Lifetime Reserve Days and Long Term Care Hospital (LTCH)

30.6 – Lifetime Reserve Days and Long Term Care Hospital (LTCH) Prospective Payment System (PPS) (Rev. 1, 10-01-03) When a Long Term Care Hospital inpatient stay triggers a full LTC-DRG payment (i.e., it exceeds the short-stay outlier threshold), Medicare’s payment is for the entire stay up to the high cost outlier threshold, regardless of patient coverage. But for lengths of stay equal to or below 5/6 of the average length of stay for a specific LTC-DRG, Medicare’s payment is only for covered days. For a LTC-DRG where the ALOS is 30, 25 days (5/6 of 30) would be the short-stay outlier threshold. If a patient’s stay is 25 days or less, Medicare will pay it as a short-stay outlier. So, if for example, a patient has only 15 remaining days of Medicare coverage and stays 24 days in the LTCH, Medicare will only pay for 15 days (under the short-stay policy). If the patient has 27 days remaining of Medicare coverage and stays for 26 days, Medicare would pay a full LTCDRG. In this scenario, the patient’s length of stay exceeded the short stay outlier threshold and the patient also had sufficient Medicare covered days to generate a full LTC-DRG payment, which would constitute Medicare payment until and unless the stay had become a high cost outlier. Once the beneficiary exceeds the 5/6 short-stay outlier threshold and receives the full LTC-DRG payment, consistent with IPPS, the remaining days of the stay (and associated charges) are considered covered until the high cost outlier is reached even though the beneficiary may have already reached the 90th regular Medicare covered day within the benefit period. Once the beneficiary reaches the high cost outlier threshold, the beneficiary may choose to use the lifetime reserve days. The beneficiary has no coinsurance (or any other) liability for the gap between the 90th day and the start of lifetime reserve days. Policy regarding the use of lifetime reserve days is the same as under the IPPS. In the case of a stay that is categorized as a short-stay outlier for payment purposes (because the patient has run out of regular benefit days prior to exceeding the short-stay outlier threshold of 5/6 of the ALOS for the specific LTC-DRG), the remaining days of the patient’s stay will be counted against the beneficiary’s lifetime reserve days (in the absence of an election not to use them) for the remainder of the episode of care, that is, until either the patient is discharged or the life-time reserve days are exhausted. Once a beneficiary starts using lifetime reserve days, each remaining day of hospitalization for that episode of care will be counted against those reserve days, even if no additional Medicare payments are generated until the high cost outlier threshold is reached. Consistent with the policy under IPPS, Medicare will pay for high cost outlier payments only for covered days, that is, days for which the beneficiary has either regular benefit days or life-time reserve days for the period (or portion) of the stay beyond the high cost outlier threshold, for example: EXAMPLE 7: Mr. Kidd is admitted to the LTCH with 26 remaining days of regular Medicare coverage and is grouped to a LTC-DRG with an ALOS of 30 days. On the 26th day of that stay, Mr. Kidd has sufficient regular benefit days to trigger a full LTC-DRG payment (greater than 5/6 of the ALOS for that LTC-DRG) for this stay without going into lifetime reserve days. Mr. Kidd would only need to consider using lifetime reserve days should the stay continue and ultimately become a high cost outlier. EXAMPLE 8: Mr. Adams is grouped to the same LTC-DRG as Mr. Kidd but has only 10 remaining days of regular Medicare coverage. Lifetime reserve days will be used for the entire remainder of the stay (unless Mr. Adams elects not to use them and to otherwise assume responsibility for payments as a private pay patient) and the day count will continue, uninterrupted, until the patient is either discharged or the days are exhausted.