/ en Sat, 14 Jun 2025 22:38:58 -0500 Tue, 10 Jun 25 15:45:47 -0500 /lettercomment/2025-06-10-aha-comments-cms-long-term-care-hospital-fy-2026-proposed-payment-rule <p>June 10, 2025 </p><p>The Honorable Mehmet Oz, M.D.<br>Administrator<br>Centers for Medicare & Medicaid Services<br>7500 Security Boulevard<br>Baltimore, MD 21244-1850</p><p><em>Submitted Electronically</em></p><p><em><strong>Re: Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2026 Rates; Requirements for Quality Programs; and Other Policy Changes; 90 Fed. Reg. 18,002 (April 30, 2025).</strong></em></p><p>Dear Administrator Oz:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including approximately 230 long-term care hospitals (LTCHs), our clinician partners — more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS’) fiscal year (FY) 2026 LTCH prospective payment system (PPS) proposed rule. We are submitting separate comments on the rule’s inpatient PPS and Transforming Episode Accountability Model proposals.</p><p>LTCHs care for some of the most complex and severely ill Medicare beneficiaries. As CMS points out in this rule, more than 90 percent of Medicare patients are dependent on a ventilator when arriving at an LTCH, have spent three or more days in an intensive care unit (ICU), or both. These patients have high rates of complex wounds, chronic illness, and other factors that make the LTCH patient population a uniquely resource-intensive group. For this reason, LTCHs maintain a deeply specialized expertise that enables them to care for these patients and maximize their chances of recovery. Indeed, many acute-care hospitals rely on LTCHs as partners to care for patients with these specific high-acuity needs by transferring them to LTCHs.</p><p>Unfortunately, and as explained further in this letter, Medicare payment dynamics and related factors have caused a contraction of the LTCH field. This not only limits the ability of certain high-need patients from receiving care at an LTCH, but also strains the entire continuum of care as acute-care hospitals and other providers must find ways to care for these patients. This rule has several proposals that will exacerbate the ongoing difficulties within the LTCH field, particularly the large proposed increase in the high-cost outlier threshold. The AHA offers numerous recommendations to mitigate these effects, and we urge CMS to adopt them in the final rule.</p><p>While we have concerns about the payment updates for this proposed rule, the AHA appreciates CMS’ efforts to alleviate the reporting burden on providers. Specifically, the AHA supports CMS’ proposal to remove four standardized patient assessment data elements (SPADEs) from the LTCH QRP and greatly appreciates CMS’ recognition of the need to balance administrative burden and value in quality measurement programs. By streamlining reporting requirements, CMS can free providers to focus on the quality and safety issues that matter the most to their patients. In addition, the AHA appreciates CMS’ efforts around deregulation and is responding to CMS’ Request for Information (RFI) on approaches and opportunities to streamline regulations and reduce administrative burdens on providers.</p><p>Our detailed comments follow.</p> Tue, 10 Jun 2025 15:45:47 -0500 Long-Term Care PPS /news/headline/2025-06-10-reduced-fy-2026-ltch-payment-updates-inadequate-aha-tells-cms <p>The AHA expressed <a href="/system/files/media/file/2025/06/aha-comments-on-cms-long-term-care-hospital-fy-2026-proposed-payment-rule-letter-6-10-2025.pdf" target="_blank">concerns</a> (LINK) to the Centers for Medicare & Medicaid Services today on payment updates for the fiscal year 2026 proposed rule for the <a href="/news/headline/2025-04-11-cms-releases-fy-2026-proposed-rule-long-term-care-hospitals" target="_blank">long-term care hospital prospective payment system</a>. The updates include an insufficient market basket update and reduced overall payments to LTCHs due to an increase in the high-cost outlier fixed-loss amount.</p><p>“The inadequate market basket updates, including the misguided productivity adjustment, combined with the untenable rise in the HCO FLA, threatens to lead to further closures in a field that has already seen the number of hospitals decrease by 25% over the last 10 years,” the AHA wrote.</p><p>The AHA commented separately on the rule’s <a href="/system/files/media/file/2025/06/aha-comments-on-cms-fy-2026-inpatient-prospective-payment-system-proposed-rule-letter-6-10-2025.pdf" target="_blank">inpatient PPS</a> and <a href="/system/files/media/file/2025/06/aha-comments-on-cms-team-payment-model-in-fy-2026-proposed-inpatient-payment-rule-letter-6-10-2025.pdf" target="_blank">Transforming Episode Accountability Model</a> proposals.</p> Tue, 10 Jun 2025 15:37:12 -0500 Long-Term Care PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) on April 11 issued a <a href="https://www.federalregister.gov/documents/2025/04/30/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the" target="_blank" title="April 11 proposed rule text">proposed rule</a> for the inpatient and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2026. This Regulatory Advisory reviews highlights of the LTCH provisions in the rule, while the inpatient PPS provisions are covered in a <a href="/advisory/2025-05-07-inpatient-pps-proposed-rule-fy-2026?check_logged_in=1" target="_blank" title="Inpatient PPS provisions advisory">separate advisory</a>. In addition, the AHA issued a <a href="/advisory/2025-05-07-fy-2026-transforming-episode-accountability-model-proposed-rule" target="_blank" title="AHA advisory on the CMS Innovation Transforming Episode Accountability Model">separate advisory</a> on the proposed Center for Medicare and Medicaid Innovation Transforming Episode Accountability Model alternative payment model, which was addressed in this rule.</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>KEY HIGHLIGHTS</strong></p><p>The rule proposes to:</p><ul><li>Increase net LTCH payments by 2.5% or $61 million in FY 2026, relative to FY 2025, including both standard rate payments and site-neutral payments.<ul><li>Standard rate LTCH PPS payments would increase by 2.2%, or $52 million.</li><li>Site-neutral LTCH PPS payments would increase by 4.7%, or $9 million.</li></ul></li><li>Increase the standard rate fixed-loss amount for high-cost outlier (HCO) cases from $77,048 to $91,247 for FY 2026.</li><li>Remove four patient assessment data elements from the LTCH quality reporting program (QRP) and modify the COVID-19 vaccine among patients and residents measure.</li><li>Solicit comments on approaches and opportunities to streamline regulations and reduce administrative burdens on hospitals and other providers.</li></ul></div></div><h2>AHA TAKE</h2><p>CMS’ proposed revisions to the LTCH PPS fall far short amid ongoing financial strain and other pressures facing providers. The proposed increase in the fixed‐loss threshold for HCO payments risks restricting care access for the sickest Medicare beneficiaries. In addition, LTCHs continue to be woefully underpaid for site-neutral cases. The AHA will continue to urge CMS to modernize its outlier payment policy to safeguard critical services for those with the most severe illnesses.</p><h2>WHAT YOU CAN DO</h2><ul><li><strong>Share this advisory</strong> with your senior management team to examine the impact these payment changes would have on your organization in FY 2026.</li><li><strong>Participate in an </strong><a href="https://aha-org.zoom.us/webinar/register/WN_QVOCu7XTTFygFK9Ey9aZAw#/registration" target="_blank" title="May 20th AHA Members-only webinar "><strong>AHA members-only webinar May 20</strong></a><strong> </strong>to hear a summary of this regulation, ask questions and provide your organization’s perspective on the proposed policies.</li><li><strong>Submit to CMS a comment letter</strong> on the proposed rule by June 10 explaining the rule’s impact on your patients, staff and facility, and local health care partners. Comments may be submitted at <a href="http://www.regulations.gov" target="_blank" title="Information to submit the CMS comment letter">www.regulations.gov</a>. The final rule will take effect Oct. 1, 2025.</li></ul><h2>PROPOSED LTCH PPS PAYMENT CHANGES</h2><p>Overall, CMS estimates that aggregate net spending on LTCH services would increase by 2.5% or $61 million in FY 2026 compared to FY 2025. This update includes an increase to standard rate payments of 2.2%, or $52 million, and an increase to site-neutral payments of 4.7%, or $9 million. As discussed below, the lower increase to standard rate payments is attributable to a proposed increase in the fixed-loss amount for high-cost outlier cases.</p><h3>Standard LTCH PPS Payment Updates</h3><p>Cases are eligible for payment at the standard LTCH PPS rate if they meet the site-neutral payment policy exclusion criteria. In order to meet these exclusion criteria, a discharge must not have a principal diagnosis related to a psychiatric diagnosis or rehabilitation, must be immediately preceded by a discharge from an acute care hospital, and must have included at least three days in the ICU <em>or</em> be assigned to a Medicare-Severity-LTC-Diagnosis-Related Group (MS-LTC-DRG) that is based on the patient receiving at least 96 hours of ventilator services in the LTCH.</p><p>CMS found that 90% of all LTCH discharges met the criteria for a standard rate payment in FY 2024, and it presumes the same percentage would be eligible in FY 2026. This figure has risen in recent years, with CMS finding 68% of cases being eligible for standard rates in FY 2022, and 88% in FY 2023.</p><p><strong>Market Basket Update.</strong> CMS proposes updating the market basket using the same forecasting it has used in prior years. This year, it proposes a 3.4% increase to the LTCH market basket, which would be reduced by a statutorily mandated 0.8% productivity adjustment, resulting in a proposed 2.6% net market basket update. Providers that fail to report quality data would be subject to a 2-percentage point reduction in the market basket update. As it always does, CMS will use updated forecast data for the market basket update in the final rule.</p><p><strong>MS-LTC-DRG Relative Weights Updates. </strong>CMS proposes using the most recently available claims and cost data to recalibrate the weighting assigned to each MS-LTC-DRG for FY 2026, as it normally would. More specifically, it would use the most recently available claims and cost data for cases that meet the site-neutral exclusion criteria and not exclude any COVID-19 cases or timeframes from its methodology. CMS retains its previously finalized methodology to apply a 10% cap on any decreases in a DRG weight and would continue to remove any cases with a length of stay of less than seven days from its calculations. The proposed updated DRG weights are available at the CMS proposed rule <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/long-term-care-hospital/regulations-notices/cms-1833-p">webpage</a>.</p><p><strong>HCO Threshold. </strong>CMS is required to update outlier thresholds yearly so that estimated outlier payments make up 7.975% of aggregate payments to LTCHs. More specifically, CMS must set a fixed-loss amount (FLA) that would trigger eligibility for outlier payments that results in it hitting its target percentage for total outlier payments. CMS says that its most recent data indicate that outlier payments will equal approximately 8.2% of total payments in FY 2025.</p><p>As part of its methodology, CMS calculates a charge inflation factor (CIF) to estimate the rate at which charges would continue to increase. It found that charges increased 12.6% from FY 2023 to FY 2024, the most recent data available. Therefore, it uses a CIF of 1.126 to calculate a two-year CIF of 1.267 (1.126 squared) to estimate charges for FY 2026.</p><p>To target its statutory threshold, CMS proposes an updated FLA of $91,247. CMS acknowledges the continued drastic increase in the FLA in past years and is requesting comment on its approach. The AHA has conducted extensive analysis on this issue in recent years and is doing so again. </p><p><strong>Labor-related Share</strong>. The labor-related share is the portion of LTCH payments that is adjusted by a hospital’s wage index in determining a final payment amount. This year, CMS proposes increasing the labor-related share from 72.8% to 73.1%. This follows a significant increase from 68.5% in FY 2024 and is the result of using the most recently available market basket data.</p><p><strong>Wage Index Changes</strong>. CMS uses wage indexes to adjust LTCH payments regionally to account for variation in labor cost. In doing so, CMS utilizes core-based statistical areas (CBSAs) established by the Office of Management and Budget (OMB). Each county or county-equivalent is assigned to a CBSA and each CBSA is assigned a wage index. CBSAs are also designated as either urban or rural. In July 2023, OMB issued <a href="https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf">a bulletin</a> that updated these CBSAs, and CMS proposes continuing to utilize them. CMS implements wage index updates in a budget neutral manner and this year is proposing a budget neutrality factor of 1.0012146 (0.12%).</p><p><strong>Proposed Standard Payment Rate. </strong>The standard payment rate is the amount by which DRG weights and other payment adjustments are multiplied to determine a final payment amount for a discharge. After applying the market basket update and wage index budget neutrality factor, CMS proposes to increase the standard payment rate from $49,383.26 to $50,728.77.</p><h3>Site-neutral LTCH PPS Payment Updates</h3><p>Claims that do not meet the site-neutral exclusion criteria referenced above are paid at the site-neutral rate, which is the lower of the inpatient PPS-comparable per-diem amount, including any outlier payments, or 100% of the estimated cost of the case.</p><p>For this category of cases, CMS estimates payments would increase by 4.7%, or $9 million, in FY 2026 compared to FY 2025. This update largely reflects CMS’ proposed updates under the inpatient PPS. However, the agency does not provide a detailed breakdown of these increases. In addition, the proposed HCO threshold for site-neutral cases would continue to mirror the proposed inpatient PPS threshold of a $44,305.</p><h2>LTCH QUALITY REPORTING PROGRAM</h2><p>As mandated by the Affordable Care Act, LTCHs receiving Medicare payments have been required to participate in the LTCH QRP since 2014. The Improving Medicare Post-Acute Care Transformation (IMPACT) Act requires that, starting FY 2019, providers must report standardized patient assessment data elements (SPADEs) as part of the LTCH QRP. Failure to comply with these requirements results in a 2-percentage point reduction to the LTCH’s annual market-basket update.</p><p>The FY 2026 LTCH QRP comprises 17 measures based on updates to the QRP in previous rulemaking. In this rule, CMS proposed to modify one LTCH QRP measure and remove four SPADEs effective with the FY 2026 program year.</p><p><strong>Table 1: Finalized Measures for the LTCH QRP, FY 2024-FY 2026</strong></p><div align="center"><table border="1" cellspacing="0" cellpadding="0" width="684"><thead><tr><th width="120"><p class="text-align-center"><strong>Data Source</strong></p></th><th width="402"><p class="text-align-center"><strong>Measure</strong></p></th><th width="54"><p class="text-align-center"><strong>FY 24</strong></p></th><th width="54"><p class="text-align-center"><strong>FY 25</strong></p></th><th width="54"><p class="text-align-center"><strong>FY 26</strong></p></th></tr></thead><tbody><tr><td rowspan="5" width="120">National Healthcare Safety Network (NHSN)</td><td width="402">Catheter-associated Urinary Tract Infection</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Central Line-associated Blood Stream Infection</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402"><em>Clostridium difficile Infection</em></td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Influenza Vaccination Coverage Among Health Care Personnel</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">COVID-19 Vaccination Coverage Among Health Care Personnel</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td rowspan="12" width="120">LTCH CARE Data Set (LCDS)</td><td width="402">Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay)</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Application of Percent of Long-term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function</td><td width="54">X</td><td width="54"><p class="text-align-center"> </p></td><td width="54"><p class="text-align-center"> </p></td></tr><tr><td width="402">LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan</td><td width="54">X</td><td width="54"><p class="text-align-center"> </p></td><td width="54"><p class="text-align-center"> </p></td></tr><tr><td width="402">Change in Mobility Among LTCH Patients Requiring Ventilator Support</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Ventilator Liberation Rate</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Compliance with Spontaneous Breathing Trial by Day 2 of LTCH Stay</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Drug Regimen Review Conducted with Follow-up for Identified Issues</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Changes in Skin Integrity Post-acute Care: Pressure Ulcer/Injury</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Transfer of Health Information to Provider</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Transfer of Health Information to Patient</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Discharge Function Score</td><td width="54"> </td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Percent of Patients/Residents Who Are Up to Date with COVID-19 Vaccination</td><td width="54"> </td><td width="54"> </td><td width="54">X</td></tr><tr><td rowspan="3" width="120">Claims</td><td width="402">Medicare Spending per Beneficiary</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Discharge to Community</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr><tr><td width="402">Potentially Preventable 30-day Post-discharge Readmission</td><td width="54">X</td><td width="54">X</td><td width="54">X</td></tr></tbody></table></div><p><small class="sm">X= Measure required for reporting as previously finalized</small></p><p><strong>Proposed Removal of Four Social Determinants of Health (SDOH) SPADEs. </strong>Beginning with the FY 2028 LTCH QRP, CMS proposes removing four SPADEs under the SDOH category. This category was finalized in the FY/CY 2020 final rules for the inpatient rehabilitation facility, skilled nursing facility, LTCH and home health QRPs and currently comprises SPADEs addressing the following topics:</p><ul><li>Race.</li><li>Ethnicity.</li><li>Preferred Language.</li><li>Interpreter Services.</li><li>Health Literacy.</li><li>Social Isolation.</li><li>Transportation.</li></ul><p>With a stated purpose of reducing administrative burden to LTCHs, CMS would remove four SPADEs it adopted in the FY 2025 IRF PPS final rule that are focused on:</p><ul><li>Living situation.</li><li>Food security.</li><li>Utilities.</li></ul><p>CMS indicates that the items would become optional for reporting beginning Oct. 1, 2025, and be phased out of the LTCH QRP altogether by FY 2028.</p><p><strong>Modification of Percent of Patients/Residents Up to Date with COVID-19 Vaccination. </strong>CMS proposes to modify this measure by excluding patients who expire during their LTCH stay. The change is being proposed in response to stakeholder feedback noting that collecting accurate information on vaccination from this patient population is often impossible.</p><p><strong>Reconsideration Process. </strong>Most CMS quality reporting and value programs — including the LTCH QRP — include a reconsideration process permitting providers to appeal a CMS initial determination of noncompliance with reporting or other programmatic requirements. In the rule, CMS proposes allowing LTCHs to request an extension to file a request for reconsideration in the event the organization experiences an extraordinary circumstance (e.g., natural disaster) that overlaps with the deadline for filing a reconsideration request.</p><p>CMS also proposes clarifying the basis on which the agency can grant a reconsideration request and reverse an initial determination of noncompliance. Specifically, CMS would reverse a finding of noncompliance only if it determines that the LTCH was in full compliance with the LTCH QRP requirements for the applicable program year. When relevant, this includes complying with CMS’ established policies for requesting and receiving an extraordinary circumstance exception from reporting.</p><p><strong>Request for Information.</strong> The proposed rule includes requests for information on three key areas. First, CMS asks for input on new measure concepts focused on interoperability, well-being, nutrition and delirium. Second, CMS seeks input on how to advance the uptake of digital quality measures in the LTCH QRP. CMS is particularly interested in the extent to which LTCHs are using application programming interfaces based on the Fast Healthcare Interoperability Resource standard to support any data reporting or exchange functions. Third, CMS seeks input on decreasing the amount of time that LTCHs have to submit quarterly quality measure and SPADE data to CMS. Currently, LTCHs have four and a half months after a quarter closes to submit data to CMS. CMS seeks input on potentially requiring that quality and SPADE data be submitted 45 days after the close of a quarter. The agency believes this would result in more timely publicly-reported data on LTCH performance.</p><h2>REQUEST FOR INFORMATION: EXECUTIVE ORDER 14192 “UNLEASHING PROSPERITY THROUGH DEREGULATION”</h2><p>On Jan. 31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. Accordingly, CMS is soliciting public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. CMS is collecting responses at <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.cms.gov%2Fmedicare-regulatory-relief-rfi&data=05%7C02%7Cjgold%40aha.org%7C4cd60274604142c4278308dd7b7460c2%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C638802461951091442%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=oVpGbZYA%2Bop4qTxZ4eXdtgj417%2BP2swWi8qUj%2FsAsYw%3D&reserved=0" target="_blank" title="CMS website to submit responses">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders submit comments through the provided web link by June 10.</p><h2>FURTHER QUESTIONS</h2><p>Please contact Jonathan Gold, the AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org" target="_blank" title="Johnathan Gold email">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, the AHA’s vice president of quality and safety policy, at <a href="mailto:ademehin@aha.org" target="_blank" title="Akin Demehin email">ademehin@aha.org</a>, regarding any quality-related questions.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/05/long-term-care-hospital-prospective-payment-system-proposed-rule-for-fy-2026-advisory-5-15-2025-f.pdf"><img src="/sites/default/files/2025-05/cover-long-term-care-hospital-prospective-payment-system-proposed-rule-for-fy-2026-advisory-5-15-2025.png" data-entity-uuid data-entity-type="file" alt="Advisory Cover Image" width="NaN" height="NaN"></a></div></div></div> Thu, 15 May 2025 14:27:38 -0500 Long-Term Care PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/documents/2025/04/30/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the" target="_blank" title="IPPS and LTCH PPS Proposed rule for fiscal year 2026.">proposed rule</a> for fiscal year (FY) 2026. Comments on the proposed rule are due to CMS by June 10. The final rule will be published on or around Aug. 1 and take effect Oct. 1.</p><p>The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. A summary of the proposals related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals follows. The AHA will issue a separate advisory on the LTCH PPS-related proposals. Additionally, the AHA issued a <a href="/advisory/2025-05-07-fy-2026-transforming-episode-accountability-model-proposed-rule" target="_blank" title="TEAM Advisory">separate advisory</a> on the proposed Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model.</p><p>The rule proposes a net 2.4% increase for inpatient PPS payments in FY 2026. This update reflects a hospital market basket increase of 3.2% and a productivity cut of 0.8 percentage points. It would increase hospital payments by $4 billion total in FY 2026 as compared to FY 2025. This includes a proposed $1.5 billion increase in disproportionate share hospital (DSH) payments and a proposed $234 million increase in new technology add-on payments.</p><p>In addition, CMS has included in the rule its previously published <a href="https://www.cms.gov/medicare-regulatory-relief-rfi" target="_blank" title="Request for Information web site">request for information</a> seeking input on opportunities to streamline regulations and reduce burdens on providers. </p><div class="panel module-typeC"><div class="panel-heading"><p><strong>KEY HIGHLIGHTS</strong></p><p>CMS’ proposed policies would:</p><ul><li>Increase inpatient PPS payment rates by a net 2.4% in FY 2026.</li><li>Discontinue the low-wage index hospital policy for FY 2026 and beyond.</li><li>Add seven new <a>MS-DRGs </a>and delete six MS-DRGs.</li><li>Remove four measures from the inpatient quality reporting program focused on health equity and COVID-19 vaccination for health care personnel.</li><li>Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs.</li><li>Shorten the Hospital Readmission Reduction Program’s performance period from three to two years.</li></ul></div></div><h2><a><span>AHA TAKE</span></a></h2><p>The AHA welcomes CMS’ interest in regulatory relief, including its focus on streamlining quality measurement efforts. However, we are disappointed by CMS’ proposed inpatient hospital payment update of 2.4%, including an extremely high proposed productivity cut of 0.8 percentage points. We are very concerned that this update would hurt hospitals’ ability to care for their communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high quality, around-the-clock, essential care for their patients and communities. See the AHA’s full statement on the rule <a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule" target="_blank" title="AHA Statement on the Final Rule">here</a>.</p><h2>WHAT YOU CAN DO</h2><ul><li><strong>Listen to an AHA member-only webinar held April 28 </strong>to hear a summary of this regulation. Access the recording for this 60-minute webinar <a href="/2025-04-30-fy-2026-inpatient-prospective-payment-system-proposed-rule-member-webinar" target="_blank" title="AHA Member Only Webinar">here</a>.</li><li><strong>Share this advisory with your senior management team</strong> and ask your chief financial officer to examine the impact of the proposed payment changes on your Medicare revenue for FY 2026.</li><li><strong>Verify the CMS </strong><a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-proposed-rule-home-page" target="_blank" title="CMS table listing the factor used to calculate uncompensated care payments for DSH"><strong>table</strong></a><strong> listing the factor used to calculate uncompensated care payments for DSH. </strong>Hospitals have until June 10 to review this table and notify CMS in writing of any inaccuracies.</li><li><strong>Verify that you have attested to meaningful use. </strong>Attestation status can be determined through the CMS <a href="http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/RegistrationandAttestation.html" target="_blank" title="CMS website for Attestaation">website</a>.</li><li><strong>Share this advisory with your billing, medical records, quality improvement and compliance departments, as well as your clinical leadership team</strong> — including the quality improvement committee and infection control officer — to apprise them of the proposals around the DRGs and quality measurement requirements.</li><li><strong>Submit comments to CMS with your specific concerns by June 10 at </strong><a href="http://www.regulations.gov" target="_blank" title="CMS website to submit comment"><strong>www.regulations.gov</strong></a><strong>. </strong>The final rule will be published on or around Aug. 1 and take effect Oct. 1.</li></ul><p><strong>View the detailed Regulatory Advisory Below.</strong></p></div><div class="col-md-4"><a href="/system/files/media/file/2025/05/inpatient-pps-proposed-rule-for-fy-2026-advisory-5-7-2025.pdf"><img src="/sites/default/files/2025-05/cover-inpatient-pps-proposed-rule-for-fy-2026-advisory-5-7-2025.png" data-entity-uuid data-entity-type="file" width="NaN" height="NaN"></a></div></div></div> Wed, 07 May 2025 11:13:33 -0500 Long-Term Care PPS /news/headline/2025-04-11-cms-releases-fy-2026-proposed-rule-long-term-care-hospitals <p>The Centers for Medicare & Medicaid Services April 11 proposed increasing the <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">long-term care hospital</a> standard rate payments by 2.2% in fiscal year 2026 relative to FY 2025. This includes a 3.4% market basket update reduced by a 0.8 percentage point productivity adjustment. In addition, it includes a reduction of 0.3 percentage points due to CMS’ proposal to raise the fixed-loss amount for high-cost outlier payments to $91,247. The agency also has included in the rule its previously published request for information seeking input on opportunities to streamline regulations and reduce burdens on providers.<br><br>The AHA remains very concerned about the further proposed increase to the outlier threshold and the small proposed payment increase. In a statement shared with the media today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is concerned that the proposed payment updates for long-term care hospitals (LTCHs) would lead to continued strain on these providers as they care for some of Medicare’s sickest patients. In recent years, the outlier threshold has skyrocketed, forcing LTCHs to absorb tens of thousands of additional dollars in losses before Medicare will help cover some costs of extremely ill beneficiaries. CMS’ proposal this year to increase this threshold even more — by an additional $14,199 — coupled with its minimal proposed market basket update, would make it increasingly difficult for LTCHs to care for these patients and alleviate pressure on their acute-care hospital partners. The AHA looks forward to working with CMS to ensure continued access for these patients.”<br><br>For the LTCH Quality Reporting Program, CMS proposes to remove four patient assessment data elements and modify the COVID-19 vaccine among patients and residents measure. CMS also asks for input on future LTCH QRP measure concepts, changing deadlines for reporting patient assessment data and advancing digital quality measures in the LTCH QRP.<br><br>CMS will accept comments on the proposed rule through June 10. AHA members will receive a Regulatory Advisory with additional information.</p> Fri, 11 Apr 2025 18:15:57 -0500 Long-Term Care PPS /testimony/2025-03-11-aha-statement-house-ways-and-means-subcommittee-health-hearing-march-11-2025 <div class="container"><div class="row"><div class="col-md-8"><h2>Statement<br>of the<br>���������� Association<br>for the<br>Committee on Ways and Means<br>Subcommittee on Health<br>of the<br>U.S. House of Representatives<br>“After the Hospital: Ensuring Access to Quality Post-Acute Care”<br>March 11, 2025</h2><p>On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and our 2,425 post-acute care members, the ���������� Association (AHA) appreciates the opportunity to submit this statement for the record to the Ways and Means Subcommittee on Health on the value of post-acute care and how Congress can better support patients’ access to these critical services.</p><h2>General Policy & Regulatory Challenges</h2><p>Post-acute care is provided to patients who have been discharged from an acute-care hospital but still require services such as close medical supervision, nursing care, therapies and other support. Long-term care hospitals (LTCHs) act as a pressure relief valve for high-acuity patients needing extended hospital stays, thereby easing the burden on intensive care units (ICUs). Inpatient rehabilitation facilities (IRFs) assist patients recovering from life-changing illnesses like brain injuries, spinal cord injuries and amputations. Skilled nursing facilities (SNFs) offer rehabilitation therapy services aimed at strengthening patients and making them more independent before they return home. Home health agencies (HHs) enable seniors to remain independent by providing medical or non-medical care in their homes. Each of these facilities plays a crucial role across the continuum of care.</p><p>While each specific post-acute sector faces unique challenges, there are several policy and regulatory issues that are universal.</p><h3>Medicare Advantage</h3><p>Medicare Advantage (MA) plans are an increasingly popular choice for older Americans, and measures must be taken to ensure that patients who require post-acute care services are able to access them in a timely manner. Perhaps the biggest challenge facing post-acute care providers and their patients is the ongoing restrictions that MA plans place on access to care. The issue has been well documented by providers as well as by Department of Health and Human Services Office of Inspector General and congressional investigations.<a href="#fn1"><sup>1</sup></a><sup>,</sup><a href="#fn2"><sup>2</sup></a> The prior authorization process used by MA plans places significant administrative burden on both acute-care hospitals and post-acute care providers. Perhaps more importantly, it is directly harmful to Medicare beneficiaries — at best delaying their care and at worst outright denying medically necessary treatment.</p><p>MA plans’ practices have directly contributed to the growing discharge delay problems plaguing acute-care hospitals. While all beneficiaries have faced these delays, the increase in length of stay for MA beneficiaries seeking post-acute care has increased twice as much compared to Traditional Medicare beneficiaries. Specifically, the average length of stay (ALOS) prior to discharge to post-acute care settings has grown by 11.3% for MA patients between 2019 and 2024. However, for patients in Traditional Medicare, the ALOS has grown by only 5.2%, according to industry benchmark data from Strata Decision Technology, LLC.</p><p>Despite steps taken by the Centers for Medicare & Medicaid Services (CMS) in recent years, providers have seen little to no meaningful change in MA plan behavior and no increased access for beneficiaries. Additionally, post-acute care providers still face challenges with MA plans listing them within their networks. CMS should conduct regular audits to ensure that MA plans include robust post-acute care options with sufficient bed spaces and resources to provide the in-network care that patients need. As MA enrollment continues to grow, it is imperative that Congress continue to rein in these harmful practices to ensure that beneficiaries are not denied the care to which they are entitled.</p><h3>Ongoing Workforce Challenges</h3><p>The U.S. health care system is facing unprecedented workforce shortages, with the Bureau of Labor Statics estimating there will be 193,100 openings for nurses in each of the next 10 years.<a href="#fn3"><sup>3</sup></a> For physicians, there could be a shortage of between 37,800 and 124,000 physicians by 2034 for both primary and specialty care.<a href="#fn4"><sup>4</sup></a> Since mid-2020, post-acute care providers have seen a significant number of patient care technicians, registered nurses, and respiratory therapists, among other vital professionals, shifting employment to other organizations. Some post-acute care providers in rural areas have experienced significant challenges in filling open positions, sometimes going months without receiving an application for open registered nurses, licensed practical nurses, certified nursing assistants or key leadership roles. Staffing challenges jeopardize the ability of seniors to access the care they need and deserve.</p><p>To ensure residents and families have access to high-quality care close to home, meaningful, long-term solutions and investments in workforce development must replace stop-gap measures, reimbursement cuts and punitive regulations. The AHA encourages Congress to pass the Conrad State 30 and Physician Access Reauthorization Act (S.709/H.R.1585) and the Healthcare Workforce Resilience Act, as well as support visa recapture initiatives and continue support for the Health Resources and Services Administration’s (HRSA) health professions and nursing workforce development programs.</p><h2>Sector Specific Comments</h2><h3>Long-Term Care Hospitals</h3><p>LTCHs play a unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. LTCHs offer an intensive, hospital-level of care that may not be available in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in LTCHs on average for at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care and extended stays. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened ICUs and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.</p><p>In 2016, Congress put in place a dual-rate payment system under the LTCH prospective payment system (PPS) for Traditional Medicare beneficiaries.<a href="#fn5"><sup>5</sup></a> This fundamental change in the payment system and other coinciding market factors dramatically reshaped the landscape of both LTCHs and the beneficiaries they serve. Since implementation of the dual-rate payment system, the volume of standard LTCH cases has fallen by approximately 70% from its peak under the legacy payment system and the number of LTCH providers also has decreased by 20%. At the same time, the average acuity of LTCH patients has risen by 20% or more in that same period, and these patients are increasingly consolidated into a limited number of Diagnosis-Related Groups (DRGs).<a href="#fn6"><sup>6</sup></a> In addition, approximately one-third of all Medicare LTCH discharges nationally are paid the inpatient PPS-equivalent rate. However, these reimbursements fall well short of the cost of care. AHA’s analysis shows that as of fiscal year 2020 reimbursement for these cases totaled only 46% of the cost of care.<a href="#fn7"><sup>7</sup></a> Finally, the growth of MA has further shrunk the patient population for LTCHs as MA plans routinely inappropriately deny access to LTCHs.</p><p>The smaller, sicker patient population and dwindling reimbursement has created many challenges for LTCHs, as evidenced by the closure of so many of these facilities. The remaining patient pool is notably more acute and costly to treat, resulting in cases increasingly qualifying for high-cost outlier (HCO) payments to compensate for lack of precision in the DRGs as so many cases are consolidated into a limited number of DRGs. In 2016, the fixed-loss amount (FLA) for HCO cases, which is the amount of financial loss an LTCH must incur before qualifying for an HCO payment, was $16,423. Since that time, the FLA has risen by more than 300% to $77,048. This unsustainable figure puts LTCHs in the untenable position of having to lose tens of thousands of dollars in order to care for some of the sickest patients. Unfortunately, CMS has been unable to deviate from its current methodology to provide relief from this policy due to a congressional mandate to cap total outlier payments at 8% of total payments.<a href="#fn8"><sup>8</sup></a></p><p>The AHA appreciates this Subcommittee’s awareness of the need to provide relief to the LTCH sector and supports efforts to provide additional flexibility and funding for HCO cases, and additional flexibility to provide care for different types of patients through the standard payment system.</p><h3>Inpatient Rehabilitation Facilities</h3><p>IRF patients are typically admitted directly from an acute-care hospital following a serious accident or illness such as stroke, brain injury, amputation or others that have resulted in serious functional deficits and medical complications. IRFs provide hospital-level care, which means they are closely supervised by a physician who also oversees patients’ overall rehabilitation. The intensive course of rehabilitation provided in IRFs must include a minimum of 15 hours per week of intensive therapy services involving multiple therapy disciplines, as well as around-the-clock specialized nursing care. This level of care is critical for debilitated patients who are stable enough to be discharged from the acute-care hospital to begin intensive rehabilitation but are at risk for medical complications without continued close medical management.</p><p>The AHA continues to hear from IRFs regarding their concerns with CMS’ IRF Review Choice Demonstration (RCD). CMS initially created the IRF RCD to “assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud.” However, the agency never provided credible evidence to support its belief that there may be high rates of fraud in the IRF field — it only cited its improper payment rate for IRFs, which, as it knows, is not the same as fraud. Since being operationalized by the Biden administration in 2023, CMS has not subsequently provided any evidence that the IRF RCD has revealed or assisted in uncovering any fraud. Specifically, the demonstration currently subjects 100% of IRF claims to review in both Alabama and Pennsylvania. Yet, according to CMS’ <a href="https://www.cms.gov/files/document/irf-rcd-stats-fy-2024.pdf" target="_blank" title="CMS: Review Choice Demonstration for Inpatient Rehabilitation Facility Services (IRF RCD) Quarterly Updates. Fiscal Year 2024 (Oct 2023 – Sept 2024).">most recent data</a> collected during fiscal year 2024, approximately 90% of all claims reviewed have been approved. Of those, more than 95% were approved on the initial submission. Despite this high affirmation rate and lack of evidence of any fraud, CMS says it still plans to continue its expansion of the demonstration to more than half of all states and territories, subjecting hundreds of thousands of IRF claims annually to the burdensome manual medical review process. It has become clear that this demonstration is burdensome, diverts valuable clinical resources, and is not achieving its stated objective of uncovering or preventing fraud in the Medicare program.</p><p>Therefore, the continued need for the IRF RCD remains highly dubious, and the AHA continues to encourage CMS and Congress to end this program.</p><h3>Skilled Nursing Facilities</h3><p>SNFs play another critical role for many hospitalized patients who need continued care after discharge. However, hospitals have faced increasing difficulty discharging patients to post-acute care settings, including SNFs. This challenge has largely been due to staffing shortages and the associated reduced capacity of SNFs and other providers. These shortfalls then place additional burden back on hospitals, including the need for hospitals to board patients until a discharge location can be found. Therefore, it is vital for the entire continuum of care, including for acute-care hospitals, that SNFs are properly resourced.</p><p>The AHA and its members are committed to safe staffing to ensure high-quality, patient-centered care in all health care settings, including long-term care (LTC) facilities. Yet, the process of safely staffing any health care facility is about much more than achieving an arbitrary number set by regulation. It requires clinical judgment and flexibility to account for patient needs, facility characteristics, and the expertise and experience of the care team. The Biden administration’s one-size-fits-all minimum staffing rule for LTC facilities creates more problems than it solves and could jeopardize access to all types of care across the continuum, especially in rural and underserved communities that may not have the workforce levels to support these requirements.</p><p>The AHA supports the Protecting America’s Seniors Access to Care Act (H.R. 1683) to prohibit the Department of Health and Human Services from implementing the provisions of the minimum staffing rule. We have recommended to CMS specific alternative strategies that take more patient- and workforce-centered approaches to ensuring LTC facilities have a strong foundation of policies and processes to continually assess, reassess and adjust their staffing levels. These strategies constitute starting points for further standards development, which we would encourage CMS to engage in with the assistance of patients and the entire health care continuum. Not only would these proposed alternatives support more timely and effective action by LTC facilities to address staffing challenges, but they also would be more consistent with modern clinical practice. Thus, repealing the Biden-era mandate would both protect patient access to care and allow for the development of more effective and clinically appropriate strategies to improve LTC patient outcomes.</p><h3>Home Health Agencies</h3><p>Approximately one in five hospitalized Medicare beneficiaries are discharged to HH.<a href="#fn9"><sup>9</sup></a> These services alleviate pressure on hospitals, other post-acute care sites and caregivers, who would otherwise be responsible for these patients. HH agencies also can prevent rehospitalization by safely providing needed interventions at home thus avoiding potential complications and accidents.</p><p>Over the last few years, the AHA has seen a strain on HH operations — along with other post-acute care providers — due to financial challenges, creating ripple effects throughout the continuum of care. Hospitals have seen the length of stay for patients being discharged to HH increase as they face increasing difficulty finding placements for these patients.<a href="#fn10"><sup>10</sup></a> This has been due in large part to the reductions in reimbursement to HH providers put in place by CMS since its implementation of the new Medicare fee-for-service payment system in 2020. CMS determined it must permanently cut HH payments from between 4% to 8% annually in order to meet statutory budget neutrality requirements. In addition, CMS has indicated that it intends to recoup billions more in temporary reductions in the coming years. These payment reductions, paired with staffing shortages, and other administrative burdens and costs will continue to have serious implications for access to services for Medicare beneficiaries. The AHA is thankful for the Committee’s ongoing support of home health agencies.</p><h2>Conclusion</h2><p>Thank you for your leadership on these important issues and for the opportunity to provide comments. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.</p><hr><ol><li id="fn1">HHS, Office of Inspector General (OIG); Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (April 2022) (<a href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" target="_blank">https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a>).</li><li id="fn2"><a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a>.</li><li id="fn3">3<a href="https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6" target="_blank">https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6</a>.</li><li id="fn4">4<a href="https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage" target="_blank">https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage</a>.</li><li id="fn5">Bipartisan Budget Act Of 2013 (P.L. 113–67).</li><li id="fn6"><a href="/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries" target="_blank">/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries</a>.</li><li id="fn7"><a href="/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf" target="_blank">/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf</a>.</li><li id="fn8">Section 15009(b) of the 21ST Century Cures Act added section 1886(m)(7) to the Act.</li><li id="fn9">MedPAC; July 2024 Data Book; Section 8, Pg. 107 (<a href="https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf</a>).</li><li id="fn10"><a href="/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule" target="_blank">/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule</a>.</li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf" target="_blank" title="Click here to download the AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 PDF.">Download the Testimony PDF</a></div><a href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf"><img src="/sites/default/files/inline-images/Page-1-AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.png" data-entity-uuid="ef5df51a-efdf-417b-bd24-197ee16b5607" data-entity-type="file" alt="AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 page 1." width="695" height="900"></a></div></div></div> Tue, 11 Mar 2025 12:52:15 -0500 Long-Term Care PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Aug. 1 <a href="https://www.federalregister.gov/public-inspection/2024-17021/medicare-medicaid-and-childrens-health-insurance-programs-hospital-inpatient-prospective-payment">issued</a> a final rule for the inpatient and long-term care hospital (LTCH) prospective payment systems (PPSs) for fiscal year (FY) 2025. This Regulatory Advisory reviews highlights of the LTCH provisions in the rule, while the inpatient PPS provisions are covered in a separate <a href="/system/files/media/file/2024/08/inpatient-pps-final-rule-for-fy-2025-advisory-8-14-2024.pdf">advisory</a>. In addition, the AHA will issue a separate advisory on the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model, also included in this rule.</p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>The rule will: </p><ul><li>Increase net LTCH payments by 2.2%, or $58 million, in FY 2025, relative to FY 2024, including standard rate and site-neutral payments. This includes:<ul><li>Increasing standard LTCH PPS payments by 2.0%, or $45 million, in FY 2025 relative to FY 2024.</li><li>Increasing site-neutral LTCH PPS payments by 4.2%, or $13 million, in FY 2025 relative to FY 2024.</li></ul></li><li>Increase the standard rate fixed-loss amount for high-cost outlier (HCO) cases from $59,873 in FY 2024 to $77,048 in FY 2025.</li><li>Require LTCHs to report four new patient assessment items in the LTCH Continuity Assessment Record and Evaluation (CARE) Data Set (LCDS) under the social determinants of health (SDOH) category beginning with FY 2028.</li></ul></div></div><h2>AHA TAKE</h2><p>The payment update for LTCHs is inadequate and threatens access to care for extremely ill Medicare beneficiaries. In addition to this insufficient market basket update, the nearly 30% increase in the outlier fixed-loss amount puts LTCHs in an untenable position by forcing them to absorb hundreds of thousands of dollars in additional losses when caring for the sickest patients. Further, without adequate funding, the additional burden will be put back on acute-care hospitals and other providers that do not specialize in caring for this unique patient population. AHA will continue to work with CMS to address these issues. <strong>See AHA’s full </strong><a href="/press-releases/2024-08-01-aha-statement-fy-2025-final-ipps-ltch-payment-rule"><strong>statement</strong></a><strong> that was shared with the media.</strong></p><p>View the detailed Regulatory Advisory below.</p></div><div class="col-md-4"><a href="/advisory/2024-08-27-long-term-care-hospital-prospective-payment-system-final-rule-fy-2025"><img src="/sites/default/files/inline-images/cover-long-term-care-hospital-prospective-payment-system-final-rule-for-fy-2025-advisory-8-27-2024.png" data-entity-uuid="50b0dfd9-8095-46af-89ad-79e573e61f94" data-entity-type="file" alt="Cover Long-Term Care Regulatory Advisory August 27, 2024" width="644" height="832"></a></div></div></div> Tue, 27 Aug 2024 10:32:30 -0500 Long-Term Care PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) on August 1 issued a <a href="https://public-inspection.federalregister.gov/2024-17021.pdf" target="_blank">final rule</a> for the inpatient and long-term care hospital (LTCH) prospective payment systems (PPS) for fiscal year (FY) 2025. This Special Bulletin reviews highlights of the LTCH provisions in the rule. The inpatient PPS and Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) provisions are covered in a separate Special Bulletin.</p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>The rule will:</p><ul><li>Increase net LTCH payments by 2.2%, or $58 million, in FY 2025, relative to FY 2024, including both standard rate payments and site-neutral payments. This includes:<ul><li>Increasing standard LTCH PPS payments by 2.0%, or $45 million in FY 2025 relative to FY 2024.</li><li>Increasing site-neutral LTCH PPS payments by 4.2%, or $13 million, in FY 2025 relative to FY 2024.</li></ul></li><li>Increase the standard rate fixed-loss amount for high-cost outlier (HCO) cases from $59,873 in FY 2024 to $77,048 in FY 2025.</li><li>Adopt and modify certain patient assessment items related to health-related social needs and extend the window in which patient assessments must be done from three to four days after admission.</li></ul></div></div><h2>AHA TAKE </h2><p>The payment update for LTCHs is inadequate and threatens access for extremely ill Medicare beneficiaries. In addition to this insufficient market basket update, the nearly 30% increase in the fixed-loss amount puts LTCHs in an untenable position by forcing them to absorb hundreds of thousands of dollars in additional losses when caring for the sickest patients. Without adequate funding, additional burden will be placed on acute-care hospitals and other providers that do not specialize in caring for this unique patient population. The AHA will continue to work with CMS to address these issues. <strong>See AHA’s full </strong><a href="/press-releases/2024-08-01-aha-statement-fy-2025-final-ipps-ltch-payment-rule" target="_blank"><strong>statement</strong></a><strong> that was shared with the media</strong>.</p><p>Highlights from the rule follow.</p><h2>LTCH PPS PAYMENT CHANGES</h2><p><strong>Overall FY 2025 Payment Update.</strong> When considering all LTCH provisions in the rule, including updates to both standard rate and site-neutral payments, CMS estimates that aggregate spending on LTCH services will increase by 2.2% or $58 million, in FY 2025 compared to FY 2024. For purposes of its estimates, CMS assumes that standard-rate cases will account for 88% of LTCH spending, with site-neutral cases accounting for the remaining 12%.</p><p><strong>Update for Standard LTCH PPS Rate Cases</strong>. CMS will update standard rate payments by 2%, or $45 million, in FY 2025 relative to FY 2024. This update includes a 3.5% market-basket update that will be offset by a statutorily mandated cut of 0.5 percentage points for productivity. In addition, as discussed further below, CMS will decrease HCO payments as a percentage of total LTCH PPS standard federal rate payments by 0.8%. The final FY 2025 standard rate is $49,383.26, an increase from the current $48,116.62. LTCHs that fail to submit quality data as required will have this figure reduced by 2%.</p><p><strong>Standard Rate HCO Threshold</strong>. CMS updates the fixed-loss amount annually to attempt to meet the statutorily required 7.975% HCO pool. CMS proposed to increase the fixed-loss amount for standard-rate HCO cases from $59,873 in FY 2024 to $90,921 in FY 2025. However, in the final rule, CMS finalized a fixed-loss amount of $77,048. It reached this figure by using more recently available claims and cost data. It also said it considered alternatives, such as a multi-year phase-in of the fixed-loss amount increase, but determined it was not necessary given the lower than proposed amount resulting from use of updated data.</p><p><strong>Update for Site-neutral Rate Cases</strong>. CMS will update payments for site-neutral cases by 4.2% (or $13 million) in FY 2025 as compared to FY 2024. Site-neutral cases are paid the lower of the inpatient PPS-comparable per-diem amount, including any outlier payments, or 100% of the estimated cost of the case. Therefore, this update largely reflects CMS’ updates under the inpatient PPS. For FY 2025, the final HCO threshold for site-neutral cases will continue to mirror that of the inpatient PPS threshold, which was finalized as $46,152.</p><p>AHA analyses have found that site-neutral cases are underpaid by CMS, both under the prior blended rate and the current full site-neutral rate. This finding contrasts with CMS’ ongoing position that the cases paid at the site-neutral payment rate will likely mirror the costs and resource use for inpatient PPS cases assigned to the same MS-DRG.</p><p><strong>Rebasing of LTCH PPS Market Basket</strong>. As it does approximately every four years, CMS rebased the LTCH PPS market basket. CMS rebases the market basket to help ensure that it accurately reflects the mix of goods and services provided by LTCHs. The last rebasing was in FY 2021 utilizing FY 2016 and 2017 data. For this update, the agency utilized cost report data from FY 2022. CMS used almost entirely the same methodology as it used previously. However, one significant finalized change is the weighting of the contract labor cost category, which will increase from 4.4% to 12.6% of the market basket. Most of the weight is being redistributed from the “all other” category, which will decrease from 28.3% to 20.8%. The table below, reproduced from the final rule, shows the final major cost category weights.</p><img data-entity-uuid="9fea367e-82fa-4b46-b249-552f31721e28" data-entity-type="file" src="/sites/default/files/inline-images/image_20.png" width="975" height="343" alt="Table, reproduced from the final rule, shows the final major cost category weights."><p>The rule also contains a prospective and retrospective analysis comparing the current and new market baskets. As shown in the table below, also reproduced from the final rule, the market baskets produce, on average, similar outcomes. However, there are some small differences from year to year.</p><img data-entity-uuid="7024ac41-4b5c-4d26-bf9c-6fa2dcb38e65" data-entity-type="file" src="/sites/default/files/inline-images/image_22.png" width="975" height="399" alt="Table, also reproduced from the final rule, the market baskets produce, on average, similar outcomes. However, there are some small differences from year to year."><h2>LTCH QUALITY REPORTING PROGRAM</h2><p>CMS did not to adopt, modify or remove any quality measures from the LTCH Quality Reporting Program (QRP) in this rule.</p><p>CMS will require LTCHs to report four new patient assessment items in the Long-Term Care Hospital (LTCH) Continuity Assessment Record and Evaluation (CARE) Data Set (LCDS) under the social determinants of health (SDOH) category beginning with the FY 2028 LTCH QRP. The items are currently collected in the Accountable Health Communities Health-related Social Needs Screening Tool, and include:</p><ul type="disc"><li>Living situation: addresses housing stability;</li><li>Food: addresses frequency of worry that food would run out;</li><li>Food: addresses food running out without ability to buy more; and</li><li>Utilities: addresses utilities being shut off in home.</li></ul><p>In addition, CMS will modify the patient assessment item on Transportation to simplify the response options and revise the look-back period.</p><p>Finally, CMS finalized its proposal to extend the window for admission assessments from three days to four beginning with patients admitted on Oct. 1, 2026.</p><h2>NEXT STEPS</h2><p>The AHA in the coming weeks will produced a Regulatory Advisory with a detailed summary. Please contact Jonathan Gold, AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Caitlin Gillooley, AHA’s director of policy, at <a href="mailto:mailto:cgillooley@aha.org">cgillooley@aha.org</a>, regarding any questions related to quality.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/08/cms-releases-fy-2025-long-term-care-hospital-pps-final-rule-bulletin-8-2-2024.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS Releases FY 2025 Long-term Care Hospital PPS Final Rule PDF."><img src="/sites/default/files/2024-08/cover-cms-releases-fy-2025-long-term-care-hospital-pps-final-rule-bulletin-8-2-2024.png" data-entity-uuid data-entity-type="file" alt="Special Bulletin: CMS Releases FY 2025 Long-term Care Hospital PPS Final Rule cover." width="NaN" height="NaN"></a></p></div></div></div> Fri, 02 Aug 2024 15:51:54 -0500 Long-Term Care PPS /news/headline/2024-08-01-cms-issues-ltch-final-rule-fy-2025 <p>The Centers for Medicare & Medicaid Services Aug. 1 <a href="https://www.federalregister.gov/public-inspection/2024-17021/medicare-medicaid-and-childrens-health-insurance-programs-hospital-inpatient-prospective-payment">finalized policy changes</a> to the long-term care hospital standard rate payment system that will increase payments by 2.0%, or $45 million, in fiscal year 2025 relative to FY 2024. This includes a 3.0% market basket update, a cut of 0.5 percentage points for productivity, and a cut related to outlier payments, among other policies. Specifically, due to an increase in the outlier threshold, CMS will reduce outlier payments as a percentage of total LTCH PPS standard federal payment rate payments by 0.8%. CMS also finalized a rebasing of the LTCH market basket using a 2022 base year.  </p><p> <br>In a statement shared with the <a href="/press-releases/2024-08-01-aha-statement-fy-2025-final-ipps-ltch-payment-rule">media</a>, Molly Smith, AHA group vice president for public policy, said, “We are troubled that the final long-term care hospital outlier threshold is nearly 30% higher than it is currently. Since FY 2021, this figure has increased by more than 180%, which forces these hospitals to absorb hundreds of thousands of dollars in additional losses when caring for the sickest patients. This increase will create serious access issues for patients and put additional burden back on acute-care hospitals and other providers that do not specialize in caring for this unique patient population.”</p><p>While CMS did not adopt or remove any quality measures from the LTCH Quality Reporting Program, the agency finalized its proposal to adopt and modify certain patient assessment items related to health-related social needs; LTCHs will be required to collect and report specific data elements related to living situation, food and utilities beginning with the FY 2028 LTCH QRP. CMS also extends the window in which patient assessments must be done from three to four days after admission.</p><p>Provisions of the final rule generally take effect Oct. 1. </p> Thu, 01 Aug 2024 17:00:48 -0500 Long-Term Care PPS /news/headline/2024-06-10-aha-says-cms-proposed-fy-2025-ltch-payment-updates-not-enough <p>The AHA submitted a <a href="/lettercomment/2024-06-07-aha-comment-cmss-fiscal-year-2025-ltch-prospective-payment-system-proposed-rule">lette</a>r to the Centers for Medicare & Medicaid Services June 7, commenting on the fiscal year 2025 proposed rule for the long-term care hospital prospective payment system. The AHA expressed concerns about CMS’ payment updates, which includes an inadequate proposed market basket update as well as a harmful proposed update to high-cost outlier payments. AHA argued that these updates risk jeopardizing care access to some Medicare beneficiaries and lag inflation. <br>  <br>“These escalating costs for essential clinicians, personnel, drugs, supplies, and other items and services have put a strain on the entire health care continuum,” AHA wrote. “In all, Kaufman Hall found that total expenses have risen by 18% for hospitals compared to 2021. This is felt keenly by LTCHs, who care for the highest acuity patients with unique needs.”  <br><br>The AHA submitted separate comments on the rule’s <a href="/lettercomment/2024-06-05-aha-comments-cms-inpatient-payment-proposal-fy-2025">inpatient PPS</a> and <a href="/lettercomment/2024-06-10-aha-comments-cms-proposed-transforming-episode-accountability-model-team">Transforming Episode Accountability Model</a> proposals. </p> Mon, 10 Jun 2024 15:37:04 -0500 Long-Term Care PPS