§ 1181.254a. Medicare Part B adjustments—statement of policy.
(a) Option 1
(1) To qualify for Option 1, the facility shall:
(i) Exclude operating and capital costs incurred to provide Medicare Part B services.
(ii) Attach a copy of its Medicare cost report when it submits its MA-11.
(2) The MA-11 should contain the adjustments excluding the incurred Medicare Part B costs and those adjustments should be included in the decreasing adjustments made on Schedule C.
(3) If the Medicare cost report or the Medicare audit report is not submitted with the MA-11, the facility cannot qualify for Option 1, and § 1181.254(a)(3) (relating to Medicare Part B type services) will apply at audit unless the facility has also qualified for Option 2 at § 1181.254(a)(2).
(4) If a facility does submit the Medicare cost report with the MA-11 and its MA-11 contains the adjustments required by Option 1, the facility can qualify for Option 1 as long as the auditors can verify and reconcile the costs on the Medicare cost report to the adjustments made on the MA-11. At audit, if the Medicare audit of the submitted Medicare cost report is available, it shall be provided for the auditors’ use.
(5) If there is a discrepancy between the costs on the Medicare cost report—or, if available, the Medicare audit report—and the adjustments made by the facility on the MA-11, the auditors will make reconciling adjustments if there is sufficient detail in the MA-11 and the facility’s books and records to support the reconciliation. However, if the auditors are not able to substantiate a basis for reconciliation, the auditors will not apply § 1181.254(a)(1), and will reverse the adjustments to reported costs on the MA-11 for Medicare Part B services made by the facility in the facility’s efforts to claim treatment under Option 1 and apply § § 1181.254(a)(2) or (3), as appropriate.
(b) Failure to claim Medicare Part B.
(1) If a service is covered by Medicare Part B but reimbursement is not claimed or received from Medicare Part B because of facility error or policy, a facility may not receive reimbursement from the Medical Assistance Program in excess of that which it could receive had the Medicare Part B payments been received. The facility is obligated to know whether a recipient has Medicare Part B coverage and a duty to seek payment for covered services whether or not the facility is a participating provider in the Medicare program. Those services affected by § 1181.254 and § 1181.274 (relating to direct provider payments not includable in costs) are presumed to be coverable by Medicare Part B unless Medicare Part B has determined that they are not.
(2) At audit, a facility shall be able to document that costs affected by § § 1181.254 and 1181.274, but claimed for reimbursement, were incurred either for services not covered by Medicare Part B or were incurred with respect to patients not covered by Medicare Part B or other insurance resources. If a facility is not able to document this basis for the inclusion of these costs, they will be adjusted at audit where § 1181.254(a)(3) applies, by a below the line offset of the costs claimed on the MA-11.
Source The provisions of this § 1181.254a adopted June 17, 1988, effective June 22, 1988, and pertains to all cost reports, unaudited or to be settled, having reporting periods subsequent to July 1, 1983, 18 Pa.B. 2732.
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