Updates Proposed for Payment System for Long-term-care Hospitals

Posted on May 01, 2019

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for long-term-care hospitals (LTCHs) for fiscal year (FY) 2020. Highlights of the proposed rule, which take effect Oct. 1 unless otherwise noted, include:

  • For the 71% of cases expected to be paid using the LTCH standard rate, excluding budget neutrality, the proposal includes a net 2.3% marketbasket increase after the 3.2% marketbasket increase is reduced by the mandated 0.5 percentage point productivity adjustment, a 0.3% cut to reduce high-cost outlier payments and the second of three adjustments to offset the cost of permanently rescinding the LTCH 25% rule.    
  • For the 29% of LTCH cases expected to be paid an LTCH site-neutral rate, the CMS proposes a net decrease of 4.9%. Site-neutral payment rates are the lower of the inpatient PPS-comparable per diem amount, including any outlier payments or 100% of the estimated cost of the case. For cost reporting periods beginning on or after Oct. 1, 2019, site-neutral cases will receive the full site-neutral rate, rather than the currently effective blended rate.  
  • A significant payment cut for LTCHs where fewer than 50% of their Medicare FFS cases are paid based on the standard LTCH PPS payment. Specifically, LTCHs that fail to comply with the policy will have payments for all FFS cases in a subsequent cost reporting period reduced to an inpatient PPS-like amount.  
  • Adoption of two new process measures for the FY 2022 LTCH quality reporting program:‚Äč  
    • The “Transfer of Health Information to the Provider – Post Acute Care” measure would assess whether a current reconciled medication list is given to the subsequent provider when a patient is discharged or transferred from an LTCH to another facility.  
    • The “Transfer of Health Information to the Patient – Post Acute Care” would assess whether a current reconciled medication list is provided to the patient, family or caregiver when the patient is discharged from an LTCH to a private home.

In the coming weeks, the MHA will provide additional information regarding the proposed rule, including a facility-specific impact analysis. The association will also make its draft comments available and encourages members to submit their comments to the CMS prior to the June 24 due date. Members with questions should contact Vickie Kunz at the MHA.

Tags: Medicare, proposed rule, LTCH, PPS

Posted in: Member News

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