On June 3, 2009, the Centers for Medicare & Medicaid Services (CMS) published two regulations impacting payments under the long-term care hospital (LTCH) prospective payment system (PPS). First, CMS published an interim final rule with comment period revising the Medicare severity long-term care diagnosis-related group (MS-LTC-DRG) relative weights for federal fiscal year (FY) 2009 due to the misapplication of CMS’s established methodology in the calculation of the budget neutrality factor in the final rule. This error resulted in relative weights that are higher, by approximately 3.9%, or $130 million for all of FY 2009 (October 1, 2008 through September 30, 2009). However, due to agency limitations on retroactive rulemaking and prospective adjustments to rectify prior errors, CMS is only applying the corrected weights to the remainder of FY 2009 (that is, from June 3, 2009 through September 30, 2009). CMS estimates the changes will decrease aggregate LTCH PPS payments by approximately $43 million (or approximately 0.9%) for all LTCHs through the end of FY 2009. CMS will accept comments on the interim final rule until June 29, 2009. Second, CMS has issued a “supplemental” proposed rule revising the proposed rate year (RY) 2010 MS-LTC-DRG relative weights and the proposed RY 2010 high cost outlier fixed-loss amount included in its May 22, 2009 proposed rule based on the revised FY 2009 MS-LTC-DRG relative weights contained in the interim final rule. CMS estimates that under the supplemental rule, payments to LTCHs would increase by approximately $101 million (or about 2.2%) from FY 2009 to RY 2010. Note that this estimate is 0.6% lower than the 2.8% increase originally stated in the May 2009 RY 2010 proposed rule. Comments will be accepted on the supplemental rule through June 30, 2009.
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