The Centers for Medicare & Medicaid Services (CMS) has issued the proposed rule for the long-term care hospital (LTCH) prospective payment system (LTCH PPS), as part of the inpatient prospective payment system (IPPS) for federal fiscal year (FFY) 2020. The provisions in the proposed rule, if finalized, would be effective Oct. 1.
CHA is reviewing the proposed rule and will issue a summary in the coming weeks. CHA will host a member forum to review the proposed rule’s provisions and to develop comments, which are due on June 24.
Below are highlights of the current proposed rule.
Overall, CMS estimates that spending on LTCH services will increase by 0.9 percent, or $37 million, in FFY 2020 as compared to FFY 2019.
CMS previously established a dual-rate payment system that began in FFY 2016, under which LTCHs receive a standard LTCH PPS payments for patients who meet specific criteria and relatively lower site-neutral payments for other patients. The system was implemented with a transition period, during which time LTCHs received a transitional blended rate for site-neutral patients. The transition period will conclude Oct. 1 and LTCHs will receive the full site-neutral payment rate for these cases.
For the 71 percent of patients expected to meet criteria for payment under the standard rate, CMS proposes an increase of 2.3 percent ($79 million), based on a 3.2 percent market basket increase, reduced by a statutorily required 0.5 percent cut for productivity, a 0.3 percent cut to reduce high-cost outlier (HCO) payments, and the second of three required adjustments to offset the permanent recission of the “25 percent” rule. CMS proposes an HCO threshold of $29,997.
CMS expects 29 percent of LTCH admissions to be paid on a site-neutral basis. CMS proposes a net decrease of 4.9 percent ($41 million) — largely due to the end of the transition period — and an HCO threshold of $26,994.
LTCH 50 Percent Rule
Under the “50 percent rule,” LTCHs must demonstrate that more than 50 percent of admitted Medicare patients are reimbursed under the LTCH PPS standard payment. For those that do not meet the threshold, CMS now proposes that payment for all fee-for-service cases in a subsequent cost reporting period be reduced to an amount comparable to the inpatient PPS rate, plus eligible HCO payment. CMS notes that, because compliance with the 50 percent rule cannot be calculated until after the end of a cost reporting period, payment adjustments would not be applied to the cost reporting period immediately, but to the first cost reporting period after compliance has been calculated and the provider has been notified of non-compliance.
CMS proposes to adopt two new process measures to the LTCH Quality Reporting Program (QRP), addressing the “Transfer of Health Information” domain as required by the Improving Medicare Post-Acute Care Transformation Act. Data collection on these measures would begin Oct. 1, 2020, and the measures would be incorporated into the LTCH QRP in FFY 2022. CMS also proposes to modify the existing “Discharge to Community” measure to exclude baseline nursing home residents. CMS also proposes to shift the implementation date of future versions of the LTCH CARE data set from April to October to align with the schedule used by other post-acute care settings.
Implementation of Standardized Patient Assessment Data Elements
Among CMS’ most notable proposals is the adoption of several standardized patient assessment data elements (SPADEs), as well as several new data elements related to social determinants of health, beginning Oct. 1, 2020. Corresponding elements are also currently proposed for addition to inpatient rehabilitation facilities and skilled-nursing facilities.