On May 11, 2012, CMS published a proposed rule updating Medicare long-term acute care hospital (LTCH) prospective payment system (PPS) policies and rates for FY 2013. Highlights include the following provisions:
- Two different standard federal rates would apply to discharges during FY 2013. During the first three months of FY 2013, the standard federal rate would be $41,026.88, falling to $40,507.48 during the last nine months (both rates are above the FY 2012 rate of $40,222). The rate reflects an estimated market basket increase of 3.0% less a productivity adjustment of -0.8% and less an additional -0.1% adjustment mandated by ACA. For the last nine months of FY 2013, the market basket increase would be further reduced by a budget neutrality adjustment (discussed below).
- CMS proposes to adopt an LTCH-specific market basket based entirely on Medicare cost report data from LTCHs (replacing the rehabilitation, psychiatric, and LTCH market basket). CMS estimates that the LTCH-specific market basket update for FY 2013 would be the same as under current policy.
- CMS proposes a one-time budget neutrality adjustment that would result in a permanent 3.75% reduction to the LTCH base rate. The adjustment would be implemented over three years, FYs 2013, 2014 and 2015, except it would not apply to payments for discharges occurring on or after October 1, 2012 through December 29, 2012 because of a statutory prohibition (resulting in the two standard federal rates for FY 2013).
- The fixed loss amount for high-cost outlier cases would be $15,728, down from $17,931 in FY 2012.
- CMS proposes a one-year extension of the moratorium on the full application of the 25% Rule, until cost reporting periods beginning on or after October 1, 2013. LTCHs with cost reporting periods that begin between July 1, 2012 and September 30, 2012 would not qualify for the one-year extension until their subsequent cost reporting period. CMS indicates that “within the near future” it may recommend revisions to the payment policies addressing MedPAC’s recommendations for the development of patient-level and facility-level criteria.
- Medicare payment for the so-called “very short-stay cases” will be lowered to a rate based on the IPPS per diem beginning with discharges on or after January 1, 2013.
- CMS proposes to add five quality measures for LTCH reporting beginning in FY 2016, including: (1) percent of nursing home residents who were assessed and appropriately given the seasonal influenza vaccine, (2) percent of residents assessed and appropriately given the pneumococcal vaccine, (3) ventilator bundle, (4) restraint rate per 1,000 patient days, and (5) influenza vaccination coverage among healthcare personnel.
Comments will be accepted until June 25, 2012.