Long-Term Care Hospital PPS

August 1, 2025

At A Glance

The Centers for Medicare & Medicaid Services (CMS) July 31 issued a final rule for the inpatient and long-term care hospital (LTCH) prospective payment systems (PPS) for fiscal year (FY) 2026. This Regulatory Advisory reviews highlights of the LTCH provisions in the rule, while the inpatient PPS provisions are covered in a separate advisory.

KEY HIGHLIGHTS

The final rule will:

Increase net LTCH payments by 3.3%, or $83 million, in FY 2026, relative to FY 2025, including both standard rate payments and site-neutral payments.
- LTCH standard rate payments will increase by 3.0% in FY 2026 compared to FY 2025. This includes a 3.4% market basket increase reduced by a 0.7% productivity adjustment. It also includes the impacts of the outlier polices, mentioned below.
- Site-neutral LTCH PPS payments will increase by 10%, or $10 million, in FY 2026 relative to FY 2025.
Increase the LTCH standard rate fixed-loss amount for high-cost outlier (HCO) cases from $77,048 for FY 2025 to $78,936 for FY 2026.
Remove four patient assessment data elements from the LTCH quality reporting program (QRP) and modify the COVID-19 vaccine among patients and residents measure.