The Centers for Medicare & Medicaid Services (CMS) has released the Fiscal Year (FY) 2025 final rule, providing critical updates to Medicare payment policies and rates for both the Hospital Inpatient Prospective Payment System and the Long-Term Care Hospital (LTCH) Prospective Payment System. These changes are essential for healthcare facilities, particularly long term acute care hospitals, to understand for accurate coding and compliant billing practices.
Long-term acute care hospitals, as defined under section 1886(d)(1)(B)(iv) of the Social Security Act, are hospitals with an average inpatient length of stay greater than 25 days. The regulatory framework for LTCHs has evolved through key legislation such as the Balanced Budget Refinement Act of 1999 (BBRA) and the Benefits Improvement and Protection Act of 2000 (BIPA). These acts established the foundation for the Medicare prospective payment system (PPS) for LTCHs, which became effective for cost reporting periods starting on or after October 1, 2002. Further amendments, including those from the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) and the 21st Century Cures Act, have shaped the current landscape of LTCH classifications and payment methodologies. It’s important for coding professionals to stay abreast of these legislative changes as they directly impact coding guidelines and reimbursement.
The LTCH PPS operates as a per discharge system utilizing a diagnosis-related group (DRG) based patient classification system. This system is designed to reflect the diverse resource utilization and costs associated with patient care in LTCHs while ensuring budget neutrality. The accuracy of medical coding is paramount under this DRG-based system. Proper coding ensures that hospitals receive appropriate reimbursement for the services they provide, reflecting the complexity and resources required for each patient’s care. CMS periodically examines and adjusts payments under the LTCH PPS, including modifications to DRG weights, wage adjustments, geographic reclassification, outlier payments, and disproportionate share adjustments. Understanding these adjustments and their implications for coding practices is crucial for financial stability and regulatory compliance in long term acute care settings.
Furthermore, long-term care hospitals are subject to the Quality Reporting Program, mandated by section 3004 of the Affordable Care Act. This program requires LTCHs to meet specific quality reporting standards. Performance under the Quality Reporting Program can affect payment adjustments, adding another layer of complexity to the financial operations of LTCHs. Accurate and comprehensive coding plays a supportive role in quality reporting, as coded data often informs quality metrics and performance assessments. Therefore, adherence to Long Term Acute Care Hospital Coding Guidelines is not only essential for accurate billing and optimal reimbursement but also integral to demonstrating quality care and achieving favorable outcomes in quality reporting initiatives.
For hospitals seeking comprehensive resources and information related to Medicare Fee-for-Service (FFS) programs, the Hospital Center serves as a valuable online hub. Staying informed about the FY 2025 final rule and related coding guidelines is a continuous process for long term acute care hospitals. Accurate coding, driven by a thorough understanding of these guidelines and regulatory updates, is fundamental to navigating the complexities of the Medicare payment system and ensuring the financial health and operational success of LTCHs.
