Reader Question: Cost Outliers

Question: According to PM Transmittal A-01-41 APC, we can bill cost outliers when cost exceeds 2.5 times the APC reimbursement. Apparently we can also get reimbursed 75 percent of the difference between the APC payment and our cost. Is there software for calculating this, or must we apply an occurrence code to the UB-92 as is the case for inpatient billing?

Maine Subscriber

Answer: As defined in A-01-41, the transitional pass-through payment for a device will continue to be based on the charge on the individual bill reduced to cost and subject (in some instances) to a deduction that represents the cost of similar devices already included in the APC payment rate. Such deductions are made by Medicare PRICER software in processing the claim. Therefore, you would bill the drug with your associated charge, and Medicare will determine whether it would be paid. Although the payment for many drugs is included in the procedure APC payment rate, Medicare will use the information from your submittal to track utilization and cost for future APC payment consideration.


- Published on 2001-06-01