(Medicare Claims Processing Manual)

o 100 percent of estimated cost of the case,   o 120 percent of the LTC -DRG per diem amount,   o the full LTC -DRG payment, or   o a blend of an amount comparable to what would otherwise be paid under the IPPS, computed as a per diem and capped at the full IPPS DRG comparable amount, and the 120 percent LTC -DRG per diem amount.   As noted above, during this 3- year period specified by the MMSEA, all SSO cases (including those where the covered LOS exceeds the IPPS threshold) are paid under the SSO payment formula that became effective beginning in RY 2007, as described above.   Short Stay Outlier Policy for LTCHs qualifying under 1886(d)(1)(B)(II)   A subsection (II) hospital:    Was excluded as a LTCH in 1986    Has an average inpatient LOS of greater than 20 days, and    Demonstrates that 80 percent of its annual Medicare inpatient discharges in the 12-month reporting period ending FFY 1997 have a principal finding of neoplastic disease.   For a subsection (II) hospital there is a special short -stay outlier policy effective for the remainder of the transition period (i.e., discharges  occurring on or after July 1, 2003 through December 31, 2006), where the lesser of 120 percent of cost or120 percent of the per diem LTC -DRG in the existing short -stay outlier policy is replaced with the follow percentages:    Effective for discharges  occurring on or after July 1, 2003 through the first year of transition 195%;    Effective for discharges  during the second year of the transition, 193%;    Effective for discharges  during the third year of the transition, 165%;    Effective for discharges  during the fourth year of the transition, 136%; and    Effective for discharges  for the last year and thereafter, the percentage returns to 120%.  150.9.1.2 - Interrupted Stays  (Rev. 1231; Issued:  04- 27-07; Effective:  12 -03-07; Implementation:  12 -03-07)  Beginning on July 1, 2004, there are two interruption of stay policies in effect under the LTCH PPS.   A 3-day or less interruption of stay is a stay at an LTCH during which the beneficiary is discharged from the LTCH to an acute care hospital, IRF, SNF, or home and readmitted to the same LTCH within 3 -days of the discharge.  The 3- day or less period begins  with the date of discharge from the LTCH and ends not later than midnight of the third day.  Medicare payment for any test, procedure, or care provided on an outpatient basis or for any inpatient treatment during the interruption" would be the responsibility of the LTCH under arrangements with one limited exception:  for RY 2005 and RY 2006, if  treatment at an inpatient acute care hospital would be grouped to a surgical DRG, a separate Medicare payment would be made under the IPPS for that care.  Effective for dates of service on or after July 1, 2006 (RY 2007) , this limited exception for surgic al DRGs is no longer applicable.  No further separate payment to an acute care hospital will be made.  Any tests or procedures, that were administered to the patient during that period of time of interruption will be considered to be part of that single episode of LTCH care and bundled into the payment to the LTCH.  The LTCH will be required to pay any other providers without additional Medicare program payment liability.   If no additional Medicare services are delivered during the3- day or less interruption (e.g., the patient is home and doesnt receive any outpatient or inpatient services at an acute care hospital or IRF or care at a SNF) prior to readmission to the LTCH, t he number of days away from the LTCH will not be included in the total length of stay for that beneficiary stay.  If care is delivered on any day during the interruption, however, that the LTCH pays for under arrangements, all the days of the interruption are included in the total length of stay for that beneficiary stay.  Therefore, if a patient receives services on only one of the days of the interruption but is away from the LTCH for 3 days, all 3 days will be deemed a part of the total episode of care and counted towards the length of stay for that patient stay.  If an interruption of stay exceeds 3- days, the original interrupted stay policy, below, governs payment.    The original interrupted stay policy is now defined as a greater than 3- day interruption of stay and is a stay in which a LTCH patient that is admitted upon discharge to an inpatient acute care hospital, an inpatient rehabilitation facility (IRF), a skil led nursing facility (SNF), or swing bed and returns to the same LTCH within a specified period of time.  The day count begins on the day of discharge from the LTCH, which is also the admission day to the other provider, and ends on the day of readmission to the LTCH.   o For an acute care hospital: between 4 and 9 consecutive days;   o For an IRF: between 4 and 27 consecutive days;   o For a SNF: between 4 and 45 consecutive days; and  o For a Swing Bed: between 4 and 45 consecutive days or less.   Note that although the greater than 3 -day interruption of stay policy only governs when a patient is away from the LTCH for between 4 days and the applicable provider threshold, the day count for determining whether the threshold is met begins when the pat ient is discharged.  So if a patient is discharged on 9/2/04, the 3- day or less interrupted stay policy will govern payment if the patient is readmitted to the LTCH on 9/2, 9/3, or 9/4.  If the patient is readmitted to the LTCH on 9/5, payment will be paid  to, for example, the acute care hospital which provided treatment, but the day count for determining whether or not the stay is one interrupted stay or a whether the return to the LTCH is a separate admission starts on 9/2.  For example, if the LTCH discharges a patient to an acute care hospital on 9/2/04, if they are readmitted to the LTCH by 9/10/04, this is an interrupted stay.  If they are readmitted on 9/11/04, it counts as a separate admission.  An interrupted stay case is treated as one discharge for the purposes of paym ent; only one LTCH PPS payment is made.  (The bill generated by the original stay in the LTCH should be cancelled by the provider or they may do a debit/credit adjustment.)   Multiple interrupted stays should be entered as one claim but each interrupted stay should be evaluated individually for the rule regarding the appropriate number of days at the intervening facility.   If the length of stay at the "receiving" site of care exceeds the above - specified period of time, the return to the LTCH is a new admission.  This means that the original discharge to that site is treated as a discharge for payment purposes.   For the percentage of payments that are to be made under the TEFRA system during the 5-year transition, the A/B MAC (A) treats each segment of the interrupted stay as a separate discharge.  (A/B MACs (A) are to follow the same procedure as provided under t he IRF PPS in determining the amount of the payment under the blend that TEFRA would have paid.)   150.9.1.3 - Payments for Special Cases  (Rev. 1816; Issued:  09- 17-09; Effective Date:  Discharges on or after October 1, 2009; Implementation Date:  10 -05-09)  Payments for short -stay outliers are determined in the Pricer logic.  Payments for interrupted stays are based on properly submitted bills by the LTCHs, which are described in billing instructions.   More than one case -level adjustment may apply to the same case.  For example, a case may be a short -stay outlier and also be governed by either the 3- day or less or greater than 3-day interruption of stay policy and therefore only generate 1 LTC -DRG paymen t to the LTCH.   150.9.1.4 - Payment Policy for Co -Located Providers  (Rev. 2060, Issued: 10- 01-10, Effective: 10 -01-10, Implementation: 10 -04-10)  Hospitals within hospitals (HwH), satellite facilities, and onsite SNFs:   The LTCHs that are co -located with other Medicare providers (acute care hospitals, IRFs, SNFs) are subject to the interrupted stay policy (150.9.1.2) but in addition, if such discharges and readmissions exceed 5 percent of the LTCHs total discharges duri ng a cost reporting period, all such readmissions during that cost reporting period are to be paid as one discharge, regardless of the time spent at the intervening facility.   One 5 percent calculation is applied to discharges to and readmissions from onsite acute care hospitals and a separate 5 percent calculation is made for the combined discharges to, and readmissions to, the LTCH from onsite IRFs, SNFs, and psychiatric facil ities.)    Prior to triggering either of the 5 percent thresholds, such cases are to be evaluated and paid under the interrupted stay policy. (Presently, there is no interrupted stay policy for psychiatric facilities, so in the case of a LTCH patient who is directly readmitted from a psychiatric facility, there will be two LTC -DRG payments unless, and until, the number of such readmissions (counted along with readmissions from an onsite IRF or SNF) reach the 5 percent threshold.)   The LTCHs were required to notify their A/B MACs (A) about the providers with which they are co -located within 60 days of their first cost reporting period that began on or after October 1, 2002.  A change in co- located status must be reported to the A/B M ACs (A) within 60days of such a change.  The implementation of the onsite policy is based on information maintained by A/B MACs (A) on other Medicare providers co- located with LTCHs. A/B MACs (A) notify the CMS RO of such arrangements.   Payments under this policy are determined at cost report settlement.   Beginning FY 2005, an additional payment adjustment was established for LTCH HwHs and satellites of HwHs relating to the percentage of patients discharged during a specific cost reporting period that were admitted from their host hospital.  Effective for c ost reporting periods beginning on or after July 1, 2007, the payment adjustment that governs LTCH HwHs and satellites of HwHs discharging patients from their host hospital was extended to govern discharges from all LTCHs (not already addressed by the exis ting policy) that are admitted from any referring hospital.  This policy adjustment includes discharges from grandfathered LTCH HwHs and LTCH satellites that were admitted from their host hospitals; LTCH and LTCH satellite discharges from referring hospi tals that are not co -located with the discharging facility; and discharges from free -standing LTCHs that were admitted from any referring hospital.  Basic Payment Formula under the 25 Percent Threshold Payment Adjustment for Medicare Discharges from Referring Hospitals   NOTE:   On December 29, 2007, the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) was enacted with mandated several modifications to this policy for a 3-year period beginning on the date of enactment of the Act.  For clarity, each modification to the  policy is specified in a bullet point immediately below the explanation of the particular aspect of the policy as it was effective on July 1, 2007.  The bullet points below also include additional amendments made by the enactment of the American Recovery and Reinvestment Act (ARRA) of 2009 on February 17, 2009, to the 25 percent threshold payment adjustment.  It is important to note that for those policies that operate on an October 1 cycle (i.e. pre -MMSEA regulations at 42 CFR 412.534), the ARRA has amended the MMSEA so that the MMSEA relief is effective for cost reporting periods beginning on or after October 1, 2009, and before October 1, 2010.  For policies that operate on a July 1 cycle, (e.g., pre -MMSEA regulations at 42 CFR 412.534(h)  and 412. 536) the ARRA amendments to the MMSEA relief are effective for cost reporting periods beginning on or after July 1, 2007 and before July 1, 2010.