Reforming Medicare for Long-Term Care Hospitals: Key Initiatives and Impacts

Medicare beneficiaries requiring intensive and prolonged care are significantly impacted by evolving healthcare policies. Long-term care hospitals (LTCHs) deliver crucial services for these patients, facing complex medical challenges like multiple organ failures and ventilator dependency. However, operational hurdles have intensified under the dual-rate payment system introduced in 2016, often resulting in reimbursement deficiencies that fail to cover care costs adequately.

Amidst these challenges, Medicare expenditures for LTCH care have declined by approximately 45%, while over 25% of LTCH facilities have shuttered in the past decade. In response, the American Hospital Association (AHA) is collaborating with entities such as the Coalition of Long-Term Acute-Care Hospitals and the Federation of American Hospitals to advocate for reforms. These collective efforts aim to bolster LTCH support and ensure sustainability in patient care delivery.

The reform proposals emphasize restructuring financial and operational frameworks for LTCHs. Key initiatives include expanding payment criteria for high-acuity patients, enhancing the accuracy of the LTCH prospective payment system, and revisiting the 25-day average stay requirement. Additionally, they propose restructuring the outlier payment system, improving rural healthcare access, and tackling unfavorable practices in Medicare Advantage plans. By promoting these reforms, the AHA and its partners underscore the indispensable role LTCHs play in streamlining transitions from acute care and improving patient recovery, ultimately alleviating hospital capacity pressures and enhancing health outcomes.