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 (DVA)/Veterans
Health Administration (VHA) 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 DVA/VHA 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 Education
DHA 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 DVA/VHA 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.