CMS Pub. 100-02, ch. 5, § 30.1

A3-3106.2.A, HO-219.2.A

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 described in §30.3 below.

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. Where the

hospital discovers the patient has fewer than five regular coinsurance days left, it should

immediately notify the patient of this option. The hospital should annotate its records at

the time that it informed the patient of this option. In addition, it should make available

an appropriate election statement or form to be included in the patient's hospital record if

the patient elects not to use reserve days. (See §40.1 for sample election format).

If a patient elects not to use reserve days, covered Part B services are billed on Form

CMS-1450 or the electronic equivalent to the A/B MAC (A). A Medicare beneficiary

who is eligible for medical assistance (Medicaid) under a State plan should be advised

that such assistance would not be available if the beneficiary elects not to use the lifetime

reserve days. However, this restriction on medical assistance payments does not apply to

cases where the beneficiary is deemed to have elected not to use lifetime reserve days.

In the following situations a beneficiary will be deemed to have elected not to use

lifetime reserve days:

1. 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

• The hospital is reimbursed on a cost reimbursement basis; or

• 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.

(See §§10.2 and 30.4.2.)

2. For the nonoutlier portion of a stay in a hospital reimbursed under the

prospective payment system (acute hospital PPS, inpatient rehabilitation facility (IRF)

PPS and a normal stay under long term care hospital (LTCH) PPS), if the beneficiary has

one or more regular (nonlifetime reserve) days remaining in the benefit period upon

admission to the hospital. (See §30.4.2.) Note the exception to this rule is the short stay

outlier policy under LTCH PPS.

3. The beneficiary has no regular days available at the time of admission to a

hospital reimbursed under the prospective payment system 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, i.e., the sum of the coinsurance amounts for the lifetime reserve days that

would be used plus the total charges for outlier days, if any, for which no lifetime reserve

days would be available because lifetime reserve days are exhausted. (See §30.4.2.)

EXCEPTION: Even though a beneficiary would otherwise be deemed to have elected

not to use lifetime reserve days, he or she will not be so deemed where benefits are

available from another third party payer to pay some or all of the charges and the third

party requires as a condition for payment that lifetime reserve days be used. In such

cases, lifetime reserve days will be used unless the beneficiary specifically elects not to

use them.