CHA News Article

CMS Issues Final FFY 2016 LTCH Rule

The Centers for Medicare & Medicaid Services (CMS) has issued its long-term care hospital prospective payment system (LTCH PPS) final rule for federal fiscal year (FFY) 2016. The final rule implements the Bipartisan Budget Act of 2013 mandate to add a site-neutral payment component to the LTCH PPS, which will be phased in through a two-year transition that begins Oct. 1. CMS estimates that the combined fiscal impact of the FFY 2016 payment changes to both the “site neutral “ cases and those paid under the LTCH PPS will be negative 4.6 percent, or a decrease in LTCH payments of $250 million as compared to FFY 2015.

The final rule makes several changes that address hospital concerns related to the CMS methodology for site-neutral payments, including eliminating the use of inpatient PPS discharge status codes to identify cases eligible for a standard LTCH PPS payment, and lowering the fixed-loss amount for high-cost outlier cases. CMS finalized three measures for the FFY 2018 LTCH quality reporting program to satisfy the requirements of the Improving Medicare Post Acute Transformation Act of 2014. The measures assess skin integrity, falls with major injury and all-cause readmissions. The final rule is attached, and CHA will provide a detailed summary and DataSuite analysis in the coming weeks. The rule’s provisions will take effect Oct. 1.