Medicare Advantage (MA) Critical Access Hospital Cost Settlement for In-Network Providers

Medicare makes estimated (interim) payments to hospitals and clinics when claims are submitted which are at least partially reimbursed based on their reasonable costs rather than a fee schedule. The Medicare Fiscal Intermediary/Administrative Contractor (MAC) will attempt to make the interim payments as accurate as possible. 

After the hospital’s fiscal year end, the fiscal intermediary settles with the providers for the difference between interim payments and actual reasonable costs. 

CMS policy does not require plans to agree to settle with providers. However, when requested, Blue Cross and Blue Shield of Nebraska (BCBSNE) conducts settlements on hospital claims for BCBSNE Medicare Advantage members. This occurs when provisions of the Original Medicare reimbursement system are not accounted for through the normal claims vouchering system (for example, disproportionate share, bad debt, capital for a new hospital for first two years, etc.). Critical access hospital settlements include both inpatient and outpatient claims for BCBSNE Medicare Advantage members. All other outpatient reimbursement issues should be referred to your BCBSNE provider consultant. 

To minimize financial impact of the settlement and to ensure proper reimbursement throughout the year, hospitals are expected to retrieve their current year rates from the Fiscal Intermediary/MAC and submit their rate letter (or system equivalent) to ProviderExecs@NebraskaBlue.com within 60 days of being published by the MAC. 

BCBSNE pays Critical Access Hospital claims on an interim basis using the per diems and percentage of charges stipulated in the Fiscal Intermediary/MAC interim rate letter applicable to the date on which services are rendered. The cost-based reimbursement rate and elected payment method used for the year under review are compared to the rate calculated on the Medicare Cost Report. The settlement amount is based on the difference between the reimbursement rate and the calculated rate. Once a hospital elects to engage in the settlement process, all subsequent years will need to be settled in a like manner. 

BCBSNE conducts settlements on a hospital’s full fiscal year at the appropriate Medicare rate based on discharge date. BCBSNE reviews the Medicare Cost Report, the specific claims submitted for review, and the interim rate letters to determine the cost settlement. 

Critical Access Hospitals whose claims were not adjusted at the time of receiving the rate letter by BCBSNE, can request a settlement from BCBSNE in writing within 180 days of the hospital’s fiscal year-end, and must include all the following information:

• A description of the issue
• An estimate of the impact amount of the settlement amount 
  • Calculations showing how the impact amount was determined 
• Supporting documentation including (as appropriate) 
  • The filed Medicare Cost Report for the year in question 
  • The Medicare interim rate letter (or system equivalent) for the applicable time period 
  • A detailed BCBSNE claims list 

BCBSNE reviews the information and gives a written determination of funds owed the provider from BCBSNE or funds owed BCBSNE from the provider. Payment of the settlement will be due by either party within 60 days after final terms of the settlement are agreed upon.