Long-term Acute-care Hospital Payment System Proposed Rule Released

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 for fiscal year (FY) 2023.  The proposed rule would:

  • Increase the standard federal rate by a net 2.8% for cases that meet LTCH criteria.
  • Continue paying site-neutral cases at the full-site neutral rate, instead of the prior 50/50 blend of LTCH and site-neutral rates.
  • Establish a cost outlier threshold of $44,182 for cases paid based on the LTCH standard rate, up 34% from the current $33,015 threshold, resulting in fewer cases qualifying for an outlier payment. The CMS adjusts this threshold annually to maintain outlier payments at the targeted 8% of aggregate LTCH payments.
  • Cap annual wage index decreases at 5%.
  • Cap annual decreases at 10% for Medicare Severity Long-term Care Diagnosis-related Group relative weights to mitigate negative impacts of significant weight decreases.
  • Seek input on strategies to improve measurement of disparities in health outcomes. Through a Request for Information, the CMS requests input on its framework to collect, stratify and report quality performance across the CMS programs including specific methods that could be used within the LTCH quality reporting program (QRP).
  • Request input on the potential inclusion of an updated healthcare-associated infection measure in the LTCH QRP. The National Healthcare Safety Network Healthcare-associated Clostridioides difficile infection (CDI) Outcome Measure would improve upon the CDI measure currently used in the LTCH QRP by using data from electronic health records.

The MHA is continuing to review the proposed rule and will provide hospitals with an estimated impact analysis soon. The association will also share its draft comments with members when available. The CMS will accept comments on the proposed rule until June 17. Members with questions should contact Vickie Kunz at the MHA.