Reed Smith attorneys have prepared a Client Alert which provides a summary of the most significant proposed changes to the Medicare program’s long-term acute care hospital prospective payment system (“LTCH-PPS”) for fiscal year (“FY”) 2012. On Tuesday, April 19, 2011, the Centers for Medicare & Medicaid Services (“CMS”) released on its website an advance copy of the “Proposed Rule” revising the LTCH-PPS for fiscal year FY 2012, which applies to discharges occurring on or after October 1, 2011 through September 30, 2012. The official copy of the Proposed Rule will be published in the Federal Register in the coming days. Comments on the Proposed Rule must be submitted no later than 5 p.m. on June 20, 2011.

The Proposed Rule would implement several significant changes to CMS policy and adopt a quality reporting program as mandated by the Patient Protection and Affordable Care Act (“ACA”). In this Client Alert we summarize the following aspects of the Proposed Rule:

  • Changes to the payment rates and other payment rate policies for FY 2012;
  • Rebasing and revising the market basket for LTCHs;
  • Requiring budget neutrality in the area wage level adjustment;
  • New policies regarding the calculation of the average length of stay requirement for LTCHs;
  • Including Medicare Advantage days in the average length of stay calculation;
  • Extending the LTCH moratorium on new LTCH beds to LTCHs “under development” on December 29, 2007; and
  • Implementation of a quality data reporting program for LTCHs.

Click here to read the full Alert (PDF).