Lifetime reserve days
Each beneficiary has 60 lifetime reserve (LTR) days of inpatient hospital services available upon exhausting 90 regular benefit days (60 full / 30 coinsurance) in a benefit period. Payment will be made for LTR days unless the individual elects not to have such payment made.
A coinsurance amount equal to one-half of the inpatient hospital deductible applies to LTR reserve days. For example, the inpatient hospital deductible for 2021 is $1,484.00; the LTR coinsurance amount is 1/2 of $1,484.00, or $742.00.
Once LTR days are used, they cannot be renewed.
When a beneficiary receives inpatient services after all of their 90 regular days (60 full / 30 coinsurance) have been exhausted during a benefit period, the LTR days are used unless:
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The beneficiary, or medical power of attorney, indicates in writing they elect not to use LTR days;
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The beneficiary is 'deemed' to have elected not to use LTR days (the average daily charge for covered services is equal to or less than the coinsurance amount for the LTR days).
Election to not use LTR days
An election not to use lifetime reserve days may be made by the beneficiary (or by someone acting on his or her behalf) at the time of admission to a hospital or at any time thereafter, subject to the limitations on retroactive elections.
Hospitals are required to notify patients who have already used or will use 90 days of benefits in a benefit period that they can elect not to use their reserve days for all or part of a stay. The hospital notice should be given when the beneficiary has five regular coinsurance days left and is expected to be hospitalized beyond that period.
If a patient elects not to use reserve days, covered Part B services are billed on the CMS-1450 (UB-04) claim form or its electronic equivalent.
Deemed election to not use LTR days
The beneficiary is deemed to have elected not to use lifetime reserve days:
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The average daily charge for covered services furnished during a lifetime reserve billing period is equal to or less than the coinsurance amount for lifetime reserve days; and
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The hospital is reimbursed on a cost reimbursement basis; or
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The hospital is reimbursed under the prospective payment system and lifetime reserve days are needed to pay for all or part of the outlier days.
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If the beneficiary has one or more regular benefit days remaining in the benefit period upon admission to a prospective payment system (PPS) hospital.
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The beneficiary has no regular days available at the time of admission to a PPS hospital and the total charges for which the beneficiary would be liable, if lifetime reserve days are not used, is equal to or less than the charges for which the beneficiary would be liable if he or she used lifetime reserve days.
Election made prospectively
Ordinarily, an election not to use reserve days will apply prospectively. If the election is filed at the time of admission to a hospital, it may be made effective beginning with the first day of hospitalization or with any day thereafter. If the election is filed later, it may be made effective beginning with any day after the day it is filed.
Retroactive election
A beneficiary may retroactively elect not to use reserve days provided when:
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The beneficiary (or some other source) offers to pay the hospital for any of the services not payable under Part B; and
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The hospital agrees to accept the retroactive election.
In this case, the hospital will correct any claims already submitted.
A retroactive election not to use LTR days must be filed within 90 days following the beneficiary's discharge from the hospital, unless benefits are available from a third party payer to pay for the services and the hospital agrees to the retroactive election. In this case, the beneficiary may file an election not to use LTR days later than 90 days following discharge.
Period covered by election
Hospitals not reimbursed under PPS
A beneficiary election not to use LTR days for a particular hospital stay may apply to the entire stay or to a single period of consecutive days in the stay, but cannot apply to selected days in a stay. If an election, made prospectively or retroactively, not to use LTR days is made effective with the first day in which LTR days are available, it may be terminated at any time. After termination of the election, all hospital days would be covered to the extent that LTR days are available.
If an election not to use LTR days is made effective beginning with any day after the first day in which LTR days are available, it must remain in effect until the end of that stay unless the entire election is revoked.
Hospitals reimbursed under PPS
The rules described above apply to PPS hospitals. In addition, for PPS discharges on and after October 1, 1997, involving cost outlier status, a beneficiary whose 90 days of benefits are exhausted before cost outlier status is reached must elect to use LTR days for the hospital to be paid cost outlier payments.
Cost outlier status is reached on the day that charges reach the cost outlier status for the applicable diagnosis related groups for inpatient hospital PPS or case-mix groups for inpatient rehabilitation facility PPS. Use of reserve days must begin on the day following that day to permit payment for outlier charges.
If the beneficiary elects not to use LTR days where benefits are exhausted, the hospital may bill the beneficiary for charges that would have been paid as cost outlier.
Election not to use LTR days
A beneficiary's election not to use LRT days should specify the name of the hospital and the starting date of the election. For additional information and model language/format of the election, please refer to the CMS IOM Publication 100-02, Benefit Policy Manual, Chapter 5, Section 40.1.
Revocation of election
An election not to use LTR days may be revoked in whole or in part, provided a claim has not been filed for Part B ancillary services furnished on the hospital days in question.
The revocation must be submitted to the hospital, in writing, and should be made part of the patient's hospital record.
If a beneficiary is incapacitated, any of the individuals who are permitted to sign the Request for Payment may file the revocation on the beneficiary's behalf.
Note: An election not to use LTR days may not be revoked after the beneficiary dies.
A revocation of election not to use LTR days must be made within 90 days following the beneficiary's discharge from the hospital.
Exception: The election may be revoked later than 90 days after discharge if benefits are available from a private insurer to pay the LTR coinsurance amounts and the insurer requires as a condition for payment that LTR days be used.
The revocation of an election not to use LTR days should specify the name of the hospital, the admission date of the stay to which it applies and, if appropriate, the effective date of revocation.