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CMS ANNOUNCES RATE YEAR 2009 PAYMENT AND POLICY CHANGES FOR LONG-TERM CARE HOSPITALS

CMS ANNOUNCES RATE YEAR 2009 PAYMENT AND POLICY CHANGES FOR LONG-TERM CARE HOSPITALS

The Centers for Medicare & Medicaid Services (CMS) today published the final regulation establishing rate year (RY) 2009 Federal payment rates and policies for s), a step that ensures that some of the most vulnerable Medicare beneficiaries continue to receive high quality care from their long-term care hospitals (LTCHs), while helping to ensure the solvency of the Medicare Trust Fund.  The nearly 400 LTCHs across the nation are acute care hospitals that treat some of Medicare’s most severely ill or medically complex patients.

“The policies we are announcing today will help to ensure access to high quality services in an inpatient setting for people with Medicare who are severely ill and who need long-term hospital-level treatment,” CMS Acting Administrator Kerry Weems said.  “The final rule provides incentives to LTCHs to continue to provide compassionate, efficient care to some of Medicare’s most severely ill patients, while helping to preserve the solvency of the Medicare Hospital Trust Fund for future generations.”

Today, CMS issued a final payment rule for Rate Year 2009 that increases the standard Federal rate for LTCHs by 2.7 percent  from the 2008 rate established by Congress in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA).  That increase establishes a standard Federal rate for RY 2009 of $39,114.36 and is applicable to discharges during the 15 month period from July 1, 2008 through September 30, 2009.  Aggregate LTCH PPS payments for RY 2009 are estimated at approximately $4.47 billion, under the final rule, an increase of approximately $110 million over estimated payments in RY 2008.

LTCHs are generally defined as hospitals with an average Medicare inpatient length of stay greater than 25 days.  These hospitals provide extended medical and rehabilitative care for patients with clinically complex conditions, including such services as weaning from ventilators so they can breathe without this assistance, pain management, and rehabilitation.

A beneficiary who is admitted directly to an LTCH pays the same deductible as he or she would pay in an acute care hospital, but if the beneficiary is admitted to the LTCH within sixty days of discharge from another inpatient facility, he or she does not have to pay a second deductible.

Medicare pays LTCHs a single, predetermined amount under the LTCH prospective payment system (PPS) for an inpatient stay based on the patient’s diagnosis and the severity of the patient’s condition.  The LTCH PPS uses a classification system called the Medicare-severity long-term care diagnosis-related groups (MS-LTC-DRG).  These are the same MS-DRGs that are used to determine payments for inpatient stays in acute care hospitals, but the payments based on the MS-LTC-DRGs differ from those under the IPPS because the MS-LTC-DRGs reflect the hospital resources required to treat patients during the long-stays that are characteristic for LTCH patients.  The payment to the LTCH does not include payment for the services of physicians and nonphysician practitioners who bill Medicare separately for the care they provide while the patient is hospitalized.  Under certain circumstances, if the hospital’s estimated cost of treating a beneficiary is much higher than the adjusted payment amount for the case, Medicare pays an additional amount to the hospital to cover a percentage of the excess costs of providing treatment in that case.

The final rule will be posted on the CMS Web site at:

www.cms.hhs.gov/LongTermCareHospitalPPS/LTCHPPSRN/list.asp.

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