The Centers for Medicare & Medicaid Services (CMS) has released the Fiscal Year (FY) 2025 Final Rule, a critical update for both the Hospital Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS). For professionals in healthcare, especially those focused on Long Term Acute Care Coding, understanding these changes is paramount for accurate billing and compliance. This rule dictates the Medicare payment policies and rates that will impact long-term care hospitals significantly.
For a detailed breakdown of the essential provisions, refer to the summary of key provisions.
The framework for LTCH payments originates from the Balanced Budget Refinement Act of 1999 (BBRA) and the Benefits Improvement and Protection Act of 2000 (BIPA). These legislative acts established the basis for Medicare Part A payments for long-term care hospitals, covering both operating and capital-related costs. The LTCH Prospective Payment System (PPS) officially came into effect for cost reporting periods starting on or after October 1, 2002, applying to hospitals meeting the criteria defined in section 1886(d)(1)(B)(iv) of the Social Security Act. This section specifies a long-term care hospital as having “an average inpatient length of stay… of greater than 25 days.” Further amendments, such as section 1886(m) of the Act added by the MMSEA of 2007, solidified these regulations.
It’s important to note the evolution of LTCH classifications. While section 1886(d)(1)(B)(iv)(II) previously offered an alternative definition, the 21st Century Cures Act in 2015 redesignated hospitals meeting this alternative definition. These facilities, now known as “Extended Neoplastic Disease Care Hospitals,” operate under a different category (section 1886(d)(1)(b)(vi) of the Act) and are no longer subject to the LTCH PPS under section 1886(m). This distinction is vital for accurate long term acute care coding and billing processes. Hospitals like provider 33-2006, now classified as Extended Neoplastic Disease Care Hospitals, are outside the scope of LTCH PPS.
The BBRA section 123 mandates that the LTCH PPS must function as a per-discharge system utilizing a diagnosis-related group (DRG) based patient classification. This system is designed to reflect the varying resource needs and costs associated with patient care in LTCHs while maintaining budget neutrality. Furthermore, BIPA section 307(b)(1) empowers the Secretary to adjust LTCH PPS payments. These adjustments can include modifications to DRG weights, area wage adjustments, geographic reclassification, outlier payments, annual updates, and disproportionate share adjustments. These adjustments are critical considerations for long term acute care coding professionals as they directly impact reimbursement amounts.
Navigating the LTCH Quality Reporting Program
The Affordable Care Act, through section 3004, introduced quality reporting requirements for long-term care hospitals (LTCHs), along with inpatient rehabilitation facilities (IRFs), and Hospice Programs. Accurate long term acute care coding is indirectly linked to quality reporting as the data derived from coding informs many quality measures. For in-depth information, visit the Quality Reporting Programs for LTCHs, IRFs, and Hospices page. Compliance with these reporting programs is essential for LTCHs to avoid payment penalties and maintain their standing within the Medicare system.
Your Hospital Resource Hub: The Hospital Center
For Medicare Fee-for-Service (FFS) hospitals seeking comprehensive information tailored to their needs, the Hospital Center serves as an invaluable one-stop resource. This center provides access to a wealth of information relevant to hospital operations, regulations, and payment systems, including aspects related to long term acute care coding and compliance.
In conclusion, the FY 2025 Final Rule represents a significant update for long-term care hospitals. A thorough understanding of these changes, particularly concerning the LTCH PPS and quality reporting programs, is crucial for healthcare professionals involved in long term acute care coding, billing, and administration. Staying informed ensures accurate financial practices and optimal patient care within the evolving landscape of Medicare regulations.
