Long-term care hospitals will see their overall payments increase by 1.3 percent or about $72 million in fiscal year 2014 under a final rule issued by CMS.
CMS expects rural long-term hospitals to experience lower payment increases than average because of decreases in their wage index for the next fiscal year. Additionally, the agency will begin implementing the 25-percent threshold rule on Oct. 1.
The 25-percent rule limits the proportion of patients a long-term care hospital admits from any single hospital during the long-term care facility's cost-reporting period. The rule applies to all long-term care hospitals, including those located within other acute care hospitals, those that are co-located with or on the campus of a host hospital and free-standing and grandfathered co-located long-term care hospitals. Hospitals that exceed that threshold may be subject to Medicare reimbursement reductions, and CMS estimates that the rule will lead to $90 million in payment reductions for long-term care hospitals, leading to a net decrease of about $18 million in 2014 compared to the current fiscal year.
The American Hospital Association released a statement opposing the 25-percent rule, saying that it "imposes a barrier by reducing payments based on the origin of the referral, with no regard for a patient's medical necessity for these services."
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