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
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LTCH Transition
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TRICARE Pays:
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Note: “Medicare
payment” is either Full LTCH or Site-Neutral payment rate.
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Year 1
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Effective with discharges occurring
in LTCHs’ cost reporting periods beginning on or after October 1,
2018 - September 30, 2019
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135% of Medicare Payment
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Year 2
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October 1, 2019 - September
30, 2020
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115% of Medicare Payment
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Year 3
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October 1, 2020 - September
30, 2021
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100% of Medicare Payment
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Case 1: Patient With Acute
Intensive Care Unit (ICU) stay of over THREE days
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|
*The LTCH receives
billed charges for this admission because the LTCH's cost reporting
period during FY18 begins January 1, 2019.
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Cost Report Period: LTCH
with Cost Reporting Period in Fiscal Year (FY) 2018 beginning January
1, 2019, following implementation of the TRICARE LTCH Rule.
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|
Patient:
|
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TRICARE Pays:
|
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Admitted on November 2, 2018
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Billed Charges*
|
|
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Admitted on January 2, 2019
|
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135% of the Full LTCH Payment
Rate
|
|
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Admitted on July 2, 2019
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135% of the Full LTCH Payment
Rate
|
|
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Admitted on September 2, 2019
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135% of the Full LTCH Payment
Rate
|
|
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Admitted on October 2, 2019
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115% of the Full LTCH Payment
Rate
|
|
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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
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Billed Charges*
|
|
|
Admitted on January 2, 2019
|
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135% of the Site-Neutral Payment
Rate
|
|
|
Admitted on July 2, 2019
|
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135% of the Site-Neutral Payment
Rate
|
|
|
Admitted on September 2, 2019
|
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135% of the Site-Neutral Payment
Rate
|
|
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Admitted on October 2, 2019
|
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115% of the Site-Neutral Payment
Rate
|
|
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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:
|
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TRICARE Pays:
|
|
|
Admitted on November 2, 2018
|
|
Billed Charges*
|
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Admitted on January 2, 2019
|
|
Billed Charges*
|
|
|
Admitted on July 2, 2019
|
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Billed Charges*
|
|
|
Admitted on September 2, 2019
|
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135% of the Full LTCH Payment
Rate
|
|
|
Admitted on October 2, 2019
|
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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
|
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135% of the Site-Neutral Payment
Rate
|
|
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Admitted on October 2, 2019
|
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115% of the Site-Neutral Payment
Rate
|
|
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Case 5: Patient With Acute
ICU Stay Of Over Three Days
|
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Cost Reporting Period: LTCH
with Cost Reporting Period in FY18 beginning October 1, 2018.
|
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Patient:
|
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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.
|
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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
|
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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.