CMS Pub. 100-02, ch. 5, § 30.4.2.2

Admission - Discharge Before October 1, 1997

(Rev. 1, 10-01-03)

A3-3106.2.D.2.b, HO-219 .2.D.2.b

If the beneficiary enters the hospital after completely exhausting regular benefit days,

available lifetime reserve days will be used automatically for each day of the stay unless

the beneficiary elects not to use lifetime reserve days or is deemed to have elected not to

use lifetime reserve days. A beneficiary is deemed to have elected not to use lifetime

reserve days if the total charges for the stay, i.e., the charges for which the beneficiary

would be liable by electing to not use lifetime reserve days, are equal to or less than the

charges for which the beneficiary would be liable even after electing to use lifetime

reserve days. In the latter case, charges are equal to 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 §30.1(3).)

In the case of a hospital reimbursed under the prospective payment system, an election by

a beneficiary not to use lifetime reserve days must apply to the entire hospital stay. If the

beneficiary elects not to use lifetime reserve days, Medicare will not pay for any portion

of the stay. Similarly, a deemed election not to use lifetime reserve days must apply to

the entire stay and will preclude any payment for the stay.

EXAMPLE 5:

Mr. Amos was admitted to a hospital on March 10, 1995, and discharged on June 8

utilizing 90 regular days of coverage. On August 1, he entered the hospital again and was

discharged on September 8. For this DRG, outlier days began on August 26. At the time

of the second admission, Mr. Amos still had 60 lifetime reserve days available. The

hospital charges for this stay were $17,000. The sum of the coinsurance amounts for the

lifetime reserve days needed to pay for this stay is $15,428 ($406 per day X 38 days).

Since the charges for the stay are greater than the sum of lifetime reserve days

coinsurance amounts, there is no deemed election not to use lifetime reserve days. Mr.

Amos has the option:

1. To make no lifetime reserve election, in which case Medicare will pay for the

entire stay including the outlier days, and Mr. Amos will use 38 lifetime reserve

days; or

2. To elect not to use lifetime reserve days, in which case Medicare will not pay for

any portion of the stay.

EXAMPLE 6:

Same facts as Example 5 except the beneficiary has only 35 lifetime reserve days

available at the time of the second admission and total charges for the stay are $13,000.

Included in the hospital charges is $1,200 for the last 3 days of the stay. The sum of the

coinsurance amounts for the lifetime reserve days that could be used is $14,210 ($406 per

day X 35 days). Since the charges for the entire stay, $13,000, are less than $15,410 (the

sum of the coinsurance amounts for days for which lifetime reserve days are available

($14,210) plus the total charges for the outlier days for which lifetime reserve days are

not available ($1,200)), the beneficiary is deemed to have elected not to use any lifetime

reserve days for the stay.