CMS has published an interim final rule with comment period to implement a recent statutory provision addressing Medicare payments to certain rural long-term care hospitals (LTCHs) for severe wound care discharges. By way of background, under the Pathway for SGR Reform Act of 2013, discharges that do not meet certain statutory criteria are paid at a relatively lower “site-neutral” payment rate, while discharges that do meet the statutory criteria continue to receive reimbursement at the LTCH PPS standard federal payment rate, effective for cost reporting periods beginning on or after October 1, 2015. Section 231 of the Consolidated Appropriations Act, 2016 establishes a temporary exception from the site-neutral payment rate for severe wound care discharges for certain rural LTCHs, applicable to discharges prior to January 1, 2017. The term “severe wound” is defined as a stage 3 wound, stage 4 wound, unstageable wound, non-healing surgical wound, infected wound, fistula, osteomyelitis, or wound with morbid obesity, as identified in the claim. CMS estimates that only two LTCHs currently meet the criteria for rural LTCH as specified in the statute.

In addition, the rule also modifies current limits on hospital redesignation by the Medicare Geographic Classification Review Board (MGCRB) to permit hospitals nationwide to reclassify based on their acquired rural status, effective with reclassifications beginning with FY 2018. It also would allow hospitals with existing MGCRB reclassification to seek rural reclassification for inpatient prospective payment system (IPPS) payment and other purposes and while keeping their existing MGCRB reclassification.

The rule is effective April 21, 2016, although CMS will accept comments on the rule until June 17, 2016.