AHA Comment Letter on Long-term Care Facility PPS

June 9, 2023

The Honorable Chiquita Brooks-LaSure
Administrator Centers for Medicare & Medicaid Services, Attention: CMS-1785-P
P.O. Box 8013
Baltimore, MD 21244-8013

Submitted Electronically

Re: Medicare Program; Proposed Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2024 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Rural Emergency Hospital and Physician-Owned Hospital Requirements; and Provider and Supplier Disclosure of Ownership; 88 Fed. Reg. 26,658 (May 1, 2023).

Dear Administrator Brooks-LaSure:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including approximately 250 long-term care hospitals (LTCH), and our clinician partners — more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the fiscal year (FY) 2024 LTCH prospective payment system (PPS) proposed rule. We are submitting separate comments on the rule’s inpatient PPS (IPPS) proposals.

AHA and its member LTCHs are extremely concerned about the payment reductions proposed in this rule. If finalized, they would harm not only LTCHs, but also Medicare’s most severely ill patient populations and the entire health care continuum. We are therefore very grateful that CMS has included in this rule a request for comments on how it can mitigate some of these proposed reductions, such as the high-cost outlier (HCO) threshold.

For important context, LTCHs play a highly specialized role in the care continuum by focusing on caring for critically ill, medically complex patients that require extended hospital stays. Less than 1% of Medicare discharges from acute-care hospitals are discharged to an LTCH, and they are among the most highly acute patients that exist. With an average length of stay of more than 25 days, these hospitals use their experience to ensure the best possible outcomes for these beneficiaries.

The unique capabilities and care provided by LTCHs was on full display during the COVID-19 public health emergency (PHE). This included LTCHs caring for the most seriously afflicted patients, with COVID-19 patients being three times more likely than non-COVID-19 patients to be admitted to an LTCH. While doing so, LTCHs also assisted their community partners by decompressing acute-care hospitals when there was a shortage of ICU beds.1 Without the additional capacity these hospitals provided, numerous communities across the country would have faced increased difficulty meeting the demand for care.

As such, and as further explained below, we implore CMS to make significant revisions to some of its proposed policies for FY 2024. Most imperative to address is the proposed fixed-loss threshold for HCO payments, which CMS proposes to increase by 150% compared to FY 2023. Therefore, we urge CMS to adopt methodological changes that would result in a lower, and more appropriate, threshold. In addition, we are deeply concerned about the inadequacy of the proposed market basket update given the changing health care system dynamics and its workforce challenges. As such, we urge CMS to utilize its authority to provide a market basket adjustment to account for what the agency missed in the FY 2022 market basket forecast. 

View the detailed letter below.