4.0 POLICY
4.1 Statutory
Background
Under Title 10, United States
Code (USC), Section 1079(i)(2), the amount to be paid to hospitals, Skilled
Nursing Facilities (SNFs), and other institutional providers under
the TRICARE program, “shall be determined to the extent practicable
in accordance with the same reimbursement rules as apply to payments
to providers of services of the same type under Medicare.” Based
on this statutory provision, TRICARE has adopted Medicare’s LTCH
Prospective Payment System (PPS) for reimbursement of LTCHs currently
in effect for the Medicare program as required under Section 123
of Public Law (PL) 106-113 (Balanced Budget Refinement Act (BBRA)),
which provides for the establishment of a PPS for LTCHs described
in Section 1886(d)(1)(B)(iv) of the Social Security Act (the Act).
4.2 Applicability
and Scope of Coverage
All LTCHs that meet
the classification criteria for payment under the LTCH PPS under
Title 42 CFR Part 412, subpart B, are considered authorized LTCHs
under the TRICARE program.
4.3 Payment Method
4.3.1 For admissions prior to October
1, 2018, LTCHs shall be reimbursed based on billed charges or negotiated
rates.
4.3.2 Payment in full. The payment made under the
LTCH PPS represents payment in full (subject to applicable deductibles,
cost shares, and copayments) for inpatient operating and capital
costs associated with furnishing TRICARE covered services in an
LTCH, but not certain pass-through costs (e.g., bad debts, direct
medical education, and blood clotting factors).
4.3.3 For new
admissions for LTCHs whose cost reporting period begins on or after
October 1, 2018, LTCHs shall be reimbursed:
• The standard LTCH
PPS payment rate; or
• The lower site-neutral
LTCH PPS payment rate based on the Medicare acute hospital Inpatient
Prospective Payment System (IPPS) rates.
4.3.3.1 Standard
LTCH PPS Payment Rates
4.3.3.1.1 Contractors
shall reimburse LTCHs for inpatient care using Medicare’s LTCH PPS
which classifies LTCH patients into distinct Diagnosis Related Groups
(DRGs). The patient classification system groupings are called Medicare
Severity-Long-Term Care-Diagnosis Related Groups (MS-LTC-DRGs), which
are the same DRG groupings used under the Medicare acute hospital
IPPS, but that have been weighted to reflect the resources required
to treat the medically complex patients treated at LTCHs.
4.3.3.1.2 In order
to receive the standard LTCH PPS payment rate, the discharge must
have been immediately preceded by a Subsection (d) hospital discharge.
“Immediately preceded” means that the LTCH admission occurred within
one day of the Subsection (d) hospital discharge based on the admission
date on the LTCH claim and the discharge date on the Subsection
(d) hospital claim.
4.3.3.1.3 Contractors
shall treat Military Treatment Facilities (MTFs)/Enhanced Multi-Service Markets
(eMSMs) and Department of Veterans Affairs (VA) hospitals as “Subsection
(d)” hospitals for the purposes of the LTCH admission and qualification
for the LTCH-PPS payment. Specifically, for patients who may have
used their VA benefit or received inpatient care at an MTF/eMSM
that qualified as an “immediately preceding” stay, applicable criteria
for the standard LTCH PPS payment rate are met.
4.3.3.1.4 The contractor
shall determine if the LTCH admission was immediately preceded by
a qualifying Subsection (d) hospital discharge.
4.3.3.2 Site-Neutral
LTCH PPS Payment Rates
4.3.3.2.1 Contractors
shall reimburse LTCHs the site-neutral payment rate for patients
who do not use prolonged mechanical ventilation (at least 96 hours)
during their LTCH stay or who did not spend three or more days in
the ICU during their prior acute care hospital stay.
4.3.3.2.2 Contractors
shall reimburse LTCHs the site-neutral payment rate for patients
with a principal diagnosis in the LTCH of a psychiatric diagnosis
or rehabilitation as indicated by the grouping of the discharge
into one of 15 “psychiatric and rehabilitation” MS-LTC-DRGs (876,
880, 881, 882, 883, 884, 885, 886, 887, 894, 895, 896, 897, 945,
and 946).
4.3.3.2.3 Contractors shall determine whether the TRICARE
patient’s LTCH stay meets the requirements for a standard or site-neutral
payment.
4.3.4 TRICARE is adopting Medicare’s
adjustments for short-stay outliers, interrupted stay policy, the
method of payment for preadmission services, and high-cost outlier
payments.
4.3.5 TRICARE will also incorporate Medicare’s LTCH
Quality Reporting (QR) payment adjustments for TRICARE LTCHs that
reflect Medicare’s annual payment update for that facility. TRICARE is
not establishing a separate reporting requirement for hospitals,
but will utilize Medicare’s payment adjustments resulting from their
LTCH QR program.
4.3.6 TRICARE is not adopting the
25% threshold payment adjustment for hospitals determined by Medicare
to receive the payment adjustment in that year.
4.4 Transition
Period
In the Final Rule (FR) published in
the Federal Register on December 29, 2017, DHA created
a multi-year transition period to buffer the impact from any potential
decrease in revenue that hospitals may experience during the implementation
of a revised LTCH inpatient payment system. This transition period
provides LTCHs with sufficient time to adjust and budget for potential
revenue reductions. The transition is as follows:
4.4.1 For the
first 12 months following implementation, the TRICARE LTCH PPS allowable
cost will be 135% of Medicare LTCH PPS amounts.
4.4.2 For the
second 12 months following implementation, the TRICARE LTCH PPS
allowable cost will be 115% of the Medicare LTCH PPS amounts.
4.4.3 For the
third 12 months following implementation, and subsequent years,
the TRICARE LTCH PPS allowable cost will be 100% of the Medicare
LTCH PPS amounts.
Figure 16.1-1 LTCH - Admission Examples
|
LTCH
Transition
|
TRICARE
Pays:
|
|
Note: “Medicare payment” is either
Full LTCH or Site-Neutral payment rate.
|
|
Year
1
|
Effective with
discharges occurring in LTCHs’ cost reporting periods beginning
on or after October 1, 2018 - September 30, 2019
|
135%
of Medicare Payment
|
|
Year
2
|
October 1, 2019
- September 30, 2020
|
115%
of Medicare Payment
|
|
Year
3
|
October 1, 2020
- September 30, 2021
|
100%
of Medicare Payment
|
|
Case
1: Patient With Acute Intensive Care Unit (ICU) stay of over THREE
days
|
|
*The
LTCH receives billed charges for this admission because the LTCH's
cost reporting period during FY18 begins January 1, 2019.
|
|
Cost
Report Period: LTCH with Cost Reporting Period in Fiscal
Year (FY) 2018 beginning January 1, 2019, following implementation
of the TRICARE LTCH Rule.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
Billed Charges*
|
|
|
Admitted on
January 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
July 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Full LTCH Payment Rate
|
|
|
Case
2: Patient With No ICU Or Prolonged Mechanical Ventilation
|
|
* The
LTCH receives billed charges for this admission because the LTCH's
cost reporting period during FY18 begins January 1, 2019.
|
|
Cost
Report Period: LTCH with Cost Reporting Period in FY18 beginning January
1, 2019, following implementation of the TRICARE LTCH Rule.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
Billed Charges*
|
|
|
Admitted on
January 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
July 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Site-Neutral Payment Rate
|
|
|
Case
3: Patient With Acute ICU Stay Of Over Three Days
|
|
* The
LTCH receives billed charges for this admission because the LTCH's
cost reporting period during FY18 begins September 1, 2019.
|
|
Cost
Report Period: LTCH with Cost Reporting Period in FY18 beginning September
1, 2019, following implementation of the TRICARE LTCH Rule.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
Billed Charges*
|
|
|
Admitted on
January 2, 2019
|
|
Billed Charges*
|
|
|
Admitted on
July 2, 2019
|
|
Billed Charges*
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Full LTCH Payment Rate
|
|
|
Case
4: Patient with no ICU or prolonged mechanical ventilation
|
|
* The
LTCH receives billed charges for this admission because the LTCH's
cost reporting period during FY18 begins September 1, 2019.
|
|
Cost
Report Period: LTCH with Cost Reporting Period in FY18 beginning September
1, 2019, following implementation of the TRICARE LTCH Rule.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
Billed Charges*
|
|
|
Admitted on
January 2, 2019
|
|
Billed Charges*
|
|
|
Admitted on
July 2, 2019
|
|
Billed Charges*
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Site-Neutral Payment Rate
|
|
|
Case
5: Patient With Acute ICU Stay Of Over Three Days
|
|
Cost
Reporting Period: LTCH with Cost Reporting Period in FY18
beginning October 1, 2018.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
January 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
July 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Full LTCH Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Full LTCH Payment Rate
|
|
|
Case
6: Patient With No ICU Or Prolonged Mechanical Ventilation
|
|
Cost
Reporting Period: LTCH with Cost Reporting Period in FY18
beginning October 1, 2018.
|
|
Patient:
|
|
TRICARE Pays:
|
|
|
Admitted on
November 2, 2018
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
January 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
July 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
September 2, 2019
|
|
135% of the
Site-Neutral Payment Rate
|
|
|
Admitted on
October 2, 2019
|
|
115% of the
Site-Neutral Payment Rate
|
|
4.5 Preadmission
Services
LTCHs paid under the LTCH
PPS are subject to a one-day payment window, where any outpatient
services or non-physician services provided one calendar day prior
to the LTCH admission are included in the LTCH-DRG payment. This
is known as the one-day payment rule. The one-day payment rule only
applies to services that are diagnostic and furnished in connection
with the principle diagnosis. Any other services not meeting the
diagnostic criteria, or services provided outside of the one-day
window will be paid separately according to current TRICARE policy.
4.6 LTCH Data
4.6.1 The MS-LTC-DRG
rates and weights and the IPPS rates and weights are posted to the
CMS website in August of each year. The contractor shall use the
most current version of the files (to include any corrections made)
for each fiscal year (October 1) update.
4.7 Billing and
Coding Requirements
4.7.1 The contractors shall use type of institution
73 for LTCHs.
4.7.2 The contractors shall use
Pricing Rate Code (PRC) LT for Standard LTCH claims
priced using the MS-LTC-DRG payment rates and PRC SN for
LTCH claims priced using the site-neutral LTCH PPS payment rates.
4.8
Direct Medical
EducationDHA
will reimburse LTCHs who file a request for their direct medical
education costs in a timely manner, as outlined in Chapter 6, Section 8. Although the procedures
listed in Chapter 6, Section 8 pertain to DRGs, those
same procedures are to be used to reimburse LTCHs for direct medical
education costs.
4.9 Dual Eligible
When the
Medicare hospital day limit is exhausted for a TRICARE beneficiary,
who is also eligible for Medicare (i.e., TRICARE for Life (TFL)
beneficiaries), TRICARE is the primary payer.
5.0 Exclusions
5.1 The TRICARE
LTCH PPS methodology does not apply to hospitals in states that
are reimbursed by Medicare and TRICARE under a cost containment
waiver that exempts them from Medicare’s IPPS or the TRICARE DRG-based
payment system.
5.2 Children’s hospitals are excluded
from the TRICARE LTCH PPS methodology.
5.3 VA hospitals are excluded
from the TRICARE LTCH PPS methodology.
5.4 The TRICARE LTCH PPS methodology
does not apply to any costs of physician services or other professional
services provided to LTCH patients.
5.5 Custodial or domiciliary care
is not coverable under the TRICARE program, even if rendered in an
otherwise authorized LTCH.