CMS Releases FY 2024 LTCH Prospective Payment System Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) long-term care hospital (LTCH) prospective payment system for federal fiscal year (FY) 2024. When all proposed changes are considered, the rule is estimated to result in a 2.5% decrease in Medicare FFS payments. The MHA opposes this reduction given the historical inflationary increases faced by hospitals for labor, equipment, supply and drug costs. Specifically, the proposed rule would:

  • Provide a net 3.3% increase in the standard LTCH PPS rate from $46,433 to $47,948, for LTCHs that meet the CMS quality program reporting requirements. Facilities that fail to meet these requirements are subject to a two percentage point reduction to the annual update.
  • Increase the high-cost outlier (HCO) threshold for standard LTCH cases by 245% from the current $38,518 to $94,378, to achieve the target of paying roughly 8% of aggregate LTCH payments as HCO payments. This increase will result in a dramatic decrease in the number of cases qualifying for an outlier payment.
  • Pay all site-neutral cases at the site-neutral rate since the public health emergency will end May 11, resulting in ending the requirement all LTCH cases be paid based on the standard LTCH rate regardless of whether they met LTCH criteria.
  • Update the cost outlier threshold for site-neutral cases to mirror that of the proposed inpatient PPS threshold of $40,732, up 4.8% from the current $38,859.
  • Update the LTCH quality reporting program (QRP) by adopting two new measures, modifying the COVID-19 Vaccination Coverage among Healthcare Personnel measure and removing two measures.
  • Increasing the data completion threshold beginning with the FY 2026 LTCH QRP. The CMS would require LTCHs to report 100% of the required quality measure data and standardized assessment data collected using the LTCH CARE Data Set tool on at least 90% (instead of 80%) of assessments submitted to the CMS. If LTCHs fail to meet this requirement, they would be subject to a 2% point reduction to their applicable annual update.

The MHA continues to review the proposed rule and will provide hospitals with an estimated impact analysis in the near future. The MHA will share its draft comments with members when available and encourages members to provide comments to Vickie Kunz at the MHA by June 1 for consideration in the MHA’s comments. The CMS will accept comments on the proposed rule through June 9, with a final rule expected around Aug. 1, for the Oct. 1 effective date.

Members with questions should contact Vickie Kunz at the MHA.