We make direct graduate medical education (DGME) payments to teaching hospitals or hospitals that train residents in approved medical allopathic, osteopathic, dental, or podiatry residency programs. These payments are for the approved residency training programs’ direct operating costs.
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We pay these separately from the IPPS per discharge payment and generally base DGME payments on the:
Teaching hospitals or hospitals that train residents in approved medical allopathic, osteopathic, dental, or podiatry residency programs also get an IME adjustment, which reflects the higher indirect patient care costs of teaching hospitals compared to non-teaching hospitals. We calculate the IME adjustment factor using a hospital’s intern- and resident-to-bed ratio.
We make additional payments for inpatient operating and capital costs to hospitals that serve a disproportionate share of low-income patients.
Hospitals get 25% of the amount they previously got under the traditional Medicare disproportionate share hospital (DSH) statutory formula. The remainder, equal to 75% of what we otherwise would pay as Medicare DSH operating payments, goes toward an uncompensated care payment after reducing the amount for the uninsured individuals’ percentage change.
Each Medicare DSH gets an uncompensated care payment based on its share of uncompensated care costs compared to all Medicare DSHs. We annually update the factor estimates that determine each eligible DSH’s uncompensated care payment.
For most Medicare DSHs, we calculate uncompensated care payments from the most recent years of audited Worksheet S-10 data to determine each Medicare DSH’s share of uncompensated care payments. For FY and subsequent years, we use an average of the uncompensated care data from the 3 most recent FYs for which audited data is available.
Note: For Indian Health Service hospitals, tribal hospitals, and hospitals in Puerto Rico, we use the same multi-year average of Worksheet S-10 data to determine Factor 3 for FY and subsequent FYs. We also established a new supplemental payment for these hospitals under 42 CFR 412.106(h).
A Medicare IPPS hospital is eligible for sole community hospital (SCH) classification if it meets 1 of the criteria in 42 CFR 412.92.
If a nearby hospital’s inpatient days attributable to acute care services (those payable under the acute care hospital IPPS) are less than or equal to 8% of the hospital seeking SCH status’s similar inpatient days, the nearby hospital isn’t considered a “like hospital.”
We base SCH operating payments on the higher of their hospital-specific payment rate or the federal rate and base capital payments on the capital base rate (like all other IPPS hospitals).
SCHs may qualify for a payment adjustment if they experience a significant volume decrease.
For IPPS purposes, we treat certain hospitals formerly designated as essential access community hospitals as SCHs.
A Medicare IPPS hospital is eligible for Medicare-dependent hospital (MDH) classification if it meets the criteria in 42 CFR 412.108.
We base MDH operating payments on the higher of the federal rate payment or the federal rate payment plus 75% of the difference between the federal rate payment and its hospital-specific rate payment.
Section of the American Relief Act, (ARA, ), extended the MDH Program for FY discharges occurring before April 1, . Before the enactment of the ARA, , the MDH program was set to expire January 1, . We implemented the 3-month extension in Change Request (CR) .
The Rural Referral Center (RRC) Program supports high-volume rural hospitals. We generally classify a Medicare-participating acute care hospital as an RRC if it’s in a rural area for IPPS payment purposes and meets the criteria in 42 CFR 412.96.
Current RRCs or hospitals that previously had RRC status get certain advantages:
Section of the American Relief Act, (ARA, ), extended the temporary changes (modified definition of low-volume hospital and the methodology for calculating the payment adjustment) for low-volume hospitals under section (d)(12) of the Social Security Act through March 31, . Before the enactment of the ARA, , the temporary changes were set to expire January 1, . The 3-month extension was implemented in CR .
Starting April 1, , the low-volume hospital qualifying criteria and payment adjustment will revert to the statutory requirements that were in effect before FY , and the preexisting low-volume hospital payment adjustment methodology and qualifying criteria will resume.
For FYs through , and the portion of FY occurring before April 1, , we make add-on payments to qualifying low-volume hospitals more than 15 road miles from the nearest subsection (d) hospital if it discharges less than 3,800 total patients during the FY based on its most recently submitted cost report. For each Medicare patient discharge:
For the portion of FY occurring on or after April 1, , we make add-on payments to qualifying low-volume hospitals more than 25 road miles from the nearest subsection (d) hospital if it discharges less than 200 total patients during the FY based on its most recently submitted cost report. For qualifying low-volume hospitals, the payment adjustment is 0.25 for each Medicare patient discharge.
We make additional payments for extremely costly outlier cases to promote seriously ill patients’ access to high quality inpatient care. We identify these cases by comparing their estimated operating and capital costs to a fixed-loss threshold.
We annually set the fixed-loss threshold and adjust it to reflect local labor market costs.
We pay outliers by offsetting reductions in the operating and capital base rates (reducing the payment rates to all cases so outlier payments don’t increase or decrease estimated aggregate Medicare spending).
We set the national fixed-loss threshold at 5.1% of total FY payments. Our methodology incorporates a projection of operating outlier payment reconciliations for the outlier threshold calculation.
CR provides additional instructions to MACs that expand the criteria for identifying cost reports. MACs are to refer to CMS for approval of outlier reconciliation starting with cost reports that started on or after October 1, . We use these new criteria to estimate outlier reconciliation dollars when calculating the FY outlier threshold.
We reduce MS-DRG payments when the patient’s LOS is at least 1 day less than the geometric mean MS-DRG LOS and the hospital transfers the patient to 1 of these:
Our transfer policy includes these post-acute care settings:
We make an additional payment for new medical services and technologies that meet the criteria in 42 CFR 412.87(b).
Certain new transformative devices and antimicrobial products may qualify under an alternative inpatient new technology add-on payment pathway discussed in 42 CFR 412.87(c) and (d).
The Medicare Electronic Application Request Information System™ (MEARIS™) allows users to submit new technology add-on payment applications, requests for ICD-10-PCS procedure codes, or MS-DRG classification change requests. Starting with FY , we only accept MS-DRG classification change requests submitted through MEARIS™; we don’t accept requests.
The HRRP is a Medicare value-based purchasing program that encourages hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable readmissions. The program supports the national goal of improving health care for Americans by linking payment to the quality of hospital care.
We include readmission measures for specific conditions or procedures that significantly affect the lives of many Medicare patients. Under HRRP, we reduce payments to hospitals with higher-than-expected rates of readmission following treatment for select conditions and procedures, encouraging hospitals to provide high-quality care to reduce avoidable returns to the hospital.
The Hospital VBP Program delivers upward, downward, or neutral adjustments to participating hospitals’ base operating MS-DRG payments based on their quality measure performance. We fund value-based incentive payments by reducing hospitals’ base operating MS-DRG payment amounts. The Hospital VBP Program generally applies to all acute IPPS hospitals, with certain exceptions.
The applicable reduction to hospitals’ base operating MS-DRG payment amount is 2%. Each hospital then may earn back a value-based incentive payment that’s more than, equal to, or less than the 2% reduction depending on their measure performance.
A HAC is a condition a patient gets during hospitalization (the condition wasn’t present on admission). The HAC Reduction Program is a value-based purchasing program that links Medicare payments to health care quality in the inpatient hospital setting.
We reduce overall Medicare IPPS payments by 1% for hospitals that rank in the worst-performing quartile of all hospitals on measures of HACs. Under the HAC Reduction Program, hospitals are ranked on their total of preventable conditions, like falls, surgical site infections, and catheter-associated urinary tract infections.
The PDGM case-mix methodology bases 30-day period payment rates on the patient’s clinical characteristics and resource needs. It assigns each 30-day period into 1 of 432 case-mix groups called home health resource groups.
We base case-mix payment on these groups, and each group’s case-mix weight reflects predicted mean group cost relative to the overall average across all groups.
We apply changes to the PDGM case-mix weights in a budget-neutral manner by multiplying the CY national standardized 30-day period payment rate by a case-mix budget neutrality factor. The final CY case-mix budget neutrality factor is 1..
We base the national, standardized 30-day period payment for case-mix on the patient’s condition, care needs, and area wage differences.
We use a case-mix methodology that adjusts the 30-day payment rate based on the patient’s characteristics and their corresponding resource needs.
We put the 30-day periods into different subgroups for each of these categories:
The labor portion bases each 30-day period payment adjustment on wage levels and wage-related costs of providing patient home health care in different geographic areas.
We cap decreases to the home health wage index in a geographic area so the wage index isn’t less than 95% of the wage index in that area in the prior CY. We apply this 5% cap on negative wage index changes in a budget-neutral manner using wage index budget neutrality factors.
The Home Health Prospective Payment System (PPS) allows continuous 60-day patient recertification when the patient remains eligible.
Medicare conditions of participation require recertification assessment during the last 5 days of the previous certification period (for example, during the initial 60-day certification period, you must complete the recertification visit on days 56–60).
HHAs must submit a one-time Notice of Admission (NOA) to establish that the patient is under a home health POC that covers all 30-day periods until the patient discharges.
We may waive the consequences of not submitting an NOA on time if we determine the HHA encountered a circumstance that’s exceptional and qualifies for the waiver.
HHAs may submit the NOA under these conditions:
The certifying physician or allowed practitioner must periodically review the POC, and it must include:
If the signed POC isn’t available at the time of NOA submission, the HHA must base the submission on 1 of these:
We make Low Utilization Payment Adjustment (LUPA) payments for 30-day periods with a low number of visits below the 432 case-mix group’s threshold per-visit rather than paying the case-mix adjusted 30-day payment amount. We updated the LUPA thresholds using CY data.
Submit appropriate claims and supporting documentation for us to apply the LUPA threshold. Documentation must show the patient’s condition and care needs or the case-mix assignment.
Note: We may adjust a home health claim based on other claims a provider may or may not bill. Those claims could affect the Common Working File and PPS code already billed or paid.
We adjust payments if a patient transfers from one HHA to another or discharges and readmits to the same agency within 30 days of the original 30-day period start date. We prorate case-mix adjusted payments for 30-day periods of that type based on the length of the 30-day period ending in a transfer or discharge and readmission, resulting in partial-period payment.
We recognize discharge and return to the same HHA during the 30-day period only when a patient reaches treatment goals in the original home health POC.
Terminate the original home health POC if you anticipate the patient won’t need home health services for the rest of the 30-day period.
We adjust partial period payments by proportionally adjusting the original 30-day period payment to reflect the number of days the patient was under HHA care before an intervening event. We calculate partial period payment adjustments using a span of days (the first billable service date through and including the last billable service date) under the original POC as a proportion of the 30-day period. We then multiply the proportion by the original case-mix and wage index to produce the 30-day payment.
Partial period payment adjustments don’t apply for transfers among HHAs of common ownership. We consider those situations as services provided under arrangement on behalf of the originating HHA by the receiving HHA with ownership interest until the end of the 30-day period.
We allow outlier payments when a 30-day period has unusually large, costly patient home health care needs. We add these outlier payments to the regular 30-day case-mix and wage-adjusted period payments when estimated costs exceed a threshold amount for each home health resource group.
You can calculate the amount of the outlier payment using steps 1–6 in Section 10.8 of the Medicare Benefit Policy Manual, Chapter 7.
Note: In CY , the fixed dollar loss ratio is 0.35 to ensure aggregate outlier payments don’t exceed 2.5% of total aggregate payments.
We include all HHA patient services and supplies in the Home Health PPS 30-day period payment rate under a home health POC except:
Provide all other covered home health services directly or under arrangement (an outside supplier provides services under arrangement and looks to the HHA for payment). Bill the HHA for covered home health services.
We subject these home health services to the consolidated billing Home Health PPS requirements. These services and supplies must meet consolidated billing requirements and get billed with the 30-day period payment:
The hospice’s medical director (or designee), or the physician member of the hospice interdisciplinary group, and the patient’s attending physician (if they have an attending physician) must certify the patient is terminally ill no later than 2 calendar days after starting hospice care for their initial 90-day coverage period.
At the time of hospice election, the patient may designate an attending physician. The attending physician is identified by the patient, at the time they elect to get hospice care, as having the most significant role in the determination and delivery of the patient’s medical care, and can include a:
Only an MD or a DO can certify or recertify the patient is terminally ill. If a patient’s attending physician is an NP or a PA, the hospice medical director or the hospice interdisciplinary group physician member certifies the patient as terminally ill. If a patient wants to change attending physicians, they must file a signed statement with the hospice indicating the change.
When a patient chooses hospice care, the hospice must identify an interdisciplinary group to manage their care. The interdisciplinary group must include, but isn’t limited to, people who are qualified and competent to practice in these professional roles:
The initial election period certification lasts 90 days. After the initial period, the patient gets another 90-day period and unlimited 60-day election periods. An MD or a DO must certify or recertify each election period.
Document the certification in the patient’s clinical record before submitting a claim to your Medicare Administrative Contractor (MAC), and include these items in the certification:
When you newly admit a patient in their third or later benefit period, exceptional circumstances may prevent a face-to-face encounter before the benefit period starts.
The hospice physician or NP must document they had a face-to-face patient encounter. The attestation must:
Starting June 3, , under Section of the Affordable Care Act, these 2 categories of physicians must be enrolled in Medicare or must opt out of Medicare to get paid for hospice services:
This gives unenrolled and non-opted-out physicians time to enroll or opt out of the Medicare Program and allows us to screen the physician to make sure they’re licensed to certify the terminal condition.
Under 42 CFR 418.22(c), either of the 2 categories of physicians listed above must certify the patient’s terminal condition. For subsequent coverage periods, only the hospice physician may certify the patient’s terminal condition.
For detailed information on this requirement, see the Hospice Certifying Enrollment Questions and Answers (Q&A).
Patients meeting eligibility requirements must file an election statement, which must:
Note: We require a complete election statement containing all required elements as a condition for payment.
Hospice providers must file a Notice of Election (NOE) with their MAC within 5 calendar days after the hospice election date. You may submit the NOE through electronic data interchange. If you file the NOE after the 5-day period, you’re liable for services between the hospice election date and the NOE filing date and you may not bill the patient for this period.
Note: We allow exceptions when it’s beyond the hospice’s control to file the NOE within 5 calendar days.
Perform an eligibility check immediately before admission so you can reduce the number of potential errors for exception request-related changes to the patient identifier. This confirms the MBI is active and accurate since the eligibility inquiry system has an MBI End Date field. If there’s a date in that field, the MBI isn’t valid after that date. Contact the patient or use an MBI lookup tool to determine the current MBI to use on the NOE.
When you admit patients, you must inform them in writing that their care is subject to QIO review and discuss potential review results.
A patient or representative may revoke hospice election at any time. Revoking a hospice election is the patient’s or representative’s choice made without undue influence from the hospice provider. To revoke the election, the patient must file a written document with the hospice that includes:
The patient gives up their remaining days in that election period, and their previously waived Medicare coverage restarts. A patient may, at any time, elect to get hospice coverage for any other hospice election periods that they’re eligible to get.
If a Medicare Advantage (MA) enrollee revokes their hospice election, they can continue services through their MA Plan or Medicare Fee-for-Service (FFS) providers (subject to the FFS deductible) until the start of the next month when they get services only through their MA Plan.
Unless submitting a final claim, you must file a MAC Notice of Termination/Revocation within 5 calendar days after a patient or representative revokes a hospice election, or the patient discharges.
You may only discharge a hospice patient if:
Discharging a patient only to avoid exceeding the cap limit violates these regulations and may cause undue distress and potential harm to terminally ill patients who must find care outside the hospice benefit.
A patient can change their hospice election designation once each election period with a transfer, which isn’t considered a revocation. To change the designated hospice, the patient must file a signed statement with the hospice where they got care and the newly designated hospice. The statement must include the:
We require home health agencies, skilled nursing facilities, hospices, and comprehensive outpatient rehabilitation facilities to provide a Notice of Medicare Non-Coverage (NOMNC) to patients ending their Medicare-covered services. The NOMNC tells patients how to request a BFCC-QIO determination and lets them request an expedited determination. A patient gets a Detailed Explanation of Non-Coverage, which explains specific reasons for ending covered services, only if they ask for an expedited determination.
Even if you don’t provide a service on a given day, we pay for hospice care each day a patient is under hospice election. Payments cover service costs in the patient’s POC, including services directly from, or arranged by, the hospice. We make payments on 4 levels of care to meet the patient’s and family’s needs:
We also pay a service intensity add-on with the routine home care rate during the patient’s last 7 days of life if their care meets these criteria:
The service intensity add-on payment is the continuous home care hourly payment rate multiplied by the amount of direct patient care an RN or social worker provides during the 7-day period for a minimum of 15 minutes and up to 4 total hours per day.
Under the IRF PPS, IRFs get a predetermined payment for goods and services they provide during each patient’s IRF stay. Federal rates reflect all IRF patient care costs, including routine, ancillary, and capital costs. Federal rates don’t include operating-approved educational activities costs described in 42 CFR 413.75(a)(1) and 42 CFR 413.85(c), bad debts, or hemophilia blood product costs.
To determine the federal payment amount for each IRF patient, we group patients by clinical condition and expected resource use:
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We adjust for interrupted stays, short stays less than 3 days, short-stay transfers (transfers to another institutional setting with an IRF length of stay less than the average CMG length of stay), deaths, and high-cost outlier cases.
We apply a permanent 5% cap on any decrease to a provider’s wage index from its wage index in the previous year, and we apply this cap in a budget-neutral manner.
We adjust the hospital wage index to reflect geographic wage rate differences.
We apply an adjustment to the base rate for IRFs that treat a higher proportion of low-income patients.
IRFs with residency training programs get higher payment rates based on the number of interns and residents trained compared to their average daily census. We cap this adjustment.
We annually update rates to reflect:
The FY IRF market basket increase factor is 3.0%, which is a 3.5% market basket update reduced by a 0.5 percentage point productivity adjustment.
A facility must meet IRF classification requirements to get IRF PPS payment. At least 60% of the facility’s total inpatient population must need intensive IRF treatment for 1 or more of 13 medical conditions. We include comorbidities in the compliance threshold if they meet certain criteria.
An IRF’s compliance percentage is the percentage of the total inpatient population requiring intensive IRF treatment for 1 or more of 13 medical conditions. Medicare Administrative Contractors (MACs) use compliance review period data to calculate the compliance percentage.
Each compliance review period, except for new IRFs, is 1 continuous 12-month period, starting 4 months before starting a cost reporting period and ending 4 months before the next cost reporting period.
MACs calculate the compliance percentage using:
MACs must use the random sample medical record method to calculate the compliance percentage when:
MACs must send results to the appropriate CMS Survey & Operations Group (CMS Location), which determines an IRF’s classification before the next cost reporting period starts and is effective for the entire cost reporting period.
If the CMS Location doesn’t classify a Medicare provider as an IRF, they aren’t eligible for payment under the IRF PPS. We pay them under the Inpatient PPS.
We allow a hospital to open a new IRF unit anytime within the cost reporting year if the hospital notifies the Office of Program Operations and Local Engagement and their MAC in writing of the change at least 30 days before opening the new IRF unit. If a hospital opens a new IRF unit during a cost reporting year, this change remains in effect for the rest of the cost reporting year.
MACs must consider these items in a patient’s IRF medical record when determining if an IRF admission was reasonable and necessary:
For Medicare to pay an IRF claim, the patient’s IRF stay must be reasonable and necessary according to the requirements at 42 CFR 412.622(a)(3)(4)(5) and Section 110 of the Medicare Benefit Policy Manual, Chapter 1.
Note: We removed the physician post-admission evaluation verifying the patient’s preadmission screening requirement, but you still need to complete a history and physical under the conditions of participation.
Licensed or certified clinicians must complete a preadmission patient screening within the 48 hours before IRF admission and get this information:
Interdisciplinary team meetings must be held at least once each week throughout the IRF stay. A rehabilitation physician may lead the weekly interdisciplinary team meetings either in person, by video, or by .
Team meetings must involve a registered nurse with rehabilitation training or experience, a social worker or case manager (or both), and a licensed or certified therapist from each treating therapy discipline involved in treating the patient. Keep the results and findings of the meetings, and the concurrence by the rehabilitation physician with those results and findings, in the patient’s medical record.
Interdisciplinary team meetings should include participant names and professional titles. You don’t need signatures from interdisciplinary team meeting participants other than the rehabilitation physician’s agreement in the form of a signature.
The patient must:
IRF Rules and Related Files has more information.
SSO, HCO, fixed-loss amounts, and interrupted stay payment policy adjustments all apply to site neutral and standard federal payment rate discharges except where noted.
The SSO policy helps prevent inappropriately paying for cases without a full episode of care. SSO payment adjustments apply only to the standard federal payment rate discharges and may happen when a patient:
We apply an adjustment when the LOS ranges from 1 day through 5/6 of the ALOS for the MS-LTC-DRG where we group that case. We subject the MS-LTC-DRG payment to the SSO adjustment.
We don’t apply an adjustment when the LOS is more than 5/6 of the ALOS for the MS-LTC-DRG where we group that case. In this situation, the LTCH gets the full MS-LTC-DRG payment.
Note: When calculating the SSO adjustment, we cap the SSO threshold (5/6 of the ALOS for the MS-LTC-DRG) at 25 days. We never subject stays of 25 days or more to the SSO policy.
This policy doesn’t apply to site neutral discharges.
We blend the MS-LTC-DRG per diem amount with what we would pay under the IPPS, calculated as a per diem and capped at the full IPPS comparable amount.
We base LTCH payments on the patient’s covered benefit days until the LOS triggers a full MS-LTC-DRG payment. This means a patient’s remaining benefit days and length of hospital stay affects LTCH payments and may result in an SSO payment adjustment.
Table 3. Benefits Exhaust & LOS is Below MS-LTC-DRG Threshold If Then Example The patient uses regular episode benefit days during an LOS below the SSO MS-LTC-DRG thresholdNote: We allow 90 covered episode benefit days of care under the inpatient hospital benefit. Each patient has 60 lifetime reserve days, which the patient may use to cover non-covered episode days of care exceeding 90 days.
The HCO policy adjusts the applicable LTCH PPS payment rate (site neutral rate or standard federal rate) for LTCH stays with costs exceeding typical cases of similar case-mix cost. To qualify for an HCO payment, an LTCH’s estimated treatment costs must exceed the outlier threshold. We calculate the applicable outlier threshold as the case’s applicable LTCH PPS payment plus the applicable fixed-loss amount.
The HCO payment equals 80% of the difference between the estimated case cost and the outlier threshold.
For SSO cases, we calculate the outlier threshold by adding the applicable fixed-loss amount to the adjusted SSO MS-LTC-DRG payment. If the estimated SSO case cost exceeds the outlier threshold, it qualifies for an HCO payment.
We set 2 fixed-loss amounts:
The HCO adjustment:
Medicare Administrative Contractors (MACs) use PRICER software to determine if enough medically necessary benefit days are in the outlier period. If a patient has enough benefit days, the MAC processes the claim as usual and the LTCH takes no other action. If a patient’s benefit days exhaust, the MAC returns the claim to the LTCH for correction, indicating the correct HCO threshold amount.
We make HCO payments for:
Full applicable LTCH PPS payment means the standard federal rate (including SSO adjustment) or the site neutral payment rate, based on the LTCH case. Applicable HCO threshold means the HCO threshold determined from the standard federal rate fixed-loss amount or site neutral fixed-loss amount based on the LTCH case.
Table 7. Patient Benefits Exhaust Before Exceeding Applicable HCO Threshold If Then ExampleIf the patient’s benefits exhaust during the LTCH stay, determine the:
To calculate the HCO, use the costs for the days after the patient’s case cost reaches the HCO threshold of available benefit days. If the patient remains under care after benefits exhaust, they pay the costs of those remaining days.
Under Medigap or Medicaid, changes to HCO payments under the LTCH PPS outlier reconciliation policy won’t retroactively affect a patient’s lifetime reserve days or coverage status, benefits, and payments.
The fixed-loss amount for standard federal payment rate cases is the amount allowing yearly projected total HCO payments to equal 7.975% of the total LTCH PPS standard federal payment rate payments estimated for that year (full MS-LTC-DRG payments or adjusted SSO amount plus HCO payments).
We include estimated uncompensated care payments in the outlier fixed-loss cost threshold calculation. Specifically, we use the estimated per-discharge uncompensated care payments to hospitals eligible for the uncompensated care payment for all cases in the outlier fixed-loss cost threshold calculation.
The applicable HCO threshold for site neutral payment rate cases is the sum of the case’s site neutral payment rate and the IPPS fixed-loss amount. We set the site neutral case fixed-loss amount to the same as the IPPS fixed-loss amount.
We estimate each case’s cost using provider-specific file CCRs:
These CCR revisions or determinations may also apply:
LTCH PPS outlier policy allows for reconciling HCO payments at cost report settlement and looks for differences between the estimated and actual CCR.
An interrupted stay happens when an LTCH discharges a patient to an acute care hospital, inpatient rehabilitation facility (IRF), skilled nursing facility (SNF), swing bed, or home, and the patient readmits to the same LTCH for more medical treatment within a specified period. For example, when an LTCH patient discharges for treatment, and the services are unavailable in the LTCH.
The 2 types of interrupted stays are:
Interruption day count starts the day of discharge (the first day the patient is away from the LTCH at midnight).
If a patient discharges from an LTCH on September 2, the greater than 3-day interrupted stay policy determines payment if the patient is readmitted to the same LTCH between September 5 and the applicable provider’s fixed-period threshold.
For a greater than 3-day interruption, the LTCH must discharge the patient; admit them directly to an inpatient acute care hospital, IRF, SNF, or swing bed; and readmit them to the original LTCH within a specified period.
Table 8. Greater Than 3-Day Interruption Facility Discharge to Interrupted Stay Fixed Period Inpatient acute care hospital Between 4 and 9 consecutive days IRF Between 4 and 27 consecutive days SNF or swing bed Between 4 and 45 consecutive daysAn LTCH’s discharge payment percentage is the ratio of the LTCH’s discharges that got the standard federal rate payment to its total Medicare discharges number under the LTCH PPS. If an LTCH’s discharge payment percentage for a cost reporting period isn’t at least 50%, this payment adjustment policy applies after we calculate the percentage and notify the LTCH. For cost reporting periods subject to this adjustment, the discharge payment percentage adjustment is:
The payment adjustment ends when the calculated cost reporting period’s discharge payment percentage is at least 50%. We may subject the LTCH to this adjustment again if, after reinstatement, the discharge payment percentage falls below 50%.
LTCHs subject to a cost reporting period payment adjustment can get a special probationary reinstatement. They can do this by getting the payment adjustment delayed if, for at least 5 consecutive months of the 6 months before the cost reporting period, they calculate the discharge payment percentage to at least 50%.
For any cost reporting period the payment adjustment would apply without a delay, the payment adjustment applies for all discharges if the discharge payment percentage isn’t at least 50%.
PDPM classifies patients into 5 separate case-mix index (CMI)-adjusted components:
Under the PDPM, only PT, OT, and NTA payments get variable per diem (VPD) resource-use adjustment rate changes over the stay.
Each patient classification component uses different measures:
To calculate each payment component, multiply the CMI linked to the patient’s case-mix group (CMG) by the wage-adjusted component base rate, then by the VPD schedule-specific day, when applicable. Add each component payment to the non-case-mix component payment rate to create the patient’s PDPM per diem rate.
Figure 4. Calculating PDPM Classification
PT and OT components use 2 classifications: clinical category and functional status.
We base the clinical category on the primary SNF stay diagnosis code by mapping the ICD-10-CM codes on the Minimum Data Set (MDS) in Item IB to a PDPM clinical category.
A surgical procedure during the previous inpatient stay may adjust the clinical category and map to 1 of these primary diagnosis clinical categories:
Mapping the ICD-10-CM diagnosis or surgical category classifies a SNF resident into each of the clinical categories. Each year we consider stakeholder ICD-10-CM mapping suggestions.
Given similar costs among certain PT and OT clinical categories, we grouped certain patient clinical classification categories together.
We calculate the PDPM PT and OT functional score in Table 9 using MDS 3.0 data based on 10 Section GG items that proved highly predictive of PT and OT costs per day:
Under the PDPM, we assess a patient’s cognitive status using the Brief Interview for Mental Status (BIMS). In cases where you can’t complete the BIMS, complete a Staff Assessment for Mental Status. We use the Cognitive Performance Scale (CPS) to score patients based on the staff assessment responses. We base the new PDPM cognitive score on the Cognitive Function Scale, which combines scores from the BIMS and CPS into 1 scale that compares cognitive function across all patients.
These 12 SLP-related comorbidities predict higher SLP costs:
PDPM has more information about mapping between ICD-10-CM diagnoses and SLP comorbidities.
After completing the BIMS or CPS, use the cognitive measure classification methodology in Table 11 to determine the BIMS and CPS scores.
Table 11. Cognitive Measure Classification PDPM Cognitive Level BIMS Score CPS Score Cognitively Intact 13–15 0 Mildly Impaired 8–12 1–2 Moderately Impaired 0–7 3–4 Severely Impaired N/A 5–6We found NTA costs increase with 50 conditions and extensive services:
To determine the patient’s NTA comorbidity score, determine all the patient’s qualifying comorbidities and add each comorbidity’s points. This sum is the patient’s NTA comorbidity score putting that patient into an NTA component classification group.
The PDPM HIPPS algorithm:
Providers may complete the IPA to report the patient’s PDPM classification change with no VPD schedule change. The IPA changes payment starting on the assessment review date, ending when the Part A stay stops, unless the provider completes another IPA.
States can choose PDPM item sets to calculate Medicaid payments. Each state determines if providers use PDPM comparisons and payment data for Medicaid. If so, states may require Omnibus Budget Reconciliation Act PDPM assessment data, like comprehensive and quarterly assessments. These item sets use Section GG, Item IB (primary medical condition) and J (recent surgery requiring active SNF care).
MDS 3.0 Technical Information has more information.
Section I: SNF Primary Diagnosis: IB lets providers use an ICD-10-CM code to report a patient’s primary diagnosis. This item asks, “What’s the main reason for admitting this person to the SNF?” Code Item IB when Item I is coded as any response 1–13. We retired Item IA; use only I and IB.
Section J: Patient Surgical History: J–J capture major surgical procedures during the hospital stay immediately before SNF admission. We use these items with the diagnosis captured in IB to classify patients into PT and OT case-mix categories.
Section O: Discharge Therapy Items: MDS, Section O uses Items OA1–OC5 for each therapy discipline mode (for example, individual, group, or concurrent therapy) and therapy amount (in minutes) the patient gets. Users get an error message if that discipline’s group and concurrent minutes total more than 25% of total therapy.
Section GG: Interim Performance: To get a patient’s interim performance, use MDS Section GG items for patient functional assessments. The new column look-back period is a 3-day window before the IPA’s Assessment Reference Date.
Swing Bed PPS PDPM Assessment uses several existing MDS items:
I: Inflammatory Bowel Disease is an existing MDS item added to the 5-day PPS Assessment and IPA.
The PDPM combined limit for both concurrent (1 therapist with 2 patients doing different activities) and group therapy (1 therapist with 2–6 patients doing the same or similar activities) can’t equal more than 25% of the therapy that SNF patients get for each therapy discipline.
The PPS Discharge Assessment checks therapy limit compliance and includes the number of minutes per mode, per discipline, for the entire PPS stay.
An interrupted SNF stay happens when a patient leaves Part A-covered SNF care, then readmits to Part A-covered SNF care in the same SNF (not a different SNF) within the interruption window.
Note: If a resident drops to a non-skilled level of care or leaves Part A SNF care, we consider the patient discharged because of the interrupted stay policy, even if the patient remains in the facility.
The interruption window is a 3-day period starting on the first non-covered day after a Part A-covered SNF stay and ending at 11:59 pm on the third consecutive non-covered day.
The first non-covered day may be different if the patient leaves the facility or Part A coverage:
If the patient meets both conditions, we consider the subsequent stay a continuation of the last interrupted stay because of VPD and assessment schedules:
If the patient readmits to the same SNF outside the interruption window or the patient readmits to a different SNF (regardless of length of time between stays), the interrupted stay policy doesn’t apply, and we consider the subsequent stay a new stay. In these cases, the VPD schedule resets to day 1 payment rates, and the assessment schedule also resets to day 1, requiring a new 5-day assessment.
SNF PPS administrative presumption automatically classifies a patient who’s correctly assigned 1 of the designated, more intensive case-mix classifiers on the 5-day PPS assessment to a SNF level of care through the assessment reference date.
Patients not assigned to a designated classifier get an individual determination using existing administrative criteria. This doesn’t automatically classify as meeting or not meeting the level of care definition.
PDPM classifiers designated under this administrative presumption include:
PDPM focuses AIDS patient costs by assigning the highest classification point value (8 points) of any condition or service under its NTA component and adds 18% to the nursing component.
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