Low Volume Add-On Payment

In accordance with sections 3125 and 10314 of the Affordable Care Act, the method for qualifying for and determining low volume payments available to acute care hospitals was updated for discharges occurring in FY 2011 and 2012. The most prominent revisions are:

  • Previously, a facility had to be more 25 road miles from the nearest "like" hospital, whereas it now only has to be more than 15 road miles away.
  • Previously, a facility had to have fewer than 200 total discharges, whereas now the facility only has to have fewer than 1,600 discharges of individuals entitled to, or enrolled for, benefits under Medicare Part A. Note that the payment add-on percentage will range anywhere from 0 up to 25%, depending on the number of discharges a facility has for the period in question.

Low volume payment will now be calculated using a continuous linear sliding scale ranging from 25.00% for hospitals with less than 200 Medicare Part A discharges to 0.00% for hospitals with greater than 1,600 Medicare Part A discharges. The basis of the low volume calculation payment will be determined based on the number of Medicare Part A discharges from the March 2010 update for FY 2009 MedPAR files, as published in the August 16, 2010 Federal Register (75 FR 50238-50275).

Note in the final rule on pages 50242-50274 that CMS has published the table of all Acute Care facilities that MAY qualify for this status based on the number of discharges in their previous period. This table will be used by FI/MACs to determine whether a provider qualifies based on discharges. No alternative data can be used. This table can also be downloaded from the CMS website via the following link to the CMS website: http://www.cms.gov/AcuteInpatientPPS/downloads/Low_Volume_FY11_FY09_discharges.zipzip file

If you believe that your facility qualifies for this additional payment based on the table mentioned above, the next step is to submit documentation supporting that you meet the mileage requirement. This should include the address of your facility, as well as the address of the nearest "like" hospital. This package should also include documentation showing the road mileage between the two facilities. Adequate support may include a printout from Google Maps, Yahoo Maps, or any other reliable internet mapping service showing the road mileage between the two facilities. Please note that, per CMS requirements, your request MUST be made in writing no later than September 1, 2010 in order to be effective with the October 1, 2010 start date for this payment. Any requests received after September 1, 2010 will be reviewed by the contractor and will be effective 30 days after the approval letter has been sent out.

This documentation should be sent to the following address:

Fed Ex/Overnight Mail
WPS Medicare
Attn: Chris Severson
Medicare Audit Advisement
3333 Farnam Street, Suite 700
Omaha, NE 68131

USPS Mail
WPS Medicare
Attn: Chris Severson
Medicare Audit Advisement
PO Box 1604
Omaha, NE 68101

E-mail:
chris.severson@wpsic.com

Claim-by-Claim Treatment

The low volume payment will be paid out on a claim-by-claim basis using the following formula:

Total DRG payment * Low Volume Adjustment Percentage = Low Volume Add On¹

¹ Low volume is not reduced for hospitals who have received their cap payment amount for a specific DRG payment component, such as Disproportionate Share Hospital (DSH) payment. The low volume calculation is independent of the separate DRG payment component calculations, and takes into consideration all components of the DRG payment before adding the low volume percentage. That is, if a hospital is capped for DSH payment, the low volume calculation will still incorporate the DSH component of the DRG payment for determining the total low volume payment.

The "total DRG payment" that the Low Volume Adjustment Percentage is multiplied against includes all of the following Federal Payments: Federal Operating DRG payments, any additional Hospital Specific Payments (for SCH and MDH facilities only), Capital DRG payments, Outliers, IME Payments, and DSH payments. It does not include any outpatient payments.

Currently the FISS payment system has no value codes assigned for the reporting of the low volume adjustment, thus has no reported value on the claim system. Instead, it is incorporated implicitly into the Net Reimbursement. In other words, your total net reimbursement will be greater than the sum of your actual DRG payments. This difference is the Low Volume Payment. More information is forthcoming and will be posted appropriately.

PS&R

PS&R's with run dates prior to 4/30/2011: The PS&R system did not have a separate indicator line for low volume payment. Summary PS&Rs will reconcile with Net Reimbursement by means of the 'Other' payment line. Note that the "other amount" will appear as a negative item, even though it is actually an add-on payment. The "negative" reporting is due to the fact that the "other" amount is included under the "less" or "reductions" heading. It is essentially subtracting a negative number, which is akin to adding the amount in. More information is forthcoming and will be posted appropriately.

Update: 5/26/2011

Effective with release 03.04.00 with run dates on/after 4/30/2011 an informational field has been included on the PS&R report types 11X/41X. For claims loaded since October 2010, the values for the two new fields have been calculated retroactively.

Cost Reporting

Currently with the implementation of the 2552-10 cost reporting forms, clarification on the appropriate reporting structure for low volume payments has not been made. More information is forthcoming and will be posted appropriately.

For questions concerning how low volume is determined, please contact the WPS Audit Supervisor assigned to your facility.

Page Last Updated: Thursday, 15-Dec-2011 15:01:37 CST