CMS Releases Final Rule for Long Term Care Hospitals

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service long term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2021, which begins Oct. 1. Key information from the final rule includes:

  • Providing a net 2.5% increase in the standardized operating rate for cases that meet clinical criteria for services provided at LTCHs that successfully comply with the LTCH quality reporting program (QRP) requirements.
  • Paying all site-neutral cases, defined as cases that do not meet the established clinical criteria, at the site-neutral rate, rather than based on a 50/50 blend of the LTCH PPS and site-neutral rates. Site neutral payments rates are the lower of the inpatient PPS-comparable per-diem amount, including any outlier payments, or 100% of the cost of the case.
  • Rebasing and revising the LTCH marketbasket to reflect more current LTCH costs.
  • Updating the wage index values used for the LTCH PPS, including a 5% stop loss provision to ensure that the wage index for each facility is at least 95% of its FY 2020 value.
  • Making no changes to the LTCH QRP.

The MHA will provide a hospital-specific analysis and a summary of the final rule within the next few weeks. Due to the pandemic, the CMS waived the typical timeline that requires release of a final rule by Aug. 1. Members with questions should contact Vickie Kunz at the MHA.