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 2025.
Specifically, the final rule:
- Increases the standard LTCH PPS rate by a net 2.6% from $48,117 to $49,383 for LTCHs that meet the CMS quality program reporting requirements. LTCHs that fail to meet these requirements are subject to a two percentage point reduction to the annual update.
- Rebases the market basket to use 2022 cost report data instead of 2017.
- Increases the high-cost outlier (HCO) threshold by 29% for standard LTCH cases from the current $59,873 to $77,048, to achieve the target of paying roughly 8% of aggregate LTCH payments as HCO payments.
- Continues to pay cases at the site neutral rate if they fail to meet LTCH criteria.
- Updates the cost outlier threshold for site-neutral cases to the inpatient PPS threshold finalized at $46,152, up from $42,750.
- Revises core based statistical areas as a result of the new Office of Management and Budget labor market delineations based on the 2020 Decennial Census.
- Updates the LTCH quality reporting program to require reporting of four new items to the LTCH Continuity Assessment Record and Evaluation Data Set, social determinant of health category. These include one item each for living situation and utilities and two items for food.
- Modifies the Transportation assessment item to simplify response options and revise the look-back period.
- Extends the window for admission assessments from three days to four, beginning with patients admitted on Oct. 1, 2026.
The MHA continues to review the final rule and will provide LTCHs with an updated estimated impact analysis in the next few weeks. Members with questions should contact Vickie Kunz at the MHA.