Did Your Risk of Future CAP Overage Letters Increase?

Reopening of prior year CAP calculations is always difficult to manage and is one of the dreaded letters that you may receive any year. It’s difficult enough to manage CAP during a given CAP year, but you also need to efficiently estimate CAP for patients who move between hospice providers so that you can estimate your risk of CAP overage and associated estimated overpayments.

The OIG released an audit of CGS’ cap calculation process for the 805 hospices that operated in CGS’s jurisdiction. Of these, 61 had net cap overpayments totaling $9.1 million for cap year 2020.

As part of the audit, the OIG reviewed the templates used to calculate aggregate cap amounts and selected 45 hospices to determine whether CGS followed its processes and whether the calculations in the templates were accurate.

The audit identified that CGS accurately calculated the initial 2020 cap amounts for all 805 hospices and collected or attempted to collect the $9.1 million in cap overpayments in accordance with CMS requirements.

For the the 45 selected hospices, the audit revealed that CGS did not reopen and recalculate most hospice caps for prior cap years (i.e., 2017, 2018, and 2019) resulting in lost collections of overpayment for these prior years. (CAP calculations may be reopened for up to three years.)

As a result, the OIG recommended actions that would increase CGS’ compliance with the policy of reopening prior year CAP calculations.

Hospice agencies operating in the CGS jurisdiction should take note of the results of this audit as it will likely result in increased identification of CAP overpayment demands in upcoming years.

For Additional Information

Link to full OIG report: https://tinyurl.com/ym3vu3ez

Video: Hospice CAP and key indicators for hospice CAP risk