CMS Pub. 100-04, ch. 3, § 190.7.4

The IPF PPS includes a stop-loss provision during the 3-year transition. The purpose is to

ensure each facility receives an average payment per case under the IPF PPS that is no less

than 70 percent of its average payment under the TEFRA. It is calculated at cost report

settlement. New providers are not eligible for stop-loss payments. See §190.9.1.

Example of stop-loss calculation in year 3 of the transition:

1. Enter Total (100%) TEFRA payments for cases during cost reporting period

2. Enter Total (100%) PPS payments for cases during cost reporting period

3. Multiply Step 1 by 0.70.

4. If Step 3 is greater than Step 2, subtract Step 2 from Step 3. Otherwise, enter 0.

5. Add Steps 2 and 4 to calculate total PPS payments.

6. Multiply Step 1 by 0.25 to calculate the TEFRA portion.

7. Multiply Step 5 by 0.75 to calculate the PPS portion.

8. Add Steps 6 and 7 to calculate the IPF’s aggregate payments in the third year of the

IPF PPS. Determine if this amount is at least 70 percent of what would have been paid

under TEFRA, then pay the difference.

NOTE: Since the transition will be completed for RY 2009, for cost reporting periods

beginning on or after January 1, 2008, IPFs will be paid 100 percent PPS and, therefore,

the stop loss provision will no longer be applicable. The CMS has previously stated that

we would remove this 0.39 percent adjustment to the Federal per diem base rate after the

transition. Therefore, for RY 2009, the Federal per diem base rate and ECT rates will be

increased by 0.39 percent.