42 C.F.R. § 412.529 Special payment provision for short-stay outliers.
Title 42 - Public Health
Link to an amendment published at 71 FR 48141, Aug. 18, 2006. (a) Short-stay outlier defined. “Short-stay outlier” means a discharge with a length of stay in a long-term care hospital that is up to and including five-sixths of the geometric average length of stay for each LTC-DRG. (b) Adjustment to payment. CMS adjusts the hospital's Federal prospective payment to account for any case that is determined to be a short-stay outlier, as defined in paragraph (a) of this section, under the methodology specified in paragraph (c) of this section. (c) Method for determining the payment amount. (1) For discharges from long-term care hospitals described under §412.23(e)(2)(i), occurring before July 1, 2006, the LTCH prospective payment system adjusted payment amount for a short-stay outlier case is the least of the following amounts: (i) 120 percent of the LTC–DRG specific per diem amount determined under paragraph (d)(1) of this section; (ii) 120 percent of the estimated cost of the case determined under paragraph (d)(2) of this section; or (iii) The Federal prospective payment for the LTC–DRG determined under paragraph (d)(3) of this section. (2) For discharges occurring on or after July 1, 2006, from long-term care hospitals described under §412.23(e)(2)(i), the LTCH prospective payment system adjusted payment amount for a short-stay outlier case is the least of the following amounts: (i) 120 percent of the LTC–DRG specific per diem amount determined under paragraph (d)(1) of this section; (ii) 100 percent of the estimated cost of the case determined under paragraph (d)(2) of this section; (iii) The Federal prospective payment for the LTC–DRG as determined under paragraph (d)(3) of this section; or (iv) An amount payable under subpart O computed as a blend of an amount comparable to the hospital inpatient prospective payment system per diem amount determined under paragraph (d)(4)(i) of this section and the 120 percent of the LTC–DRG specific per diem payment amount determined under paragraph (d)(1) of this section. (A) The blend percentage applicable to the 120 percent of the LTC–DRG specific per diem payment amount determined under paragraph (d)(1) of this section is determined by dividing the covered length-of-stay of the case by the lesser of five-sixths of the geometric average length of stay of the LTC–DRG or 25 days, not to exceed 100 percent. (B) The blend percentage of the amount determined under paragraph (d)(4)(i) of this section is determined by subtracting the percentage determined in paragraph (A) from 100 percent. (3) Short-stay outlier payments. (i) For discharges occurring on or after October 1, 2002 and before August 8, 2003, no reconciliations are made to short-stay outlier payments upon cost report settlement to account for differences between the estimated cost-to-charge ratio and the actual cost-to-charge ratio of the case. (ii) For discharges occurring on or after August 8, 2003, short-stay outlier payments are subject to the provisions of §412.84(i)(1), (i)(3), and (i)(4) and (m) for adjustments of cost-to-charge ratios. (iii) For discharges occurring on or after October 1, 2003, short-stay outlier payments are subject to the provisions of §412.84(i)(2) for adjustments to cost-to-charge ratios. (d) Calculation of alternative payment amounts. (1) Determining the LTC–DRG per diem amount. CMS calculates the LTC–DRG per diem amount for short-stay outliers for each LTC–DRG by dividing the product of the standard Federal payment rate and the LTC–DRG relative weight by the geometric average length of stay of the specific LTC–DRG multiplied by the covered days of the stay. (2) Determining the estimated cost of a case. To determine the estimated cost of a case, CMS multiplies the hospital-specific cost-to-charge ratio by the Medicare allowable charges for the case. (3) Determining the Federal prospective payment for the LTC–DRG. CMS calculates the Federal prospective payment for the LTC–DRG by multiplying the adjusted standard Federal payment rate by the LTC–DRG relative weight. (4) Determining the amount comparable to the hospital inpatient prospective payment system per diem amount. (i) General. Under Subpart O, CMS calculates— (A) An amount comparable to what would otherwise be paid under the hospital inpatient prospective payment system based on the sum of the applicable operating inpatient prospective payment system standardized amount and the capital inpatient prospective payment system Federal rate in effect at the time of the LTCH discharge. (B) An amount comparable to the hospital inpatient prospective payment system per diem amount for each DRG that is determined by dividing the amount that would otherwise be paid under the hospital inpatient prospective payment system computed under paragraph (A) of this section by the hospital inpatient prospective payment system geometric average length of stay of the specific DRG multiplied by the covered days of the stay. (C) For purposes of the blend amount described in paragraph (c)(2)(iv) of this section, the payment amount specified under subparagraph (B) of this section may not exceed the full amount comparable to what would otherwise be paid under the hospital inpatient prospective payment system determined under subparagraph (A) of this section. (ii) Hospital inpatient prospective payment system operating standardized amount. The hospital inpatient prospective payment system operating standardized amount— (A) Is adjusted for the applicable hospital inpatient prospective payment system DRG weighting factors. (B) Is adjusted for different area wage levels based on the geographic classifications set forth at §412.64(b)(1)(ii)(A) through (C) and the applicable hospital inpatient prospective payment system labor-related share, using the applicable hospital inpatient prospective payment system wage index value for non-reclassified hospitals. For LTCHs located in Alaska and Hawaii, this amount is also adjusted by the applicable hospital inpatient prospective payment system cost of living adjustment factors. (C) Includes, where applicable, adjustments for indirect medical education costs and the costs of serving a disproportionate share of low-income patients. (iii) Hospital inpatient prospective payment system capital Federal rate. The hospital inpatient prospective payment system capital Federal rate— (A) Is adjusted for the applicable inpatient prospective payment system DRG weighting factors. (B) Is adjusted for the applicable geographic adjustment factors, including local cost variation based on the geographic classifications set forth at §412.64(b)(1)(ii)(A) through (C) and the applicable full hospital inpatient prospective payment system wage index value for non-reclassified hospitals and, applicable large urban location cost of living adjustment factors for LTCHs in Alaska and Hawaii, if applicable. (C) Includes, where applicable, adjustments for indirect medical education costs and the costs of serving a disproportionate share of low-income patients. (e) Short-stay outlier payments to long-term care hospitals described under §412.23(e)(2)(ii). (1) For discharges occurring on or after October 1, 2002, through June 30, 2003, the LTCH prospective payment system adjusted payment amount for a short-stay outlier case is the least of the following amounts: (i) 120 percent of the LTC–DRG specific per diem amount determined under paragraph (d)(1) of this section; (ii) 120 percent of the estimated cost of the case determined under paragraph (d)(2) of this section; or (iii) The Federal prospective payment for the LTC–DRG determined under paragraph (d)(3) of this section. (2) For discharges occurring on or after July 1, 2003, subject to the provisions of paragraph (e)(2)(v) of this section, the adjusted payment amount for a short-stay outlier is determined under the formulas set forth in paragraphs (e)(1)(i) through (iv) of this section with the following substitutions: (i) For the first year of the transition period, as specified at §412.533(a)(1), the 120 percent specified for the LTC–DRG specific per diem amount and the 120 percent of the cost of the case in the formula under paragraphs (e)(1)(i) and (e)(1)(ii) of this section are substituted with 195 percent. (ii) For the second year of the transition period, as specified at §412.533(a)(2), the 120 percent specified for the LTC–DRG specific per diem amount and the 120 percent of the cost of the case in the formula under paragraphs (e)(1)(i) and (e)(1)(ii) of this section are substituted with 193 percent. (iii) For the third year of the transition period, as specified at §412.533(a)(3), the 120 percent specified for the LTC–DRG specific per diem amount and the 120 percent of the cost of the case in the formula under paragraphs (e)(1)(i) and (e)(1)(ii) of this section are substituted with 165 percent. (iv) For the fourth year of the transition period, as specified at §412.533(a)(4), the 120 percent specified for the LTC–DRG specific per diem amount and 120 percent of the cost of the case in the formula under paragraphs (e)(1)(i) and (e)(1)(ii) of this section are substituted with 136 percent. (v) For discharges occurring in cost reporting periods beginning on or after October 1, 2006 (beginning with the fifth year of the transition period), as specified at §412.533(a)(5), short-stay outlier payments are made based on the least of the following amounts: (A) 120 percent of the LTC–DRG specific per diem amount determined under paragraph (d)(1) of this section; (B) 120 percent of the estimated cost of the case determined under paragraph (d)(2) of this section; or (C) The Federal prospective payment for the LTC–DRG determined under paragraph (d)(3) of this section. [67 FR 56049, Aug. 30, 2002, as amended at 68 FR 34163, June 6, 2003; 68 FR 34515, June 9, 2003; 71 FR 27899, May 12, 2006]
Title 42: Public Health
PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES
Subpart O—Prospective Payment System for Long-Term Care Hospitals
§ 412.529 Special payment provision for short-stay outliers.
