CAH Method II Election - JE Part A

The Medicare Prescription Drugs, Improvement, and Modernization Act (MMA) of 2003 allows a CAH to elect the Method II payment option for outpatient professional services, which allows the CAH to be paid 115% of what would otherwise be paid under the fee schedule. In the past, this was an annual election and was elected for each cost reporting period.

Electing Method II

Per the August 16, 2010 Federal Register, Vol. 75, No. 157, p.50359–50361, effective for cost reporting periods beginning on or after October 1, 2010, if a CAH has elected Method II for its most recent cost reporting period beginning prior to October 1, 2010, that election will remain in place until it is terminated. However, it is necessary to continue to submit 855I forms for any newly hired/contracted practitioners that you wish to bill Method II for.

Per the August 16, 2010 Federal Register, Vol. 75, No. 157, p.50361, in addition to notifying the MAC of the election, you must also notify the MAC when changes in reassignment occur.

A CAH who is not currently a Method II provider may elect this payment option by submitting a written election postmarked no less than 30 days before the start of its cost reporting period, a list of practitioners by specialty that will be billed under Method II, and copies of the 855I forms for all practitioners on this list. These requirements are found in CMS Internet Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual, Chapter 4, Section 250.2

The written election should also clearly state whether or not the CAH chooses to include any CRNAs in Method II billing. If the CAH has received the CRNA exemption but chooses to include CRNAs in Method II, the CAH gives up the exemption for both outpatient as well as inpatient services.

An attestation for each practitioner who has completed an 855I form must remain on file at the CAH. This attestation must clearly state the practitioner will not bill the carrier for any services rendered at the facility once the reassignment has been given. The CAH does not need to submit these attestations with the election letter, practitioner listing and 855I forms.

The Method II election remains in effect until the CAH wishes to terminate it. If the provider hires or contracts with any new practitioners and wants to bill Method II for them, a copy of the 855I and a note stating the practitioner's specialty must be submitted.

Terminating a Method II Election

If a CAH wishes to terminate its Method II election, it must submit its termination request at least 30 days before the start of the next cost reporting period.

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