CMS Proposes to Eliminate ‘25% Rule’ in LTCH PPS Rule for FY 2019

The Centers for Medicare & Medicaid Services late today issued its long-term care hospital prospective payment system proposed rule for fiscal year 2019. Under the proposed rule, relative to FY 2018 rates, traditional LTCH PPS rates would increase by a net of 0.2% ($6 million), while payment rates for site-neutral cases would decrease by a net of 1.1% ($11 million) – an overall decrease of $5 million. CMS also proposes to eliminate the LTCH 25% Rule – a change long advocated for by the AHA – in recognition of the growing impact of the LTCH site-neutral payment policy, which has, at least in part, addressed the agency’s concerns that originally led to 25% Rule implementation. In order to implement this change in a budget-neutral fashion, CMS would pair 25% Rule removal with a one-time, permanent adjustment to the standard payment rate for LTCHs – a 0.9% cut. This offset would affect cases paid a standard rate or, for site-neutral cases, the standard rate portion of their blended payment. AHA Executive Vice President Tom Nickels said AHA was pleased that the agency would permanently revoke the 25% Rule. “This will help ensure that patients get the care they need when they need it without facing arbitrary restrictions by non-patient-centered regulations,” he said. With regard to quality reporting, and consistent with changes on the inpatient PPS front, CMS proposes to remove three measures from the LTCH Quality Reporting Program. If finalized, LTCHs would no longer have to report data for the NHSN MRSA, Ventilator-Associated Event, or seasonal vaccination measures as of Oct. 1 of this year. The proposed rule will be published in the May 7 Federal Register and comments will be accepted through June 25.