CMS Pub. 100-16, ch. 7, § 70.2.2

The Part C risk adjustment model applies a beneficiary’s institutional risk score to

payment in those payment months when the enrollee has long term institutional (LTI)

status. Unlike most factors in CMS-HCC risk adjustment models, which are recognized

in the year prior to the payment year, institutional status is recognized in the payment

year itself; this concurrent approach more accurately reflects treatment patterns upon

which costs are based.

To determine a beneficiary’s LTI status for payment purposes, CMS uses the reporting of

a 90-day assessment. This information is collected routinely from nursing homes, which

report to the States and CMS on at least a quarterly basis. This data is stored in the

Minimum Data Set (MDS). Payment at the long-term rate starts in the month following

the assessment date. Once persons are identified, they remain in long-term status until

discharged to the community for more than fourteen days. The costs of the short term

institutionalized (less than 90 days) are recognized in the community model.

Note that the institutional marker used for demographic payments is used differently from

the institutionalized marker that is used in the CMS-HCC risk adjustment model. The

institutional marker that was used in demographic payments increased payments over a

demographic base and had the effect of capturing the higher costs of older and sicker

people who go into skilled or unskilled levels of care. In the risk adjustment model, the

health status markers capture most of these characteristics.

Because CMS calculates initial and mid-year risk scores before it has complete data on

beneficiaries’ LTI status in the payment year, CMS uses the presence of a 90-day

assessment reported for any one month during the 12-month data collection period as a

proxy for LTI in the payment year. At the final payment reconciliation that takes place

post-contract year, CMS uses each beneficiary’s actual month-by-month LTI status in the

payment year to determine which risk score or multiplier to apply.

CMS turns on the LTI flag and applies an institutional risk score for initial payments

starting January of the payment year when a beneficiary has had a 90-day assessment

reported for any one month during July - June prior to the payment year (e.g., July 2008

through June 2009 for 2010 – this is the data collection period for initial payments).

CMS would apply this same score until it calculates the mid-year risk scores, at which

time CMS will update the LTI flag and institutional risk score if the person had a 90-day

assessment reported for any one month during data collection year (e.g., 2009 for 2010

payment year) for mid-year updates. (Mid-year scores take effect in July, and remain in

effect through the end of the contract year.)

Membership Monthly Report (MMR) fields specific to LTI status.

1. Part C LTI FLAG (field 20; position 67) - This flag means that the beneficiary has

been institutionalized for at least 90 days as of the payment month. CMS will turn on

LTI for risk adjustment when a beneficiary has a reported 90-day assessment. It

continues to be populated until the beneficiary has a more than 14-day absence from

the facility.

2. RA Factor Type Code (field 47; positions 189-90) – A value of "I" means that the

enrollee has been institutionalized 90+ days as of the payment month.