CMS has issued a proposed rule to update the prospective payment system federal rate for long-term acute care hospitals by 0.71% to $38,356.45 for rate year 2008 instead of the 0% update recommended by the Medicare Payment Advisory Commission earlier this year. The proposed rule would also set the outlier fixed-loss amount for rate year 2008 at $18,477, up from $14,887 in rate year 2007. This threshold is projected to limit estimated aggregate outlier payments to 8% of total estimated payments under the LTC hospital PPS. Any revisions to the LTC diagnostic related groups and relative weights will be made at the same time as the hospital inpatient PPS update, on Oct. 1, 2007.
In addition to the update, CMS is extending its “25% rule” to apply to certain situations not currently covered under the existing regulations. Under this proposed policy, the payment adjustment would apply to virtually all LTC hospitals for which more than 25% (or the applicable percentage in certain special circumstances) of its discharged patients were admitted from an individual hospital, regardless of whether that hospital was located in the general vicinity of the LTC hospital. CMS also outlines an approach to revise the current payment adjustment formula for specific short-stay outlier patients. Medicare would include, as part of the SSO payment formula, the “comparable IPPS amount” for that particular DRG for those LTC hospital discharges with a length of stay that is less than or equal to an “IPPS-comparable threshold.”
Besides the LTC hospital PPS proposed changes, CMS is amending Medicare’s payment policies for graduate medical education payments to a teaching hospital when its residents are being trained in a nonhospital site. The proposed rule requires, as of July 1, 2007, that the teaching hospital pay at least 90% of the total costs of training residents in the nonhospital setting. To reduce the administrative burden of documenting those costs, CMS has also proposed to allow hospitals to use specified proxies to determine those costs. Download the proposed rule.
