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CMS issues LTCH PPS final rule for FY 2018

PAYMENT FOR LONG TERM ACUTE CARE

By Melvin J. Howard

The Centers for Medicare & Medicaid Services issued its long-term care hospital prospective payment system final rule for fiscal year 2018. Under the rule, traditional LTCH PPS rates will be updated by 1.0%, as mandated, while payment rates for site-neutral cases will decrease by a net 20%. After accounting for all the rule's provisions, LTCH payments are estimated to decrease by an overall 2.4% ($110 million) compared to FY 2017 payment levels. In addition, CMS finalized a regulatory moratorium on the 25% Rule during FY 2018 so it can evaluate whether the policy is still needed; this proposal is estimated to increase payments by $70 million. I am pleased that CMS has decided to place a moratorium on the implementation of the 25% Rule for LTCHs and LTACHs to allow time to determine if the policy is necessary this issue has been up in the air for awhile . In addition, CMS finalized as proposed a new short-stay outlier policy that pays a graduated per diem rate, blending the inpatient PPS and LTCH amounts, which is intended to remove the financial incentive to delay discharge. The agency also finalized, with slight modifications, its proposal to narrow the "separateness and control" requirements so that they apply only to IPPS-excluded hospitals that are co-located with IPPS hospitals. The rule finalizes a number of changes to the FY 2020 LTCH Quality Reporting Program, including the addition of measures assessing pressure ulcer changes, compliance with a spontaneous breathing trial, and ventilator liberation rates, for which agencies will begin reporting data on July 1, 2018. CMS will remove an existing pressure ulcer measure, and a measure assessing all-cause readmissions within 30 days of LTCH discharge. In addition, CMS substantially scaled back its proposal to require LTCHs to collect certain standardized patient assessment data beginning with LTCH admissions on or after April 1, 2018. Changes will be effective Oct. 1.

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