Long Term Care Hospital (LTCH) Prospective Payment System (PPS) Interrupted Stay Policy

Published 01/10/2018

Palmetto GBA has identified an increase in claim overlap disputes and claim cancelations resulting from the Long Term Care Hospital (LTCH) Prospective Payment System (PPS) Interrupted Stay Policy. Medicare facilities need to be aware of their patients’ care status when providing services to avoid possible inappropriate claim submission. Please make sure that your billing staffs are aware of the LTCH three-day interrupted stay policy and share the CMS Medicare Learning Network® (MLN) Long Term Care Hospital Prospective Payment System Payment System Series Fact Sheet (PDF, 613 KB).

Interrupted Stay
An interrupted stay occurs when a patient discharges from a LTCH and, after a specific number of days, readmits to the same LTCH for further medical treatment. For example, a LTCH patient may be discharged for treatment and services that are not available in the LTCH. Each stay is evaluated separately to make certain that it meets the interrupted stay criteria. A case may have multiple interrupted stays. A case with interrupted stays may be eligible for other case-level adjustments (such as the high cost outlier payment). The two types of interrupted stays are three-day or less interruption of stay and greater than three-day interruption of stay.

1) Three-Day or Less Interruption of Stay
For discharges and readmissions to the same LTCH within three days, the patient may:

  • Receive outpatient or inpatient tests, treatment, or care at an inpatient acute care hospital, Inpatient Rehabilitation Facility (IRF), or Skilled Nursing Facility (SNF)/Swing Bed
  • Have an intervening patient stay at home for up to three days without the delivery of additional tests, treatment, or care

Any test, procedure, or care provided to a LTCH patient on an outpatient basis and any inpatient treatment during the interruption is the responsibility of the LTCH under arrangements, which means that such care (including inpatient surgical care at an inpatient acute care hospital) are part of that single episode of LTCH care and bundled into the LTCH payment. The LTCH must pay any other providers without additional Medicare Program payment liability. If the patient receives any tests or procedures any time during the three-day interruption and the LTCH makes payment to the intervening provider under arrangements, the total day count for the patient includes all days of the interruption. If the patient does not receive any care during the three-day interruption, the total day count for the patient stay does not include the days away from the LTCH.

If a patient discharges to home and returns to the LTCH within three days without getting additional medical treatment, the days away from the LTCH are not included in the total length of stay (LOS); however, if he or she receives treatment on any of the three days (for which the LTCH is responsible for under arrangements), the days must be counted in the total LOS.

2) Greater than Three-Day Interruption of Stay
If a patient is discharge to an inpatient acute care hospital, IRF, or SNF/Swing Bed and then readmitted after three days, these fixed-day periods apply:

  • Inpatient acute care hospital – Between four and nine days
  • IRF – Between four and 27 days
  • SNF/Swing Bed – Between four and 45 days

To meet the full definition of a greater than three-day interruption of stay, the patient must also be discharged:

  • Directly from the LTCH and admitted directly to an inpatient acute care hospital, IRF, or SNF/Swing Bed
  • Back to the original LTCH after a LOS that falls within the applicable fixed-day period

The interrupted stay day count begins on the day of discharge from the LTCH and continues until the ninth, twenty-seventh, or forty-fifth day after discharge (depending on the facility type). Although the greater than three-day interruption of stay policy governs from the 4th day forward, the day count of the interruption begins on the first day the patient is away from the LTCH. For example, if a patient leaves the LTCH on Monday and returns during the same week on Wednesday, Wednesday is considered day three.

If the applicable interrupted stay criteria are met, the days prior to the original discharge from the LTCH are added to the number of days following the readmission at the receiving facility. The days before and after an interrupted stay determine the total LOS for the episode of care.

If the patient is discharged to home; the greater than three-day interruption of stay adjustment will not apply. If, however, the patient is discharged to home for three days or less, the three-day or less interruption of stay adjustment applies as described above. If the patient's stay at an inpatient acute care hospital, IRF, or SNF/Swing Bed falls respectively within the fixed-day period, when the patient is readmitted to the LTCH; the entire stay is considered an interrupted stay. The LTCH will receive one payment (either a full MS-LTC-DRG payment or an adjusted SSO payment, as applicable) based on the initial admission. The payment for an interrupted stay is eligible for a high cost outlier payment, as applicable. The inpatient acute care hospital, IRF, or SNF/Swing Bed receives a separate payment if the greater than three-day interruption of stay policy governs the patient stay. If the interruption in the LTCH stay exceeds the fixed-day period, the readmission to the LTCH is treated as a separate LTCH stay, and the LTCH will be paid an additional payment when the patient is discharged.

If the applicable interrupted stay criteria are met, the LTCH should not change the principal diagnosis when the patient returns to the LTCH from the receiving facility. If other medical conditions are apparent on the patient’s return, the additional diagnosis codes should be noted on the claim.  Further information is at: CMS IOM Publication 100-4, Chapter 3, Section 150 (PDF, 2.2 MB) — Long Term Care Hospitals (LTCHs) PPS and 150.9.1.2 — Interrupted Stays.