Palmetto was selected from the Medicare Administrative Contractors (“MAC”) because Palmetto served the highest number of hospices during the audit period (2017 CAP Year).
The results were that Palmetto accurately calculated the CAP, but did not collect all CAP overpayments or pay refunds associated with the applicable lookback year policies. The uncollected overpayments totaled $549,639 and refunds not made to the hospices totaled $17,513.
The OIG recommended that Palmetto:
- Collect the $549,639 in lookback payments and return $17,513 in lookback refunds,
- Discontinue the policy of waiving certain overpayments related to lookback years and start collecting all hospice CAP overpayments, as well as paying refunds, and
- Develop processes for communications between departments directly and indirectly involved in hospice CAP oversight.
Palmetto accepted these recommendations. The Palmetto acceptance is included as an Appendix to the report.
It is important to recognize that CAP calculations can be recalculated for a period of three years from the later of the Original CAP Year Notice of Calculation or a subsequent recalculation that results in an increase in the CAP liability from a previous calculation.
The $549,639 of unrecovered overpayments is largely the result of a waiver of overpayment collection if:
- The total beneficiary count changed by less than one (1) beneficiary from the lookback calculation performed in the previous year and
- There were no overpayments when the initial CAP amount for the three (3) subsequent years were originally calculated.
The Report also addresses granting Extended Repayment Schedules (“ERS”) when issues existed at the time of the request for the ERS that might have altered granting the ERS.
The entire report is available here.
Hospices that exceed the CAP, or operate at or near CAP, need to have a plan for monitoring the status of CAP liabilities and updating estimates of any ultimate CAP liabilities. The ultimate CAP liability represents the total estimated CAP liability for any respective CAP Year, an estimate of the amount expected to be repaid now and into the future. The 2021 CAP Year recently ended on September 30, 2021, and self-reporting is due to the MAC on or before February 28, 2022.
The following are several CAP self-reporting tips (self-reporting is due on or before February 28, 2022):
- Make certain your PS&R access is active (update password),
- Make certain to use the appropriate method for counting beneficiaries,
- Pull Medicare payments and beneficiary counts at the earliest allowed date to minimize any liability which may be due with the self-filing (first week of January 2022),
- If the CAP Report, prepared in January, reflects a liability, don’t file until the end of February for cash-flow purposes, and
- If you expect, or have a CAP liability, determine how the liability is to be repaid. If you plan on requesting an Extended Repayment Schedule (“ERS”), get your accounting records closed and financial statements prepared early to support the request for ERS.