Medicare Long Term-Care Hospital Prospective 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 (PPS) for fiscal year (FY) 2022. Provisions of the proposed rule would take effect Oct. 1, 2021, unless otherwise noted and would:

  • Provide a net 2.4% increase to the LTCH standard operating rate, after budget neutrality, for facilities that comply with the CMS quality reporting program (QRP) requirements.
  • Continue to pay all site-neutral cases at the full site-neutral rate, instead of the prior 50/50 blend of LTCH PPS and site-neutral rates. The CMS projects that site-neutral payments would account for 10% of all Medicare payments to LTCHs in FY 2022.
  • Adapt certain methodologies used to calculate the annual payment update to account for the impact of the COVID-19 public health emergency (PHE). Specifically, the CMS proposes to use pre-PHE data from FY 2019 to set the FY 2022 payment rates.
  • Increase the high-cost outlier threshold by 20% from $27,195 to $32,680 for cases paid at the standard LTCH rate. The outlier threshold for cases paid at the site-neutral rate would continue to mirror the inpatient PPS outlier threshold, proposed at $30,967.
  • Seek input via a formal request for information on closing the health equity gap in CMS quality programs. Specifically, the CMS seeks input on ways to revise several related CMS programs to make reporting of health disparities based on social risk factors, race and ethnicity more comprehensive and actionable for hospitals, providers and patients.
  • Expand the LTCH QRP to assess the rate of COVID-19 Vaccination Coverage Among Health Care Personnel measure.
  • Update the denominator of the Transfer of Health Information to the Patient (TOH-Patient) measure to exclude patients discharged to their homes under the care of a home health agency or hospice.
  • Begin public reporting for two quality measures affected by the COVID-19 reporting exemptions.

The MHA will provide LTCHs with an impact analysis in the coming weeks. The association encourages LTCHs to review the proposed rule and submit comments to the CMS by June 28. A final rule is expected by Aug. 1 for the Oct. 1 effective date.  Members with questions should contact Vickie Kunz at the MHA.