§ 512.655 Proration of payments for items and services that extend beyond an episode.
(a) General. CMS prorates items and services included in the episode that extend beyond the episode so that only those portions of the items and services that were furnished during the episode are included in the calculation of the actual episode payments.
(b) Proration of items and services. CMS prorates payments for items and services that extend beyond the episode for the purposes of calculating both baseline episode spending and performance year spending using the following methodology:
(1) Non-IPPS inpatient items and services. Non-IPPS inpatient items and services that extend beyond the end of the episode are prorated according to the percentage of the actual length of stay (in days) that falls within the episode.
(2) Home health agency items and services. Home health agency items and services paid under the Medicare prospective payment system in accordance with part 484, subpart E of this chapter that extend beyond the episode are prorated according to the percentage of days, starting with the first billable service date and through and including the last billable service date, that occur during the episode.
(3) IPPS items and services. IPPS items and services that extend beyond the end of the episode are prorated according to the MS-DRG geometric mean length of stay, using the following methodology:
(i) The first day of the IPPS stay is counted as 2 days.
(ii) If the actual length of stay that occurred during the episode is equal to or greater than the MS-DRG geometric mean, the full MS-DRG payment is allocated to the episode.
(iii) If the actual length of stay that occurred during the episode is less than the MS-DRG geometric mean length of stay, the MS-DRG payment amount is allocated to the episode based on the number of inpatient days that fall within the episode.
(4) If the full amount of the payment is not allocated to the episode, any remainder amount is allocated to the post-episode spending calculation (defined in § 512.650(c)(7)).