J.1.e_Appendix_E_-_Cost_Report_Instructions_2013.pdf

CHAPTER 23

INSTRUCTIONS FOR THE PREPAID HEALTH PLAN COST

REPORT

FORM CMS-276-08

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Typewritten Text Appendix E

FORM CMS 276

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Table Of Contents

2300 INTRODUCTION

2302 WORKSHEET S – CERTIFICATION PAGE

2303 WORKSHEET A – BUDGET FORECAST

2304 WORKSHEET B – PREMIUM DETERMINATIONS

2305 WORKSHEET C – INTERIM REPORTING

2306 WORKSHEET D – PLAN STATISTICS

2307 WORKSHEET E – SUMMARY TRIAL BALANCE

2308 WORKSHEET F – RECLASSIFICATIONS

2309 WORKSHEET G – ADJUSTMENTS TO EXPENSES

2310 WORKSHEET H – STATEMENT OF COSTS OF SERVICES FROM RELATED

ORGANIZATIONS

2311 WORKSHEET I – ALLOCATION AND STATISTICS FOR A & G ALLOCATION

2312 WORKSHEET J – SUMMARY OF PROVIDER COSTS

2313 WORKSHEET K – SUMMARY APPORTIONMENT OF NONPROVIDER COSTS

2314 WORKSHEET L – SUMMARY OF MISCELLANEOUS ITEMS

2315 WORKSHEET M – SETTLEMENT SHEET

2316 WORKSHEET N – MEDICARE PREMIUM RECONCILIATION

2317 CERTIFICATION BY INDEPENDENT AUDITOR

APPENDIX A – OPTION 2 INSTRUCTIONS

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2300 INTRODUCTION

The reporting requirements of a prepaid health care plan that has contracted with CMS are specifically defined in 42 C.F.R. §417.572(a) and (c), and 417.576(b)(1). For reimbursement purposes, these plans can be grouped into two major categories - Health Maintenance Organizations/Competitive Medical Plans (HMOs/CMPs) and Health Care Prepayment Plans (HCPPs). Briefly, the reporting requirements for each category are:

Cost Report HMO/CMP Reporting Requirement

HCPP Reporting Requirement Worksheets

1. Budget Forecast No later than 90 days prior to the beginning of the contract period

No later than 60 days prior to the contract period S, A and B

2. Interim Report

The Semi-Annual Interim is due no later than 60 days after the close of the first 6 months of the contract period

The Semi-Annual Interim is due no later than 45 days after the close of the first 6 months of the contract Period

S and C

3. 4th Quarter Interim Report

The Interim Final report must be filed, using the worksheets for the Final Cost Report, no later than 60 days after the close of the contract period

HCPPs are not required to file an Interim Final report. S, D thru N

4. Final Cost Report

No later than 180 days after the close of the contract period. This cost report must be certified by and independent certified public accountant (42 CFR §417.576 (b))

No later than 120 days after the close of the contract period

S, D thru N

If a plan fails to submit the budget and enrollment forecast on time, CMS may (1) establish an interim per capita rate of payment on the basis of the best available data and adjust the rate accordingly; or (2) if insufficient data exists on which to base an interim rate, suspend interim payments until the required report is filed and a new rate is established (42 C.F.R. §417.572(b)).

For failure to submit the final cost report on time, CMS may (1) initiate recovery of amounts previously paid, or (2) reduce interim payments, or (3) both (42 C.F.R. §417.576(b)(3)). CMS may extend the period for filing the cost report for good cause shown by the Plan (42 C.F.R. §417.576(b)(1)). However, interest on the amount owed will still accrue per the regulations (42 C.F.R. 405.378).

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The worksheets cover the prescribed format for the cost reports and are provided in Excel format. Electronic copies of the worksheets for each category of filing are accessible through CMS’ Health Plan Management System (HPMS). If the worksheets require modification to accommodate a Plan's unique reporting requirements, written approval must be obtained from CMS in advance of the contract period to which the report applies. CMS' approval of an alternative cost report may be granted if the alternative format presents cost and statistical data in the same detail as the prescribed format. In addition, CMS must be assured that such an alternative format can be used efficiently to determine the proper amount of reimbursement for covered services furnished to Medicare enrollees.

Methods of allocation and apportionment of costs set forth in these worksheets are not optional, they are required for the determination of reimbursement. If the Plan wishes to use an alternative method of allocation or apportionment or to change the approved method of allocation or apportionment from the prior contract year, CMS' advance approval is required. The Plan's request for such a change must be received by CMS at least ninety (90) days prior to the beginning of the first affected reporting period (42 C.F.R. §417.566)).

The cost report worksheets are designed to be of sufficient flexibility to take into account the diversity of operations, yet provide sufficient cost and statistical information to enable CMS to determine the proper amount of payment to the Plan. These worksheets accommodate the various bill processing options described in the Medicare Managed Care Manual (Pub. 100-16, Chapter 17a, §10.2). Therefore, the Plan may not be required to complete all worksheets. The Plan should confirm the particular reporting requirements applicable to which lines must be completed by discussing them in detail with the CMS accountant assigned to the Plan. This discussion should take place prior to the contract period. To avoid any later misunderstanding, the Plan should submit written confirmation of the conclusions reached to CMS. The Plan must submit all worksheets. Where appropriate, Plans should enter "NA" on those worksheets that are not used.

The Plan's cost reporting requirements in no way supplant the specific reporting requirements applicable to providers of services under the Medicare program. Each provider of services, whether owned or operated by the Plan, must comply with its own cost reporting requirements. (The Provider Reimbursement Manual, HCFA Pub. 15-II, sets forth these requirements in detail). The costs and statistics submitted for provider services furnished to enrollees are summaries of the information set forth in the provider cost reports and/or Bill Summary Report using the options detailed for Worksheet J.

The following sections explain how to fill out each individual worksheet for each category of reporting.

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2302 WORKSHEET S - CERTIFICATION PAGE

Line 1 - Name and Address of Plan - Enter the name and address including any trade name of the plan, if applicable.

Line 2 - Reporting Period and Plan Number - Enter the reporting period starting and ending dates. Enter the Plan identification number.

Line 3a - Type of Report - Identify the type of report you are filing: Budget Forecast, Interim Report, or Final Cost Report. See Section 2300, for the required worksheets that are filed with the type of report identified.

Line 3b - Bill Processing Option - Indicate the bill processing option selected by the plan. For a description of the different options available, refer to Chapter 17a, Subchapter A, Section 10.2 of the Medicare Managed Care Manual (HCFA Pub 100.16).

Line 3c - Reimbursement Under - Indicate by selecting from the drop down list the appropriate section of the Social Security Act under which the plan is seeking reimbursement. Section 1876 is for Health Maintenance Organizations and Competitive Medical Plans (HMOs/CMPs). Section 1833 is for Health Care Prepayment Plans (HCPPs).

Certification Statement - The certification must be prepared, signed and uploaded to as a PDF into HPMS after the worksheets have been completed in their entirety. The individual signing the certification must be an officer or responsible person authorized to act as an agent of the organization.

2303 WORKSHEET A - BUDGET FORECAST

This worksheet is provided to forecast the allowable Medicare costs per member per month that will be paid on an interim basis during the period covered by the report. The worksheet uses a prior year's final cost report, as revised by CMS if applicable, as a basis for establishing forecasted Medicare costs. If the Plan finds that this worksheet produces results that are not reflective of the forecasted period, use Column 4 of Part II to make the necessary adjustments to correlate the financial data to the forecasted period. Adjustments in Column 4 of Part II must be supported by the worksheet attached. For cost Plans that are new to the Medicare program and have no historical cost and statistical data as the basis for the current year budget, these Plans must instead use the final cost report form to project the current year budgeted figures. The period's budgeted cost and statistical data are entered into the final cost report form to generate the Medicare interim PMPM amount from Worksheet M.

All applicable worksheets must be filed as required by the instructions for that final cost report form, if used for budget purposes.

Since this form is used by HCPPs, HMOs, and CMPs, not all lines and columns will apply to all plans. This worksheet is only prepared in the submission of the Budget Forecast. If the prior year's final cost report submission is delinquent at the due date of the budget, the budget will be automatically rejected until the final cost report is submitted.

2303.1 Part I - Prior Year Cost & Statistical Data

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In the Part I heading, enter the fiscal year-end date from which all of the cost and statistical data reported in this part are taken. The prior year cost and statistical data must be taken from the period ending two (2) years prior to the budget period. For example, if the budget forecast is for the period January 1 through December 31, 2014, the final cost report for the period January 1 through December 31, 2012 will be used. Since the costs entered in columns 1 through 6 are taken from the final cost report covering the period January 1 through December 31, 2012, the plan should enter this period in the Part I heading. This final cost report should be used for all data requested in Part I.

Column and Line Descriptions

Column 1 - Trial Balance Per Books - Enter in this column the Trial Balance Per Books taken from Worksheet E, Column 1 of the prior year final cost report approved by CMS, plus or minus Reclassifications from Column 2. Cost data should be grouped using the same method of groupings used for Medicare costs on that prior year final cost report submitted to CMS. The amount for Part B Deductible and Coinsurance on Services Paid by CMS' Carriers reported on Line 16 of the prior year final cost report must be included with the amount reported for Nonprovider costs on the Budget Forecast Line 5. The elements of the Special Administrative Costs reported on Line 26 of the prior year final cost report must be broken out on Lines 7a thru 7c of the Budget Forecast.

Line 1 – 6 – Various Centers – Enter the cost incurred during the previous period, and reported on Worksheet E of the prior year final cost report.

Line 7A – Accretion/Deletion – Enter the cost incurred for the accretion/deletion of Medicare members into the plan.

Line 7b - Cost Report Certification - Enter the cost incurred for the independent certified public accountant to certify the final cost report submitted to CMS according to 42 C.F.R. §417.576(b)(1). This applies only to 1876 contracts (HMOs and CMPs).

Line 7c – Other – Enter the cost incurred for those services/items that are reimbursed 100% by Medicare. Supporting documentation for ‘Other’ costs should be provided at the time of submission.

Line 8 – Part B Costs Not Subject to Coinsurance – Enter the total Part B Costs Not Subject to Coinsurance reported on Worksheet M, Line 16a of the prior year final cost report.

Line 10 - Total Cost - The total cost on this line must equal Column 1, Line 29 on the Worksheet E of the prior year final cost report.

Column 2 - PMPM Cost - Enter on Line 0 the Total Member Months shown on the prior year final cost report Worksheet L, Column 5, Line 1. The worksheet formulas divide the cost on each line in Column 1 by the Total Member Months on Line 0 and the results are entered in this column, lines as appropriate.

Column_3 - Total Medicare PMPM Cost - The worksheet calculates the sum of Columns 4 plus 5 on the lines as appropriate.

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Column 4 - Medicare Part A PMPM Cost - Enter in this column the Medicare Part A cost PMPM taken from the appropriate lines of Worksheet M, Column 2 of prior year final cost report. This column is not applicable to HCPPs.

Line 10 - Total Cost - The total PMPM amount on this line must equal Column 2, Line 7 on the Worksheet M of the prior year final cost report.

Column_5 - Medicare Part B PMPM Cost - Enter in this column the Medicare Part B cost PMPM taken from the appropriate lines of Worksheet M, Column 3 of the prior year final cost report. The following cost centers should be combined on the Budget Forecast:

Part B Deductible on Services Paid by CMS' Carriers reported on Line 5a of the prior year final cost report must be included with the amount reported for Nonprovider costs in Column 5 on the Budget Forecast Line 5.

Medicare Bad Debts reported on Line 16 of the prior year final cost report must be included with the amount reported for Plan Administration costs in Column 5 on the Budget Forecast Line 6.

The elements of the Special Administrative Costs reported on Line 15 of the prior year final cost report must be broken out on Lines 7a thru 7c of the Budget Forecast.

Line 9 - Total Cost - The total PMPM amount on this line must equal Column 3, Line 7 plus Lines 15, 16, and 16a on the Worksheet M of the prior year final cost report.

Column_6 - Medicare Ratio - The worksheet calculates the ratio of the Medicare PMPM amounts to the total by dividing each line of Column 3 by each line of Column 2. All ratios must be rounded to 4 decimal places.

Column 7 - Medicare Part A Ratio - The worksheet calculates the ratio of the Medicare Part A PMPM Cost in Column 4 to the Total Medicare PMPM cost in Column 3. All ratios must be rounded to 4 decimal places.

2303.2 Part II – Budget Year Cost & Statistical Data

This part determines the interim payment rate by applying the ratios developed in Part I to the projected costs for the period covered by the Budget Forecast Report to derive the estimated Medicare costs for the period.

Projected costs shown in Column 1 of this part should be classified in the same manner as Column 1 in Part I (including reclassifications, and Part B Deductible and Coinsurance on Services Paid by CMS' Carriers included with the amount reported for Non-provider costs on Line 5) plus expected Third Party Revenue. The assumption being used in Part II is that the relative ratio of Medicare costs to total costs should remain fairly constant. Column 4 is provided for those instances where the relative ratio is expected to vary significantly for a given line item. Adjustments made in Column 4 must be supported by the attached worksheet.

Column and Line Descriptions

Column_1 - Total Projected Cost - Enter the projected trial balance of expenses for the period covered by the Budget Forecast Report. The cost data should be grouped using the same method of groupings used in Part I, Column 1. Please note that costs of Prescriptions covered by Part B, but are not reimbursed 100%, should be placed in Line 5 “Non-Providers”.

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Line 8 – Part B Costs Not Subject to Coinsurance - Enter in column 1 the amount of Part B costs not subject to coinsurance; such as, clinical diagnostic lab according to §1833(a)(2)(D) of the Social Security Act, services/drugs covered 100% by Medicare this includes flu and pneumonia shots. A worksheet showing how this amount was determined must be attached in order to include it in the budget forecast.

Column 2 - Projected PMPM Cost - Enter on Line 0 the Total Member Months projected for the period that were used in developing the projected trial balance of expenses in Column 1. The worksheet calculates the projected PMPM cost by dividing the costs in Column 1, lines as appropriate, by the Total Member Months on Line 0.

Column_3 - Medicare Projected PMPM Cost - The worksheet calculates the Medicare portion of the total costs PMPM by multiplying the Total Projected PMPM Cost in Column 1 by the prior period ratio of Medicare cost to total cost from Part I, Column 6, lines as appropriate.

Column 4 - PMPM Adjustment - The plan may adjust the costs calculated in Column 3 for any amount believed to be necessary to produce a more appropriate Medicare cost per member month for the budget period.

Adjustments can be positive and negative. Due to changing facts and circumstances, a plan may find it necessary to adjust the Medicare cost for a given period of time. These PMPM adjustment amounts must be calculated on the supporting worksheet and brought forward to Column 4 in this Part II. All rationale and backup information that verify the need and amount of the adjustment must be submitted with the Budget Forecast. Supporting documentation must be submitted, as noted in the Budget Forecast.

Column 5 - Adjusted Medicare PMPM Cost - The adjusted Medicare PMPM is calculated in this column by adding the amounts in Columns 3 plus 4 on the lines as appropriate.

Line 12 - Estimated Deductibles & Coinsurance - The worksheet enters on Line 11 the amount computed from Part III, Column 1, Line 15 minus Lines 13 and 14.

Line 14 - Pay% - This is the interim PMPM payment rate calculated on the worksheet by multiplying the total Medicare PMPM cost net of coinsurance and deductible on Column 5, Line 12 by the ratio of the Medicare Part B primary member months to the total Part B member months from Part IV, Column 2, Line 4.

Column 6 - Medicare Part A PMPM Cost - The Medicare Part A PMPM amounts are calculated by multiplying the total Medicare PMPM Cost in Column 5 by the prior period Medicare Part A Ratio determined in Part I, Column 7, on the lines as appropriate.

Line 9 - Third Party Insurer Revenue - These services pertain to only two categories of services for which Medicare has a secondary liability: (1) services covered by workers’ compensation; and (2) services covered by auto medical, no fault, or any liability insurance. The amount to be entered as "Third Party Insurer Revenue” must be determined by the Plan by multiplying the amount in Column 5 times the result of dividing the amount on the prior year final cost report Worksheet L, Column 1, Line 16 by Column 3, Line 16. A worksheet must be attached showing this calculation. The "Third Party Insurer Revenue" is the amount received for those services that are not paid fully by the insurer.

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Column 7 - Medicare Part B PMPM Cost - The worksheet calculates the Medicare Part B PMPM amounts by subtracting the PMPM amounts for Medicare Part A in Column 6 from the Total Medicare PMPM in Column 5 for each line in Column 7.

Line 12 - Estimated Deductibles & Coinsurance - The worksheet calculates the Standard Part B Deductible (Provided by CMS) and Coinsurance amount by subtracting the Standard Medicare Part A Deductible and Coinsurance in Column 6 from the Total Deductible and Coinsurance in Column 5.

2303.3 Part III - Deductible and Coinsurance

Part III is used to calculate the projected Medicare deductible, coinsurance, and copayment on covered Medicare benefits incurred by the Plan during the budgeted period.

Line Descriptions

Line 1 - Total Estimated Part A Deductible and Coinsurance - Enter in Column 2 the budgeted amount for Part A deductible and coinsurance. Attach a worksheet showing how this amount was determined.

Line 8 - Part B Standard Deductible - Enter in Column 3 the Part B Standard Deductible published by CMS for the budgeted period.

Line 9 - Part B Blood Deductible PMPM - Enter in Column 3 the projected Part B Blood Deductible PMPM for the budgeted period. Attach a worksheet showing the calculation of this amount.

Line 10 - Mental Health Copayment PMPM - Enter in Column 3 the Mental Health Copayment PMPM for the budgeted period. This is the professional component of the Mental Health Cost found on Worksheet L, Line 23 of the final cost report. Attach a worksheet showing the calculation of this amount.

Line 13 - Part B Coinsurance on Carrier Paid Bills PMPM - Enter in Column 3 the Part B Coinsurance on Carrier Paid Bills PMPM for the budgeted period. This is the same type of cost found on Worksheet G, Part I, Line 23 of the final cost report. Attach a worksheet showing the calculation of this amount.

Line 14 - Part B Coinsurance on Intermediary Paid Bills PMPM - Enter in Column 3 the Part B Coinsurance on Intermediary Paid Bills PMPM for the budgeted period. This is the same type of cost found on Worksheet G, Part I, Line 24 of the final cost report. Attach a worksheet showing the calculation of this amount.

2303.4 Part IV - Membership

Part IV is used to report the projected number of Medicare member months for the budgeted period.

Line Descriptions

Line 1 - Total Medicare Member Months - Enter the total projected number of Medicare member months, used to develop the budget, for Part A in Column 1 and for Part B in Column 2.

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Line 2 - Medicare Secondary Liability Member Months - The Medicare program is usually the primary payer for covered Medicare services provided to Medicare members of an HMO/CMP or an HCPP. However, there are four categories of services for which Medicare is secondary payer. These are:

(1) Services covered by worker's compensation;

(2) Services covered by employer group health plans in the case of end-stage renal disease beneficiaries during a period of up to 36 months;

(3) Services covered by auto medical, no fault, or any liability insurance;

(4) Services covered by employer group health plans in the case of employed beneficiaries and the dependents of the employed beneficiary

An HMO/CMP or HCPP need not coordinate benefits in situations where the probability of recovery is highly unlikely or the amount recoverable does not exceed the cost to pursue the claim. However, no payment will be made to a cost-based Plan for services to the extent that Medicare is not the primary payer under the provisions of Section 1862 (b) of the Social Security Act. In addition, no payment can be made for services not covered by Medicare. Therefore, enter on Line 2 the number of Medicare member months of those beneficiaries the plan has identified to CMS as a Medicare enrollee that can be classified in categories 2 and 4 above.

2303.5 Part V - Semi Annual-Fluctuations

Part V is provided to develop ratios that will be used in the Plans' Interim Cost Report. The unit of fluctuation ratio is the ratio of the total projected Medicare PMPM net of estimated deductible and coinsurance to the total cumulative PMPM for the first 6 months of the contract period. The ratio calculated by this worksheet in Column 2, Line 3 derives the Medicare PMPM amount in the Interim Cost Report that is used to establish the Interim Payment Rate. This part must be completed. Therefore, a submitted Budget Forecast without this part fully completed will be rejected as unacceptable.

Line Descriptions

Line 3 - Cumulative Estimate of Total Costs PMPM for First Two Quarters - Enter the Plan's estimate of the total costs (Medicare plus non-Medicare cost) on a per member per month basis that will be incurred by the plan during the first 6 months of the budget period.

2304 WORKSHEET B – DETERMINATION OF VOLUNTARY UNDER COLLECTIONS AND

PREMIUM DETERMINATIONS

This Worksheet is provided for HMO/CMPs and HCPPs to compute a voluntary under-collection and establish a premium that will cover all the projected costs in this budget on Worksheet A, all parts, recoup any under collections from a prior period, and/or adjust the current calculations for any over collections from the immediate prior period. Line 2 allows the inclusion of any prior under (over) collections.

NOTE: This worksheet is to be completed in conjunction with Worksheet A – Current Budget Forecast and

Worksheet N – Final Cost Report from the most recently completed final cost report.

Line Descriptions

Line 2 - Under(Over) Collection for the Period - Enter the amount of the under/over collection reported on Worksheet N, Column 3, Line 11 or 12b of the most recent Final Cost Report. For example, in preparing the

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Budget Forecast for contract year 2012, the period January 1 through December 31, 2010 is the most recent Final Report period. The under/over collection reflected on the Worksheet N, Part I, Column 3, Line 11 or 12b of the Final Report for the 2010 contract period is entered on this Line 2.

Any over collection from a prior period should be expressed as a negative number and any under collection should be expressed as a positive number.

Line 3 – Medicare Member Months for the Period – Enter the Medicare Member Months from the period reported on Worksheet L, Column 2, Line 1 of the Final Cost Report. For example, in preparing the Budget Forecast for contract year 2012, the period January 1 through December 31, 2010 is the most recent Final Report period. The Medicare Member Months reflected on Worksheet L, Column 2, Line 1 of the Final Report for the 2010 contract period is entered on Line 2.

Line 7 - Total Amount to be Charged Including Medicare Enrollee Copayments - Enter the PMPM amount the Plan intends to charge. A worksheet must be attached to support the determination of the amount. This worksheet must segregate the total amounts to be charged Medicare enrollees for covered services into two categories: 1) the monthly premium per Medicare enrollee for covered services, and 2) the average actuarial value of all deductibles, coinsurance, and co-payments for covered services to be charged each Medicare enrollee each month. This included Medicare enrollee co-payments collected by someone other than the plan (e.g. co-payments collected for a doctor office visit by the physician's office).

Note: The Total Amount to be Charged Including Medicare Enrollee Copayments, reported on Line 7, should not be greater than the Total Allowed to be Collected During the Budget Period, on Line 6. If the number entered on Line 7 is greater than the amount on Line 6 a warning message will be populated.

2305 WORKSHEET C - INTERIM REPORTING

In accordance with 42 C.F.R. 417.572(c)(1), an HMO or CMP must submit an interim cost report on a quarterly basis in the form and detail prescribed by CMS. These quarterly interim cost reports must be submitted no later than 60 days after the close of each quarter of the contract period. Under subsection 42 C.F.R. 417.572 (c)(2) CMS may reduce the frequency of the reports if CMS determines there is good cause for doing so.

Under 42 C.F.R.417.808(c), an HCPP must submit an interim cost report and enrollment data in the form and detail prescribed by CMS applicable to the first 6 months of the contract period. The interim cost report must be submitted no later than 45 days after the close of the first 6-month period.

Each interim cost report must be submitted using this Worksheet C and the Worksheet S indicating in Section 3 this is an interim report. These worksheets must be used by all HMOs, CMPs and HCPPs in order to fulfill their requirement to submit interim cost reports. The objective for submitting interim reports is to avoid having excessive balances due to or from the plan at the end of the reporting period. For HMO and CMP, the final interim cost report for the 12-month period of the contract must be filed on Worksheet S and D through M; the same worksheets for the final cost report submission.

2305.1 Part I - Costs

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All amounts entered in this part must be YTD cumulative amounts for the period being reported on. If the Plan is aware of circumstances that will likely occur and will have a material impact on costs after the interim reporting period, an adjustment should be made to reflect the estimated impact of this change on the interim per capita rate. Workpapers supporting the estimation of the impact adjustment must be submitted with the interim cost report; otherwise the adjustment will not be allowed.

Line Descriptions

Lines 1 through 8 - The amounts entered are actual amounts incurred in the interim reporting period. The trial balance underlying the amounts on these lines and showing the grouping of individual expense items into each cost center must be submitted with the interim cost report.

Line 9 - This line accumulates the actual total costs reported on Lines 1 through 8.

Line 10 - Cost per Member Month - The worksheet calculates the total per member month amount by dividing the total cost on Line 9 by the total member months in Part II, Line 1.

Line 11 - Ratio From Budget Forecast - Enter on this line the amount reflected on the Budget Forecast for the contract period on Worksheet A, Part V, Column 2, Line 3.

Line 12 - Medicare Costs - This is the Medicare PMPM amount calculated on the worksheet by multiplying the Total Cost PMPM amount on Line 10 by the Medicare ratio on Line 11.

Line 13 - Payment Rate - This is the Medicare primary payment rate calculated on the worksheet by multiplying the Medicare PMPM amount on Line 12 by the ratio of Medicare primary member month to the total Medicare member months in Part II, Line 5.

Line 14 - Current Payment Rate - Enter the current Medicare PMPM payment rate on this line.

2305.2 Part II - Membership

Member month amounts reported on these lines should reflect cumulative member months for the period covered by the report. A member month is defined as each month a person is a member of the plan. For example, if a Medicare beneficiary was a member of the plan for the six-month period covered by the interim cost report, the plan would report a total of six Medicare member months.

Line Descriptions

Line 1 - Total Member Months - Enter the total Medicare and non-Medicare member months on this line.

Line 2 - Total Medicare Member Months - Enter on this line the information requested for those Medicare enrollees that are enrolled in the Supplemental Medicare Insurance (Part B) Program under Medicare. Part B Member Months should always equal Total Medicare Member Months.

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Line 3 - Medicare Member Months (Secondary) - The Medicare program is usually the primary payer for covered Medicare services provided to Medicare members of an HMO/CMP or an HCPP. However, there are four categories of services for which Medicare is secondary payer. These are:

(1) Services covered by worker's compensation;

(2) Services covered by employer group health plans in the case of end-stage renal disease beneficiaries during a period of up to 36 months;

(3) Services covered by auto medical, no fault, or any liability insurance;

(4) Services covered by employer group health plans in the case of employed beneficiaries and the dependents of the employed beneficiary

An HMO/CMP or HCPP need not coordinate benefits in situations where the probability of recovery is highly unlikely or the amount recoverable does not exceed the cost to pursue the claim. However, no payment will be made to a cost-based Plan for services to the extent that Medicare is not the primary payer under the provisions of Section 1862 (b) of the Social Security Act. In addition, no payment can be made for services not covered by Medicare. Therefore, enter on Line 3 the number of Medicare member months of those beneficiaries the plan has identified to CMS as a Medicare enrollee that can be classified in categories 2 and 4 above.

Line 4 - Medicare Member Months (Primary) - The worksheet calculates the Medicare primary member months by subtracting the Medicare secondary member months on Line 3 from the total Medicare member months on Line 2.

Line 5 - Ratio - The worksheet calculates on this line the ratio of Medicare primary member months to the total Medicare member months. This ratio is used in Part I to determine the Medicare primary payment rate for the period being reported.

2306 WORKSHEET D - PLAN STATISTICS

Worksheet D is provided for HMO/CMPs and HCPPs to list the providers and suppliers that are frequently used by the plan. In addition, the statistics should be grouped appropriately so that they tie to Worksheet K. Statistics on WS D and K should have a direct relationship to the costs that flow to Column 6 on worksheet K.

Note: Please note that for the completion of this worksheet, all statistics should exclude any claims processed by MACs, Carriers, and Intermediaries.

2306.1 Part I - Plan Statistics - List Of Providers

This worksheet is provided for only HMOs/CMPs to list the providers that are frequently used by the plan.

HCPPs do not complete this worksheet since their reimbursement is limited to the reasonable cost of non-provider services covered under Part B of the Social Security Act. Therefore, HCPPs should mark Line 1 with N/A. HMOs/CMPs with bill processing option #1 reported in Worksheet S, Section 3b do not complete Sections A (Hospitals and SNFs) and B (HHA’s and Other).

Column Descriptions

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For the category descriptions below the "LIST OF PROVIDERS" column for plans with bill processing option #2 only, list all hospitals and skilled nursing facilities rendering services to the plan's Medicare enrollees under category "A. HOSPITALS & SNFS”. List all Home Health Agencies under category “B. HHA” and all others (specifying Name & Type) under category “C OTHER (SPECIFY NAME AND TYPE)" on the continuation page of Part I - Plan Statistics - "LIST OF PROVIDERS."

Column_1 – Provider Number - Enter the Medicare provider billing number assigned to the provider.

Column 2 – Relationship - Enter the relationship code for that provider. If the provider is owned or controlled by the plan or if the plan is owned or controlled by the provider, enter the code ”O.” For a full description of Medicare's rules defining “ownership” or "control", refer to the Provider Reimbursement Manual (HCFA PUB 15-I) Chapter 10. Where the code “O” is entered, the Worksheet H, Section A. must be answered “Yes.” If there is no relationship between the plan and the provider other than contractual, enter the code “P”.

Column_3 – Bills Processed By - Enter the code (“H” or “P”) representing the bill processing option selected by the plan. If the plan has elected to process the bills (Option 2) of the provider, enter the code “P”. If the plan has elected to have CMS process the bills (Option 1) of the provider, enter the code “H”. This coding must be consistent with that reported In Section 3b on Worksheet S. For a description of the different options available, refer to Chapter 17a, Subchapter A, Section 10.2 of the Medicare Managed Care Manual (HCFA Pub 100.16).

Column 4 – Total Days - For category A, "Hospitals & SNFs", enter the total number of inpatient days used by all enrolled plan members. This figure should include all of the days used whether or not the plan has been billed by the provider due to timing delays. For categories B and C, enter the total statistical unit for all enrolled plan members used to apportion the costs of that provider type.

Column 5 – Total Medicare - For category A, "Hospitals & SNFs", enter the total number of inpatient days for all Medicare enrollees. For categories B and C, enter the total applicable statistical units for all Medicare enrollees.

Column 6 – Covered Medicare Primary - The Medicare program is usually the primary payer for covered Medicare services provided to Medicare members of an HMO/CMP. However, there are four categories of services for which Medicare is secondary payer. These are:

(1) services covered by workers’ compensation;

(2) services covered by employer group health plans in the case of end-stage renal disease beneficiaries during a period of up to 12 months;

(3) services covered by auto medical, no fault, or any liability insurance; and

(4) services covered by employer group health plans in the case of employed beneficiaries and the dependents of the employed beneficiary.

An HMO/CMP need not coordinate benefits in situations where the probability of recovery is highly unlikely or the amount recoverable does not exceed the cost to pursue the claim. However, no payment will be made to a cost-based HMO/CMP for services to the extent that Medicare is not the primary payer under the provisions of Section 1862 (b) of the Social Security Act. In addition, no payment can be made for services not covered by Medicare.

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Therefore, enter in Column 6 the number of days or statistical units used by Medicare enrollees for which Medicare has primary liability and the days or statistical units that are covered by the Medicare program. Make certain to include in this column services covered by employer groups (categories 2 and 4). The cost of these services will be removed through the apportionment on Worksheets K, L and M.

Column 7 – Covered Medicare Secondary - Enter only those inpatient days or statistical units for which Medicare has no liability for categories 1 and 3 mentioned above. Refer to Chapter 17, Subchapter B, Sections 310 through 350, and Subchapter F, Section 70 of the CMS Managed Care Manual Pub #100-16 for a detailed discussion of the coordination of benefits provisions under Medicare. Non-covered services should not be included in Column 7. Therefore, the addition of Column 6 plus Column 7 will be less than Column 5 by the number of non-covered inpatient days or statistical units used by the Medicare enrollee.

There are circumstances where plans are able to isolate the costs and statistical units of non-covered services and/or those services for which Medicare is secondary payer. The plan may elect to exclude those statistical units from the total on Worksheet D, Part I, Column 4 and the costs associated with them from total costs on Worksheet E through adjustments on Worksheet G. If that election is made then it must be disclosed in the footnotes to the HMO/CMP certified cost report. Where this occurs, Columns 5 and 6 on these Worksheets will be the same amount and there will be no entry in Column 7.

2306.2 Part II - Plan Statistics – List Of Suppliers

This worksheet is provided for all plans, including HCPPs, to list the suppliers that are frequently used by the plan's membership (i.e. the most utilized). The column headings for Columns 4 through 7 are the same as those for the "LIST OF PROVIDERS" (see § 2306.1 above). These suppliers shall be separated by the CMS APPROVED type of statistic used to apportion your costs on Worksheet K. For example if you are currently approved to use “FFS” as your allocation statistic for the Physician Group Cost Center, you must use “FFS” as your apportionment statistic regardless of the arrangement. However, if you have prior approval for the use of multiple statistics in one cost center, please separate as suggested in the following example. Example: Fee For Service arrangements should be listed individually or grouped together if the providers use the same statistic for utilization; however, a Capitated arrangement that has separate statistics for utilization (e.g. Visits, encounters, claims) should be listed on a different line and shall not be included under the Fee For Service line. Be careful of Capitated arrangements that may have different statistics (ex. Encounters/visits vs. claims) as this is a different statistic as well. The utilization statistic between the plan and provider determines which providers should be grouped together. If there are various statistics that cannot be grouped under either Fee For Service or Capitation (ex. RVU’s, Claims, Services, etc.) then Option “C-Other-Specify” should be used. The plan should then specify what type of statistic is used on Worksheet K column 1.

Line Description

For the category descriptions below "LIST OF SUPPLIERS", list all suppliers of health services rendering services to the plan's Medicare enrollees as follows:

Category A -Physician Services Category B -Certified Labs Category C -X-ray units Category D -Others (Specify Type)

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All related suppliers should be identified by placing an “R” next to its name.

Column 1 – Type of Group - Enter the type of supplier that can be grouped by using the following codes:

A = IPA

B = Group Practice C = Staff * D = Individual Practitioners**

* All services rendered by the staff of the plan should be grouped on one line in each category (if necessary) and identified as either "staff" or "clinic".

** All individual practitioners should be grouped on one line in each category if the plan uses the same statistic and identified as "Individual Practitioners”.

Column 2 – Payment Mechanism and Column 3 – How Physicians Paid - For each supplier listed, identify the method the plan is paying the supplier (Column 2) and the method the supplier is paying physicians (Column 3). Use the following codes:

"A” for fee-for-service payments

"B" for capitation payments

"C" for other methods - specify the type of method being used

Please note that the Letter Codes entered into Columns 1 & 2 are REQUIRED, and will be used to summarize the data entered at the bottom of each section. If Columns 1 & 2 are not entered, the data will not be included in the summary. The summary data is transferred to Worksheet K, which will ensure that Worksheets D and K match as is required. Group/Payment type allows for one statistic to be used. If you have approval and require additional statistic types within a Cost Center, please contact your CMS servicing auditor for direction.

For Column 3 only, use “D" when the plan is an HCPP, a physician group pays its physicians on a fee-for-service basis, and an exception to the Subpart E limits has been granted. The exception would be granted under 42 C.F.R. 417.802 after CMS has determined that the Physician Group has an agreement that includes acceptance by its members, to effective incentives designed to avoid unnecessary or unduly costly utilization of health services. A copy of the determination letter must be attached to Worksheet D.

For Column 4 only, The plan should have indicated whether CMS has determined that the physician group has an agreement, that includes acceptance by its members, to effective incentives designed to avoid unnecessary or unduly costly utilization of health services. A copy of the determination letter should be attached to this Worksheet D and Column 4 for that physician group should not be completed.

Category E – Membership

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Column_1- Medicare Part A - Enter the information requested for those Medicare enrollees that are eligible to receive payment for covered services under Part A of the Medicare Program.

Column 2 – Medicare Part B - Enter the information requested for those Medicare enrollees that are enrolled in the Supplemental Medicare Insurance (Part B) Program under Medicare. Part B Member Months should always equal Total Medicare Member Months.

Line Descriptions

Line 1 – Total Medicare Member Months - Enter in the appropriate column Medicare enrollee member months. A member month is defined as each month a person is a member of the plan. For example, if a Medicare beneficiary was a member of the plan for the twelve month period covered by the report, the plan would report a total of 12 Medicare member months for that individual.

Line 2 – Medicare Secondary Liable (Employee Groups) Member Months - Enter the number of member months of Medicare enrollees who are members of an employer group and Medicare is secondarily liable for their services. These are the Medicare member months associated with Categories (2) and (4) described above in Section 2306.1 Part I - Plan Statistics - List Of Providers for the Column 6 description.

Line 3 – Medicare Primary Member Month - The worksheet calculates the Medicare primary member months by subtracting the Medicare secondary liable member months on Line 2 from the total Medicare member months on Line 1 for each column.

Line 4 - Ratio – The worksheet calculates the ratio of the Medicare primary member months to total Medicare member months by dividing Line 3 by Line, 1. All Ratios must be reported to four decimal places.

2307 WORKSHEET E - SUMMARY TRIAL BALANCE

This worksheet is provided to:

• Record the operating expenses of the Plan according to Generally Accepted Accounting Principles,

• Summarize reclassification and adjustments of expenses in accordance with the Medicare Principles of

Reimbursement, and

• Establish the ful1 cost of services for Medicare apportionment after reclassification into the appropriate cost center..

The necessary reclassifications and adjustments needed for certain accounts detailed and summarized on Worksheets F and G are brought forward to this worksheet. The allocation of Administrative and General (A & G) costs on Worksheet I are brought forward to this worksheet after the reclassifications and adjustments are made. Cost allocations are made in this cost report in two steps:

1. Functional allocations to cost centers

2. Pool allocation of remaining A & G costs

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* Direct allocations may also be accomplished but must be made as prescribed in Section 2307 A. of the Provider Reimbursement Manual (HCFA PUB 15-I).

The cost centers on this worksheet are listed in a manner to facilitate the transfer of costs to subsequent worksheets. Column 7 displays the worksheet and line number reference to which each entry in Column 6 is transferred. Not all of the cost centers will apply to all plans.

Column and Line Descriptions

Column 1 – Trial Balance - Enter on the appropriate lines the total costs the plan incurred during the reporting period. These costs that are entered must agree with the plan's audited accounting records maintained under Generally Accepted Accounting Principles without any adjustments. The plan must maintain a worksheet that groups costs from the audited trial balance of expenses to the various cost centers on this worksheet. Any needed reclassifications, adjustments and allocations must be recorded in Columns 2, 3, and/or 5, as appropriate.

Column 2 – Reclassifications (Wkst F) - Reclassification made among the cost centers in Column 1 which are needed to affect proper cost allocations are brought forward from the summary on Worksheet F, Page 5. The Worksheet F series has been provided to help the plans complete the reclassifications needed which affect the appropriate cost centers. Reductions to cost centers should be shown in brackets ( ). The net total of the entries in Column 2 must equal zero on Line 29.

Column 3 – Adjustments (Wkst G) – The adjustments summarized on Worksheet G, Part I are brought forward to the appropriate lines in Column 3. The amounts of any adjustments are those needed to determine allowable costs for apportionment under the Medicare Principles of Reimbursement. The Worksheet G series and Worksheet H (if applicable) are provided to help the plans to complete the proper adjustments to the costs recorded in Column 1 in accordance with the Medicare Principles of Reimbursement.

Column_4 – Allowable Costs – The cost report calculates adjustments to Column 1 made in Columns 2 and 3 and enters the net balance to Column 4.

Column 5 – A&G Allocation (Wkst I, Part I) – The cost report brings forward the amounts resulting from the allocation of Administrative and General Costs shown on Line 28 Column 4 from the Worksheet I, Part I.

Worksheet I is provided to allocate A & G costs to those cost centers receiving a benefit from the A&G costs.

Reductions to cost centers must be shown in brackets ( ). The net total of the entries on Column 5 must equal zero on Line 29.

Column 6 – Totals – The allocated A&G costs in Column 5 are adjusted to the amounts in Column 4 and extend to Column 6.

Lines 1 and 2 – Inpatient and Outpatient Hospital - Enter on these lines the costs incurred by the plan, and reflected in the accounting records, for services furnished through a Hospital. Only Plans electing billing option #1 in section 3(b) on Worksheet S, may use these forms. Those Plans electing Billing Option 2 must use the CMS alternative Worksheets E through M. Instructions for these Option 2 alternative worksheets are included as Appendix A.

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Lines 3 and 4 – Other Provider Costs - Enter on the appropriate lines the cost of services incurred by the plan, and reflected in the accounting records, for services furnished through a Skilled Nursing Facility or Home Health Agency. Adjustments on Worksheet G must be made to Lines 3 and 4 that include those adjustments necessary to remove the cost of non-covered services and the cost of services to non-Medicare patients. As a result of these adjustments, only the reimbursable portion of Skilled Nursing Facility or Home Health Agency services will be reflected in Column 4 and will flow to Worksheet J from Column 6 after cost finding.

Lines 5 thru 13a – Non-Provider Costs - Enter on the appropriate lines the cost of services incurred by the plan, and reflected in the accounting records, for services furnished by a non-provider. Separate lines are provided for the different types of suppliers of services. Services may be furnished by the plan through its own employees, under arrangements with related and/or unrelated parties, or a combination of both. Payment arrangements with each non-provider type and/or service arrangement may vary. If this occurs and the plan has approval from CMS to fragment the apportionment for a specific type(s) of payment and/or service arrangement on Worksheet K, then these lines must be subscripted for each of the specific type of payment and/or service arrangement consistent with those on Worksheet K.

Line 14 - Emergency-Urgently Needed Services - Enter the costs of services furnished in an emergency or urgently needed situation that were provided out-of-plan on an infrequent basis. Services of this type that were furnished by in-plan providers or suppliers would be entered on Lines 1 through 13, as appropriate. The cost of those services that would be entered on Lines 1 through 13 but were furnished out-of-plan in an emergency or urgently needed situation will be recorded on this line.

Line 15 – Mental Health Services - Enter on Line 15 the cost of both the professional and non-professional…