CMS has issued a new transmittal which outlines the method for choosing and calculating your hospice's aggregate annual cap.

The transmittal updates chapter 9 of the Medicare Benefit Policy Manual. It outlines the two calculation methods and gives examples of how they would be applied.

The original calculation method, now referred to as the "streamlined method," lumped all patients into one cap year even when their services continued into a second year. Now, hospices have the option to elect the so-called "proportional method," which would apportion patients based on the number of days they spent on service in each cap year.

It's important to consider very carefully which calculation method you want to choose. CMS makes it very clear that it will not allow hospices to switch back and forth between calculation methods, as this "could lead to inappropriate switching by hospices seeking merely to maximize Medicare payments."

For the full transmittal, go here. For more details, see an upcoming issue of HHL.