Organizations representing thousands of U.S. hospitals have proposed federal policy reforms for the long-term care hospital market, including changing the “dual-rate” payment system.
Long-term care hospitals provide specialized post-acute care. Healthcare leaders and organizations have long raised concerns about these hospitals, which they say face chronic underfunding and high denials for prior authorizations, leading to dozens of closures in recent years.
The American Hospital Association, the Federation of American Hospitals, the National Association of Long Term Hospitals and the Coalition of Long-Term Acute-Care Hospitals published their policy recommendations in late March.
Among the recommended policies:
- Expanding Prospective Payment System criteria to include beneficiaries with multiple high-acuity comorbidities. The groups said current “dual-rate” criteria exclude these patients, who require long-term hospitalization and account for a majority of discharges.
- Raising reimbursement for beneficiaries who are transferred from certain rural facilities, including critical access hospitals, to long-term care hospitals.
- Revising diagnosis-related groups and inflation forecasts, which the organizations called “outdated,” to more accurately reflect the cost of treating high-acuity cases.
- Altering the 25-day average length of stay requirement created in 1983. The stipulation was designed to distinguish the difference between long-term care and acute care hospitals, the groups said, adding that reassessing this requirement could allow for more efficient discharges.
- Reforming Medicare Advantage plans, which often exclude long-term care hospitals from provider networks and “drastically limit admissions through inappropriate prior authorization practices,” according to the hospital organizations.
- Increasing reimbursement for outlier cases, or those that exceed a certain threshold known as the fixed-loss amount.
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