All Fiscal Intermediaries (FIs) and All A/B Medicare Administrative Contractors (MACs) It has come to the attention of the Centers for Medicare & Medicaid Services (CMS) that some Method II (Optional Method) CAHs that wish to continue to be paid at 101 percent of reasonable cost for facility services plus fee schedule for professional services are failing to renew their Method II elections on an annual basis. This joint signature memorandum/technical direction letter (JSM/TDL) clarifies the annual election instructions in Chapter 4, §§ 250 and 250.2 of Pub.100-04 Medicare Claims Processing Manual. The instructions in §§ 250 and 250.2 are clarified in Change Request 5376 which was issued on November 9, 2006. The election of Method II must be made in writing, made on an annual basis, and delivered to the FI or A/B MAC servicing the CAH at least 30 days before the start of the cost-reporting period for which the election is made. An election of the Method II payment, once made for a cost-reporting period, remains in effect for all of that cost-reporting period and, effective for cost-reporting periods beginning on or after July 1, 2004, applies to all services furnished to outpatients during that period by a physician or other practitioner who has reassigned his or her billing rights to the CAH. Unless the CAH elects to be paid for services to its outpatients under Method II on an annual basis, payment will be made under Method I, cost-based facility services with billing to the carrier for professional services. CMS Joint Signature Memorandum (JSM)-07071 (November 16, 2006) Posted: 11/20/2006 CPT codes, descriptions, and other data only are copyright 2006 American Medical Association (or such other date of publication of CPT). All Rights Reserved. Applicable FARS/DFARS Apply.
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