(Medicare Claims Processing Manual)

150.10 - Facility-Level Adjustments  (Rev. 1547, Issued:  07-03- 08; Effective:  07 -01-08; Implementation:  07 -07-08)  Facility -level adjustments are based on individual LTCH characteristics.  The BIPA confers broad authority on the Secretary to include "appropriate adjustments to the long-term hospital payment system."  Variables examined include an area wage adjustment, adjustment for geographic reclassification, disproportionate share patient (DSH) percentage, and an adjustment for indirect medical education (IME).    The system includes an area wage adjustment that is being phased in over 5 years.  The wage adjustment is made by multiplying the labor- related share of the standard Federal rate by the applicable wage index value.    A LTCH's wage index is based on the Metropolitan Statistical Area (MSA) or rural area in which the hospital is physically located, without regard to geographic reclassification under http://www.ssa.gov/OP_Home/ssact/title18/1886.htm 1886(d)(8) - (10)  of the Act.  Effective July 1, 2005, an LTCH wage index is based on the Core- Based Statistical Area (CBSA).    The phase-in of the wage index adjustment is as follows:  Cost Reporting Periods Beginning During  Applicable Wage Index Value  FY 2003  1/5th of the value of the applicable pre- reclassification, no floor hospital inpatient wage index  FY 2004  2/5ths of the value of the applicable pre- reclassification, no floor hospital inpatient wage index  FY 2005  3/5ths of the value of the applicable pre- reclassification, no floor hospital inpatient wage index  FY 2006  4/5ths of the value of the applicable pre- reclassification, no floor hospital inpatient wage index  FY 2007  Full value (5/5ths) of the value of the applicable pre -reclassification, no floor hospital inpatient wage index   Based on analyses of patient charge data from FYs 2000 and 2001 MedPAR data and cost report data from FY 1998 and 1999 HCRIS data, there is no empirical evidence to support other adjustments.  Therefore, for the present, there are no adjustments for DSH, I ME, or geographic reclassification.   There is a cost -of-living adjustment (COLA) for LTCHs located in Alaska and Hawaii.   The adjustment is made by multiplying the nonlabor-related portion of the unadjusted standard Federal rate by the applicable COLA factor from OPM based on the county that the LTCH is located (similar to the COLA under the acute care hospital inpatient PPS) .   Annual updates for the LTCH PPS appear in Federal Register publications:  for payment rates and associated adjustments, see the LTCH PPS final rule with an effective date of July 1.  Annual updates of the LTC-DRGs are published in the IPPS final rule with an effective date of October 1.    The COLA factors effective July 1, 2004 are the same as under the acute care hospital inpatient PPS and are as follows:  Area  COLA Alaska:      All Areas  1.25 Hawaii:       Honolulu 1.25     Hawaii County 1.165     Kauai County 1.2325     Maui County 1.2375     Kalawao County 1.2375  Cost -of-Living Adjustment Factors: Alaska and Hawaii Hospitals Area Cost of Living Adjustment Factor effective for discharges on and after October 1, 2008.  Alaska: City of Anchorage and 80- kilometer (50 -mile) radius by road 1.24 City of Fairbanks and 80- kilometer (50 -mile) radius by road 1.24 City of Juneau and 80-kilometer (50-mile) radius by road 1.24 Rest of Alaska 1.25  Hawaii:  City and County of Honolulu 1.25 County of Hawaii 1.17  County of Kauai 1.25  County of Maui and County of Kalawao 1.25   150.10.1 - Phase -in Implementation  (Rev. 1, 10- 01-03)  The PPS for LTCHs is to be phased- in over a five- year period from cost -based reimbursement to Federal prospective payment.  During this transition period, payment is based on an increasing percentage of the LTCH prospective payment and a decreasing percentage of each LTCH's cost -based reimbursement rate for each dis charge as follows:   Cost Reporting Periods Beginning  On or After  LTCH PPS Federal Rate Percentage  TEFRA Rate Percentage  October 1, 2002, through September 30, 2003  20 80 October 1, 2003, through September 30, 2004  40 60 October 1, 2004, through September 30, 2005  60 40 October 1, 2005, through September 30, 2006  80 20 October 1, 2006  100 0  The LTCHs can exercise a one- time irrevocable option to elect payment based on 100 percent of the Federal rate rather than transition from cost -based reimbursement to prospective payment.  To exercise this option, for cost reporting periods beginning on or after October 1, 2002, and before December 1, 2002, the LTCH was to notify its A/B MAC (A) of this election in writing, and it was to be received by the A/B MAC (A) no later than November 1, 2002.  To exercise this option, for cost reporting periods beginning on or after December 1, 2002, the LTCH must notify its A/B MAC (A) in writing 30 days prior to the start of the LTCH's next cost reporting period.  Payments to new LTCHs, i.e., a hospital that has its first cost reporting period as a LTCH beginning on or after October 1, 2002, are made based on 100 percent of the standard Federal rate.   NOTE:  under the BIPA, during cost reporting periods beginning during FY 2001, target amounts under TEFRA were increased by 25 percent.  This increase will continue to be in effect for the TEFRA portion of transitions payments.  150.11  - Requirements for Provider Education and Training  (Rev. 1, 10- 01-03)  Training resources are available for A/B MAC (A) staff to use in training providers about the Long Term Care Hospital Prospective Payment System (LTCH PPS).  The train -the-trainer process for LTCH PPS does not include in-  person instruction for A/B MACs (A ).  Instead, CMS provides various educational resources for A/B MACs (A) to learn about LTCH PPS.   The CMS provides the following LTCH PPS education resources for A/B MACs (A):   A training guide is available on; http://www.cms.gov/Medicare/Medicare- Fee-for-Service- Payment/LongTermCareHospitalPPS/ltch_train.html, the actual Training Guide can then be downloaded;    A training video was mailed to A/B MACs (A);   A PowerPoint presentation for training providers is available on http://www.cms.gov/Medicare/Medicare- Fee-for-Service-Payment/LongTermCareHospitalPPS/ltch_train.html, the actual Power Point presentation can then be downloaded; and   An e -mail mailbox was established to address questions.  Send questions to: LTCHPPS@cms.gov .  150.12 - Claims Processing and Billing (Rev. 1, 10-01-03)  150.12.1 - Processing Bills Between October 1, 2002, and the Implementation Date  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD-10: Upon Implementation of ICD -10, Implementation: ICD-10: Upon Implementation of ICD-10, ASC X12: September, 23 2014)  Claims submitted prior to implementation were processed under the current methodology.  On or after January 1, 2003, submit mass adjust claims under the PPS payment methodology by April 30, 2003.  The shared systems is creating a mass adjustment program.  Beginning October 16, 2003, all LTCHs are required to comply with the HIPAA Administrative Simplification Standards, unless they have obtained an extension in compliance with the Administrative Compliance Act to submit claims in compliance with the standards at 42 CFR 162.1002 and 45 CFR 162.1192 using the ICD.  All ICD coding must be used for LTCH providers with cost reporting period beginning on or after October 1, 2002.  150.13 - Billing Requirements Under LTCH PPS  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD-10: Upon Implementation of ICD -10, Implementation: ICD-10: Upon Implementation of ICD-10, ASC X12: September, 23 2014)   Billing LTCH PPS Services   Effective with cost reporting periods beginning on or after October 1, 2002, LTCHs are to incorporate the following so that A/B MACs (A) accurately price and pay a claim under the LTCH PPS.  These claims must be submitted on Type of Bill 11X.  This is a DRG - based payment system; therefore the LTCH DRG is determined by the grouping of diagnosis codes reported on the claim for the  principal diagnosis, up to twenty four additional diagnoses, and up to twenty five  procedures performed during the stay, as well as age, sex, and discharge status of the patient on the claim.  Grouper software will determine DRG assignment.   Each bill from an LTCH must contain the complete diagnosis and procedure coding for purposes of the GROUPER software.  Normal adjustments will be allowed.  LTCH providers submit one admit through discharge claim for the stay.  Final PPS payment is based upon the discharge bill (note that the day in which benefits exhaust is considered a discharge for payment purposes).  Effective December 3, 2007, once a patients Medicare benefits exhaust, the LTCH is allowed to submit no-pay bills until physical discharge or death.  150.14 - Stays Prior to and Discharge After PPS Implementation Date  (Rev. 1, 10-01-03)  If the patient's stay begins prior to and ends on or after the provider's first fiscal year begin date under LTCH PPS, payment to the facility is based on LTCH PPS rates and rules.  There is no split billing.  If the facility submitted an interim bill, a debit/credit adjustment must be made prior to PPS payment.  If the facility submits multiple interim bills, the provider needs to submit cancels for all bills and then rebill once the cancels are accepted.  150.14.1 - Crossover Patients in New LTCHs  (Rev. 267, Issued 07-30- 04, Effective: 10 -01-04, Implementation: 01-03-05)  When a hospital undergoes a change in ownership or a change in classification from an acute care hospital to a LTCH, payment issues arise for cross -over patients who were admitted prior to the change in classification who are still hospitalized under the new provider number.  Since all LTCHs are required to be certified as hospitals and generally be paid under the IPPS, for 6 months prior to designation as a LTCH, in 42 CFR 412.23(e), there are cross-over patients, at the creation of every LTCH, who wer e admitted to the facility when it was an acute care hospital.  The policy was to discharge the patient under the acute provider number and readmit the patient under the new LTCH provider number (see section 100.4.1 of this chapter).  Medicare paid twice f or what was really one episode of care since separate payment would be made to both the acute hospital and the LTCH.  Effective October 1, 2004, Medicare will issue one discharge-based payment to the LTCH that discharges the patient, under the applicable payment system.   In the regulations at 42 CFR 412.521(e) we provide a payment methodology for such cases in which Medicare will consider all the days of the patient stay in the facility (both prior to and following the date of LTCH designation) to be a single episode of LTCH care. Payment for this single episode of care will include the day and cost data for that patient at both the acute care hospital and the LTCH in determining the payment to the LTCH under the LTCH PPS.  Furthermore, the days of the patients stay both prior to and following designation as a LTCH are counted in determining the patients total length of stay at the LTCH both for payment purposes as well as for the LTCHs avera ge length of stay (ALOS) calculation under 42 CFR 412.23(e)(2) and (3).