The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2026.
Specifically, the rule proposes to:
- Increase the standard LTCH PPS rate by a net 2.7%, after the 0.8% productivity adjustment and budget neutrality adjustment,s from $49,383 to $50,729, 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.
- Continue paying cases at the site neutral rate if they fail to meet LTCH criteria.
- Increase the high-cost outlier (HCO) threshold by 18% for standard LTCH cases from the current $77,048 to $91,247, to achieve the target of paying roughly 8% of aggregate LTCH payments as HCO payments.
- Use the inpatient PPS cost outlier threshold proposed at $44,205 for site-neutral cases.
- Update the LTCH Quality Reporting Program by removing four standardized patient assessment data elements focused on social determinants of health and modifying the COVID-19 vaccine among patients and residents measure to exclude patients who expire.
- Seek input through a Request for Information on opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. Members may submit comments to the CMS.:
The MHA continues to review the proposed rule and will provide LTCHs with an estimated impact analysis in the next few weeks. The MHA encourages hospitals to review the proposed rule and submit comments to the CMS by June 10 and to notify Vickie Kunz at the MHA regarding questions or issues identified by May 27.