ACA Now

Implementation Status

These statutory provisions were allowed to lapse, though CMS extended the delay of implementation of the 25% Rule through FY13 in the Inpatient Hospital/LTCH Final Rule for that year.

On April 26, 2013, CMS issued a proposed rule updating FY 2014 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCHs).  Both the Medicare Inpatient Prospective Payment System (IPPS) and LTCH proposals, following CMS’ consideration of public comments and upon finalization, take effect October 1, 2013.  Under the proposed rules, CMS estimates that gross hospital payments will be $27 million higher in FY14 than they were in FY15 (which reflects the ACA Medicare DSH cuts, which are expected to result in a -0.9% cut to hospital payments).  Gross LTCH payments under the proposed rule will increase by 1.1% or $62 million, with the proposed implementation of the 25% Rule costing the sector $190 million.  CMS fact sheets on the rule are available here and here. Comments on the proposal are due by June 25, 2013.

On August 2, 2013, CMS issued its FY 2014 Medicare Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS final rule under which gross hospital payments will be $1.2 billion higher in FY 2014 than they were in FY 2013 – much higher than the $27 million increase initially proposed.  The final rule addresses a number of IPPS and LTCH payment and quality-related provisions authorized or amended by the ACA.

P.L. 113-93, the Protecting Access to Medicare Act of 2014 (i.e., the “doc fix”), which was signed into law on April 1, contains a provision at section 112 of the law that makes technical changes to the LTCH site neutral payment policy.

On May 1, CMS issued a proposed rule updating FY 2015 Medicare payment policies and rates for inpatient stays at general acute care and LTCHs. Under the proposed rule, hospitals that participate in the Hospital Inpatient Quality Reporting (IQR) Program and are ‘meaningful users’ of EHRs would receive a 1.3% payment update. However, the 1.3% rate increase, when coupled with the payment policy reductions – including those under the Hospital Readmissions Reduction Program, the Hospital Acquired Condition (HAC) Reduction Program, Medicare DSH changes as well as “the expiration of certain statutory provisions that provided special temporary increases in payments to hospitals and other proposed changes” – would ultimately decrease IPPS operating payments by approximately 0.8% or $241 million over FY 2015 payment levels. Also of note, gross LTCH payments under the proposed rule would increase by 0.8% or $44 million over FY 2014 payments, with a delay (pursuant to the statutory mandate) in the full application of the 25% Rule patient threshold, among other key LTCH policy changes denoted further below. Comments are due by June 30, 2014. CMS fact sheets are available here and here. A CMS press release is available here.

On August 4, CMS issued a final rule updating FY 2015 Medicare payment policies and rates for inpatient stays at general acute care and LTCHs. The final rule also codifies “two interim final rules with comment period relating to criteria for disproportionate share hospital [DSH] uncompensated care payments and extensions of temporary changes to the payment adjustment for low-volume hospitals and of the Medicare-Dependent, Small Rural Hospital (MDH) Program.”

Under the final rule, hospitals that participate in the Hospital Inpatient Quality Reporting Program and are ‘meaningful users’ of EHRs would receive a 1.4% payment update – up slightly from the agency’s 1.3% proposed increased. However, the 1.4% rate increase, when coupled with payment policy reductions enumerated further below – including reductions under the Hospital Readmissions Reduction Program, changes to Medicare DSH payments, and so forth – are projected to decrease IPPS operating payments by approximately 0.6%” (compared to the net decrease of 0.8% under the proposed rule) – or by roughly $756 million in FY 2015.

CMS also finalized its proposal to continue its slow phase-in of the ATRA’s coding intensity adjustment, leaving ~$8 billion to be recouped in FYs ‘15 and ‘16.

Gross LTCH payments under the final rule would increase by 1.1%  – up from the 0.8% CMS put forward in its proposed rule, with a delay (pursuant to the statutory mandate) in the full application of the 25% Rule patient threshold, among other key LTCH policy changes denoted further below.

CMS fact sheets are available here and here.  An agency press release is available here.

On October 10, CMS issued a letter to state survey agency directors delineating guidance on the implementation of the new moratorium on the establishment of new LTCHs or new LTCH satellites or increases in LTCH beds.

On Apr. 17, 2015 as part of a proposed rule updating FY 2016 Medicare payment policies and rates for inpatient stays at general acute care and LTCHs, CMS proposed “technical clarifications relating to our implementation of the new statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities.”

On June 2, the House Ways and Means Committee advanced H.R. 2580, the LTCH Technical Correction Act of 2015 at a Committee markup (House Report).

– On July 31, CMS released the FY 16 inpatient prospective payment system (IPPS) and long-term care hospital PPS and policy final rule affecting discharges beginning on Oct. 1, 2015. The rule also includes an embedded interim final rule with comment period effectuating the statutory extension of the Medicare-dependent, small rural hospital Program and changes to the low-volume payment adjustment. The rule addressed this provision of the ACA.