CMS finalizes long-term care hospital prospective payment system for FY 2024

The Centers for Medicare & Medicaid Services Aug. 1 issued the long-term care hospital prospective payment system final rule for fiscal year 2024. In the rule, CMS has finalized an update that it estimates will increase overall payments to LTCHs in FY 2024 by 0.2%, or $6 million, compared to FY 2023. This includes a $4 million reduction in standard LTCH PPS payments and a $10 million increase in site-neutral payments. For standard rate cases, the agency finalized a market basket update of 3.5%, reduced by a 0.2% productivity adjustment. However, it also finalized a fixed-loss threshold for high-cost outlier cases of $59,873 in FY 2024, as compared to $38,518 in FY 2023; while this final number is lower than the $94,378 the agency proposed, it will still reduce overall net standard payments to LTCHs by 2.9%.   

In a statement shared with the media today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. … In addition, while we appreciate CMS adopting some of our suggested improvements in its long-term care hospital outlier threshold calculation, it still finalized a figure that is 55% higher than it is currently. Most long-term care hospitals cannot afford to absorb such financial losses. We are concerned it will harm their ability to care for the sickest patients – a population they provide care for already at a considerable financial loss.”

Provisions generally take effect Oct. 1. AHA members will receive a Special Bulletin with further details on the rule.