Long-Term Care Hospital PPS: FY 2021 Final Rule

Regulatory Advisory
October 2, 2020

Sign In to Download the Regulatory Advisory:
Long-Term Care Hospital PPS: FY 2021 Final Rule


At Issue
On Sept. 3, the Centers for Medicare & Medicaid Services (CMS) issued the inpatient and long-term care hospital (LTCH) prospective payment systems (PPS) fiscal year (FY) 2021 final rule. This advisory covers the rule’s LTCH-related provisions. The AHA issued a separate Regulatory Advisory on the inpatient PPS provisions. The rule takes effect Oct. 1.

Our Take
The AHA appreciates the streamlined LTCH provisions in this rule, relative to prior years, which helps LTCH facilities focus on their COVID-19 responses. We note that in FY 2021, for the first time, no blended payments will apply to LTCH site-neutral cases. As such, we remain concerned that these cases continue to be materially underpaid, especially when paid the full site-neutral rate – as AHA has repeatedly communicated to CMS and other policymakers. View the entire Regulatory Advisory below.

Key Takeaways

The final rule:

  • Decreases net LTCH payments by 1.1% (-$40 million) in FY 2021, compared to the prior year.
  • Pays all LTCH site-neutral cases a full site-neutral rate, as required by law, rather than a blended rate.
  • Rebases and revises the LTCH market basket to reflect more current LTCH costs.
  • Updates LTCH PPS wage index values.
  • Makes no changes to the LTCH quality reporting program.