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Gaining Peace of Mind with CAP Estimations.

Gaining peace of mind with CAP estimations.

It is uncomfortable to be informed during the final months or days of the Hospice CAP year – which ends September 30th of each year – that your hospice agency is near, or over, CAP. Not much time to recover at this point, and totally lost on how to resolve the dilemma...

Let’s figure out how you got to that point:

1. Long length of stays

2. Fewer hospice admissions, and factors affecting that count being

a. Admissions in second or greater benefit period

b. Transfers in/out

3. Continuous Care, Respite or GIP Levels of Care

a. Respite and GIP combined must be less than 20% of total census days

What’s in the math?

ALL revenue during the Hospice CAP Fiscal year which begins October 1st of each year and ends September 30th of the following year. This includes revenue of existing patients that may have elected hospice in previous years but are still on service (long length of stays)

ONLY admission without previous hospice experience. Plan to exclude any hospice admission that has previous hospice (admission in second or greater benefit period). Plan to exclude any transfer in/out that occurred during the fiscal year – those are shared or proportional. Patients that discharge by revocation or agency discretion can influence this number as well since the hospices will share (proportional) that admission – this is not limited to the Fiscal year.

The number of admissions without previous hospice, less the number of transfers, is a good rule of thumb. Multiply that number by the Medicare CAP allowance published for the specific year.

Compare that number to Revenue for the same year.

IF Medicare CAP total is larger than Hospice Revenue – you’re under CAP.

When to be involved?

Begin at the beginning. In November, calculate the hospice CAP allowance (admissions X CAP allowance) – compared to revenue for the same month. Get prepared sooner – not later!

How to prepare/mitigate?

Length of Stay

• Ask clinical staff and hospice physician to review length of stays over 180 days

o I know!! This should be done at EVERY Recertification – Right?!

Level of Care

Consider proper use of levels of care:

• Confirm that the utilization of the higher level of care is patient appropriate versus in response to industry pressures.

o I know!! Isn’t the practice of automatically placing patients on continuous care or respite at beginning of care pushing ethical boundaries?


Review referral sources. When was that last time your agency was contacted by physician or hospital that had not referred before? When was the last time your agency made contact with physicians or hospitals not in your referral base? (Does the hospice marketer/community liaison see the same doctors/hospitals/nursing facilities- without new contacts?) Involve the hospice physician.

What happens next?

MAC’s are reviewing the information that is sent with the Hospice CAP report and internally comparing to hospice admissions recorded for the hospice agency NPI and the PS&R (Provider Statistical & Reimbursement).

When overpayment is determined, the repayment is not made, then payments are withheld from claims processed – regardless of the date(s) of service. But, if a repayment is due, the ERS (Extended Repayment Schedule) (Form SDHC) can be requested.

Lack of knowledge is not an excuse. Be proactive, be knowledgeable, be prepared.

If you don’t have confidence in your CAP estimation and forecasting, or it’s just more difficult and time consuming than you can deal with, consider services like the ARC (Agency Report Card), that do the work for you and prepare meaningful, easy, visuals at your fingertips!

- Peggy Porter-McGee

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