CMS cuts payments to long-term care hospitals by $460 million over 3 years
The Centers for Medicare & Medicaid Services cut payments to long term care hospitals by $460 million over the next three years. In the rate year 2008 long-term care hospital prospective payment system final rule CMS is implementing the cuts by expanding the 25% Rule to all LTCHs, including free-standing, satellite and grandfathered hospital-within-hospitals. Unlike the proposed rule, CMS will implement the 25% Rule using a three-year transition. The rule, released May 1, increases the RY 2008 LTCH standard payment by 0.71% to $38,356.45. The update includes a market basket increase of 3.2% and a coding reduction of 2.49%. The high-cost outlier threshold is $22,954, a 54% increase over 2007 and well above the proposed fixed-loss amount of $18,774 and the 2007 threshold of $14,887. Overall, the net impact of the rule is negative 3.8%, a reduction of more than $153 million over 2007 Medicare LTCH payments. “The AHA is disappointed that CMS moved forward with blunt cuts to LTCHs by expanding the 25% Rule to all LTCHs,” said Don May, AHA vice-president for policy. “CMS should focus instead on creating patient and facility criteria that ensure proper access to long-term acute hospital care. Unfortunately, CMS has let budget priorities take precedent over good health policy."

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