§ 512.650 Reconciliation process and determination of the reconciliation payment or repayment amount.
(a) General. Providers and suppliers furnishing items and services included in the episode bill for such items and services in accordance with existing Medicare rules.
(b) Reconciliation process.
(1) Six months after the end of each performance year, CMS performs a reconciliation calculation to establish a reconciliation payment or repayment amount for each CJR-X participant in the applicable performance year as described in paragraph (c) of this section.
(2) For CJR-X participants that experience a reorganization event in which one or more hospitals reorganize under the CCN of a CJR-X participant, CMS performs both of the following:
(i) Separate reconciliation calculations for each predecessor CJR-X participant for episodes where the anchor hospitalization admission or the anchor procedure occurred before the effective date of the reorganization event.
(ii) Reconciliation calculations for each new or surviving CJR-X participant for episodes where the anchor hospitalization admission or anchor procedure occurred on or after the effective date of the reorganization event.
(c) Calculation of the Net Payment Reconciliation Amount (NPRA). CMS compares the reconciliation target prices described in § 512.645 and the CJR-X participant's performance year spending to establish an NPRA for the CJR-X participant for each performance year as follows:
(1) CMS determines the performance year spending for each episode included in the performance year (other than episodes that have been canceled in accordance with § 512.630(b)) for each MS-DRG/HCPCS episode type using claims data that is available 6 months after the end of the performance year.
(2) CMS calculates and applies the high-cost outlier cap for performance year episode spending by applying the calculation described in § 512.640(b)(4) to performance year episode spending for each MS-DRG/HCPCS episode type.
(3) CMS applies the adjustments specified in § 512.645 to the preliminary target prices calculated in accordance with § 512.640 to determine the reconciliation target prices for each MS-DRG/HCPCS episode type.
(4) CMS aggregates the reconciliation target prices determined in accordance with paragraph (c)(3) of this section for all episodes included in the performance year (other than episodes that have been canceled in accordance with § 512.630(b)).
(5) CMS aggregates the adjusted performance year spending amounts determined in paragraphs (c)(1) through (2) of this section and subtracts the resulting amount from the aggregated reconciliation target price amount determined in paragraphs (c)(3) through (4) of this section.
(6) CMS applies stop-loss and stop-gain limits to the amount calculated in paragraph (c)(5) of this section as follows:
(i) Limitation on loss. For CJR-X participants, except as provided in paragraph (d)(3) of this section, the repayment amount for a performance year cannot exceed 20 percent of the aggregated reconciliation target price amount calculated in paragraph (c)(4) of this section for the performance year. The post-episode spending calculation amount in paragraph (c)(7) of this section is not subject to the limitation on loss.
(ii) Limitation on gain. For CJR-X participants, the reconciliation payment amount for a performance year cannot exceed 20 percent of the aggregated reconciliation target price amount calculated in paragraph (c)(4) of this section for the performance year. The post-episode spending amount calculated in paragraph (c)(7) of this section is not subject to the limitation on gain.
(iii) Additional limitation on loss for certain hospitals. The repayment amount for the following types of CJR-X participants as defined at § 512.605, cannot exceed 5 percent of the aggregated reconciliation target price amount calculated in paragraph (c)(4) of this section:
(A) Medicare-dependent, small rural hospital (MDH).
(B) Rural hospital.
(C) Safety net hospital.
(D) Sole community hospital (SCH).
(7) CMS calculates the post-episode spending amount. If the average post-episode spending amount for a CJR-X participant in the performance year being reconciled is greater than 3 standard deviations above the regional average post-episode spending amount for the performance year, then the post-episode spending amount that exceeds 3 standard deviations above the regional average post-episode spending amount for the performance year is subtracted from the NPRA for that performance year.
(d) Reconciliation payment amount or repayment amount.
(1) Excluding CJR-X participants that receive a below acceptable composite quality score, as specified in § 512.645(h), if the amount calculated in paragraph (c) of this section is positive, CMS pays the CJR-X participant a reconciliation payment equal to the amount described in paragraph (c) of this section.
(2) If the amount calculated in paragraph (c) of this section is negative, the CJR-X participant for the applicable performance year must pay to CMS a repayment equal to the amount described in paragraph (c) of this section.
(e) CJR-X reconciliation report. CMS issues each CJR-X participant a CJR-X reconciliation report for the performance year. Each CJR-X reconciliation report contains the following:
(1) The total performance year spending for the CJR-X participant.
(2) The CJR-X participant's reconciliation target prices.
(3) The CJR-X participant's reconciliation amount.
(4) The CJR-X participant's composite quality score calculated in accordance with § 512.635(b).
(5) The CJR-X participant's quality-adjusted reconciliation amount.
(6) The stop-loss and stop-gain limits that apply to the CJR-X participant.
(7) The CJR-X participant's NPRA.
(8) The CJR-X participant's post-episode spending amount, if applicable.
(9) The reconciliation payment amount or repayment amount for the performance year, if applicable.