What's Happening?
Hospital associations, including the American Hospital Association and the Coalition of Long-Term Acute-Care Hospitals, are urging Congress to refine the payment system for long-term care hospitals (LTCHs). The groups have highlighted the financial strain
caused by a 'dual-rate' payment system implemented by Medicare in 2016, which has led to a significant decrease in Medicare spending on LTCH services and the closure of over a quarter of LTCHs in the past decade. The current system restricts full payments unless specific criteria are met, such as a three-day ICU stay or 96 hours of ventilator care, resulting in payments that are below the cost of LTCH care. The hospital groups propose expanding the payment criteria to include high-complexity patients and revising the annual LTCH prospective payment system (PPS) to better reflect the costs of high-acuity cases.
Why It's Important?
The financial instability of LTCHs poses a significant risk to healthcare infrastructure, particularly in rural areas where access to specialized care is already limited. The closure of LTCHs exacerbates hospital and post-acute capacity concerns, potentially leading to increased pressure on short-term acute care hospitals. The proposed changes aim to ensure the financial viability of LTCHs, which are crucial for patients requiring extended and complex care. By addressing the payment system's shortcomings, the hospital groups hope to prevent further closures and maintain access to necessary healthcare services for high-acuity patients.
What's Next?
The hospital groups are advocating for Congress to consider their proposed reforms, which include expanding the dual-rate PPS criteria and adjusting the annual LTCH PPS components. These changes are intended to offset financial losses and better accommodate high-acuity cases. Additionally, the groups are calling for a review of the system's inflation adjustments and a change to the 1983 requirement for a 25-day average length of stay. The outcome of these proposals will depend on legislative action and the willingness of Congress to address the financial challenges faced by LTCHs.
