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Last Modified: 6/28/2018 Location: FL, PR, USVI Business: Part A

Interim rate documentation information

When you submit your interim financial data to First Coast Service Options Inc. (First Coast), your Medicare administrative contractor (MAC), for an interim rate adjustment, please use the appropriate Interim Rate Review Documentation Request Form. These forms are designed to capture important information relevant to prospective payment system (PPS) payments (including disproportionate share hospital [DSH]) and indirect medical education (IME) adjustment data. Forms are also available for hospitals reimbursed under the Tax Equity & Fiscal Responsibility Act (TEFRA), as well as for critical access hospitals (CAH).
Please click PARD forms to download the appropriate interim rate documentation form. Once you have completed it, follow the instructions and return the form to the Provider Audit and Reimbursement Department (PARD), preferably by email; however, fax or U.S. mail is also acceptable.

Interim payments for items reimbursable on a reasonable cost basis

Payment for items reimbursable on a reasonable cost basis will be made on an interim basis subject to retrospective adjustment based on a submitted cost report. These include:
Direct medical education - Provider Reimbursement Manual 15-1, (PRM 15-1), chapter 28, section 2802.B.2 external link.
Organ acquisition costs for hospitals approved as organ transplant centers (OTC) PRM 15-1, chapter 28, section 2802.B.8 external link.
Bad debts for uncollectible deductibles and coinsurance. PRM 15-1, chapter 3, section 300 external link.
Nursing and allied health costs PRM 15-1, chapter 4, section 404 external link.
Non-approved interns and residents’ costs PRM 15-1, chapter 4, section 404.1.B external link.
Interim payments for the costs of these items will be determined for periodic interim payments (PIP) and non-PIP hospitals and skilled nursing facilities (SNFs) by estimating the reimbursable amount for the year using Medicare principles of cost reimbursement and dividing it into 26 equal biweekly payments. These payments follow the same procedures as for PIP payments under the prospective payment system (PPS) per PRM 15-1, chapter 24, section 2405.1B external link. The payments will be made two weeks following a two-week period of services.
The estimated amount will be based on the most current cost report data available. The interim payments will be reviewed and, if necessary, adjusted during the reporting period with final settlement based on a submitted cost report. If appropriate, these payments will be combined with the biweekly interim payments for hospitals and SNFs on PIP.

Payment under the periodic interim payment (PIP) method

Hospitals and SNFs (including hospitals and SNFs not previously on PIP) that meet the requirements in 42 CFR (Code of Federal Regulations) section 413.64 and in PRM 15-1, chapter 24, section 2407 external link may elect to receive interim payments for inpatient operating costs under PIP in level biweekly amounts. Approval of this election is at the discretion of the MAC and must be specifically requested by the hospital. After PIP is granted by the MAC, it may continue to be used only where the intermediary is assured that the hospital continues to meet requirements necessary to remain on PIP (e.g., timely and accurate submission of information requested by the MAC) and that proper payments are being made under this method. Timely submission of data includes submission of a bill within 30 days of discharge of a Medicare patient. Hospitals may opt out of PIP at any time. Payments under PIP will be made two weeks following a two-week period of services (see regulations section 42 CFR 413.64 external pdf file. In addition to PIP, a hospital or SNF will receive separate payment for outliers. See PRM 15-1, chapter 24, section 2405.5 external link. As noted above, all PPS hospitals receive additional payments for items reimbursable on a reasonable cost basis and, as applicable, for the adjustment for the indirect cost of medical education per PRM 15-1, chapter 24, sections 2405.2 and 2405.3 external link.
For hospitals on PIP, the interim payment amount will be based on the total estimated discharges for the reporting period multiplied by the estimated prospective payment amount. The estimated prospective payment amount will be based on the hospital's actual payment experience under PPS adjusted for projected changes during the year. The total estimated annual amount, net of total estimated annual deductible and coinsurance amounts (PRM 15-1, chapter 24, section 2407.2 external link), will be divided by 26 and paid biweekly.
The payments will be reviewed and, if necessary, adjusted at least twice during the reporting period and are subject to final settlement at year end based on a reconciliation to total payments as determined on a per discharge basis. Necessary adjustments will be made based on the hospital's actual PPS payment experience prior to the review plus any changes projected for the year, e.g., a revised estimate of the anticipated number of discharges. Any request by a hospital or a SNF for a change in PIP amounts must be accompanied by supporting documentation. In addition to adjusting the level payment, a retroactive adjustment will be made to reconcile the amounts paid to date.
An adjustment may also be necessary for providers whose fiscal year is other than the federal fiscal year. As indicated in PRM 15-1, chapter 24, section 2405 external link, on October 1 of each year during the transition period, the regional/national blend of the federal portion of the prospective payment will change. In addition, on this date, the prospective payment amounts are subject to change resulting from inflation factors or from adjustments to the diagnostic related group (DRG) classifications or weighting factors. As a result of these changes, a hospital with a fiscal year other than the federal fiscal year will require a change to its PIP amount to take into account a change in prospective payments for the portion of the year after October 1. MACs may wish to make this adjustment at a time that would coincide with one of the other regularly scheduled reviews.
First Coast Service Options (First Coast) strives to ensure that the information available on our provider website is accurate, detailed, and current. Therefore, this is a dynamic site and its content changes daily. It is best to access the site to ensure you have the most current information rather than printing articles or forms that may become obsolete without notice.