Long-term Care Hospital PPS Final Rule for FY 2022

AHA Regulatory Advisory
August 26, 2021

Download the Regulatory Advisory PDF

At A Glance

At Issue

On Aug. 2, the Centers for Medicare & Medicaid Services (CMS) issued its fiscal year (FY) 2022 final rule for the inpatient and long-term care hospital (LTCH) prospective payment systems (PPS). This advisory covers the rule’s LTCH-related provisions. We issued a separate advisory on the inpatient PPS provisions.

Our Take

The AHA appreciates that the agency took a relatively streamlined approach to the LTAC provisions in this rule. This will help LTCH facilities focus on their COVID-19 responses and not on modifying operations to comply with substantial changes in policy. This is particularly important given recent surges of the virus, as well as AHA’s analysis that found that in December 2020, 1 out of 2 LTCH patients had or were recovering from the virus. In addition, we note that since LTCH site-neutral cases are no longer being paid a blended rate, some LTCHs continue to struggle with the Medicare payment amount. Specifically, Medicare on average continues to underpay materially for this population of cases, as AHA has shared with CMS and other policymakers on many occasions. With regard to quality, while AHA suggested an incremental — rather than immediate — implementation of the COVID-19 vaccination-among-health care personnel (HCP) measure, we plan to work with our members and CMS to gather this important data without unnecessarily increasing burdens on providers.

What You Can Do

  • Share the attached summary with your senior management team to examine the impact these changes, which are generally effective Oct. 1, will have on your organization in FY 2022.
  • As an additional resource, refer to the recording and materials for the Aug. 10 member call that AHA hosted on this and the other FY 2022 final rules for post-acute care.

Further Questions

Please contact Rochelle Archuleta, director of policy, at rarchuleta@aha.org for questions on payment provisions, and Caitlin Gillooley, senior associate director of policy, at cgillooley@aha.org for quality-related questions.

Key Takeaways

The final rule:

  • Increases net LTCH payments by 1.1% ($42 million) in FY 2022.
  • Calculates FY 2022 payments using data from FY 2019, instead of FY 2020.
  • Expands the LTCH Quality Reporting Program to assess the rate of COVID-19 vaccination among health care personnel.

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