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The American Hospital Association is throwing its support behind a house bill that seeks to revise reimbursement rates for long-term care hospitals.
In a letter to Reps. Kevin Hern, R-Okla., and Brendan Boyle, D-Pa., the hospital group said long-term care hospitals (LTCHs) are critical partners for acute care hospitals in particular, as they alleviate capacity for overburdened intensive care units and other components of the care continuum.
The bill, the Securing Access to Care for Seniors in Critical Condition Act, was introduced in March and is awaiting further action.
WHAT’S THE IMPACT
According to the AHA, LTCHs play a unique role for Medicare and other beneficiaries by caring for the most severely ill and medically complex patients, who often require extended hospitalization and highly specialized care.
In referencing one of its own white papers, the AHA said that since implementing the dual-rate payment system in 2016, the volume of LTCH standard-rate cases has fallen by approximately 70% from its peak under the prior system, and the number of LTCH providers has decreased by 20%.
Concurrently, the average acuity of LTCH patients has risen by 20% or more in that same period, and these patients are increasingly consolidated into a limited number of Diagnosis-Related Groups (DRGs), the white paper said.
“The smaller yet sicker patient population and dwindling reimbursement have created many challenges for LTCHs, as evidenced by the closure of so many of these facilities,” the AHA wrote in the letter.
The remaining pool of patients, the group said, is more acute and more expensive to treat, resulting in cases increasingly qualifying for high-cost outlier (HCO) payments to compensate for the lack of precision in the DRGs, as so many cases are consolidated into a limited number of them.
“However, the fixed-loss amount for HCO cases has risen by more than 300% since 2016, forcing LTCHs to take on significant financial losses when caring for these particularly ill patients,” the AHA wrote.
THE LARGER TREND
Congress, beginning in 2016, put in place a dual-rate payment system under the long-term care hospital payment system. This change, along with other coinciding market factors, dramatically reshaped the landscape of both LTCHs and their beneficiaries in a positive way, the AHA said last year.
But the high-cost outlier (HCO) policy – which, under the prospective payment system, is intended to ensure these hospitals are adequately reimbursed for extremely costly care provided to the most severely ill beneficiaries – is largely unchanged.
The result, the AHA maintained, is an HCO policy that is now failing to achieve its stated purpose. Specifically, as the fixed-loss amount for HCO cases continues to rise, LTCHs are incurring greater and greater losses.
Jeff Lagasse is editor of Healthcare Finance News.
Email: [email protected]
Healthcare Finance News is a HIMSS Media publication.
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