News | Medicare Payment and Reimbursement

Increased Medicare payments for COVID-19 care to stretch back to late January

News | Medicare Payment and Reimbursement

Increased Medicare payments for COVID-19 care to stretch back to late January

Medicare will provide hospitals and long-term care hospitals (LTCHs) a retroactive increase in payments for care provided to COVID-19 discharges as reflected on claims dating back to Jan. 27, the agency says.

CMS this week will begin sending a 20% increase in Inpatient Prospective Payment System (IPPS) payments for patients previously treated for COVID-19 — far in advance of the latest quarterly update. The payments, as required by the CARES Act, will be automatically sent to previously paid providers that used the COVID-19 code (diagnosis code B97.29).   

CMS on April 21 will start to increase inpatient hospital payments by 20% for Medicare claims related to the care of COVID-19 patients on April 1 or later (diagnosis code U07.1).

Also on April 21, LTCHs will be paid the LTCH standard federal rate — instead of the site-neutral rate — for all cases, even those that don’t meet the criteria of three days in the ICU in an IPPS hospital or assignment to a mechanical ventilation DRG in the LTCH for more than 96 hours.

LTCHs also will be paid retroactively to Jan. 27 at the LTCH standard federal rate. 

Also waived by CMS were:

  • The LTCH "50% Rule," which sets the minimum share of discharges required to be paid at LTCH rates rather than site-neutral rates
  • The inpatient rehabilitation facility (IRF) “3-hour Rule,” related to the amount of rehabilitation in which Medicare Part A fee-for-service patients must participate

FY21 proposed rules issued for IRFs, SNFs, hospice

CMS also recently issued a series of proposed rules, not related to COVID-19, to establish FY21 payment and policies for post-acute care providers.

Provisions of the IRF proposed rule included:

  • Increasing net payments by 2.5% ($270 million)
  • Ending the requirement for post-admission physician evaluation documentation for all discharges
  • Retaining the IRF quality reporting program without changes
  • Accepting comments through June 15

CMS had issued a March 31 interim final rule with a temporary waiver of the physician evaluation requirement for the duration of the COVID-19 public health emergency.

Provisions of the skilled nursing facilities (SNFs) proposed rule included:

  • Increasing aggregate payments by 2.3% ($784 million)
  • Revising geographic delineations used to identify providers as an urban or a rural facility for wage index calculations
  • Changing the ICD-10 code mappings used under the Patient Driven Payment Model
  • Tweaking the SNF Value-Based Purchasing program
  • Accepting comments through June 9

The hospice proposed rule included model examples of the required hospice election statement and the hospice election statement addendum.

Key provisions of the rule included:

  • Increasing hospice payments by 2.6% ($580 million)
  • Increasing the annual hospice cap to $30,743.86
  • Accepting comments through June 9

About the Author

Rich Daly, HFMA senior writer and editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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