Healthcare Business News

Legislation would lift 25% rule

By Rich Daly
Posted: August 2, 2011 - 6:30 pm ET

New patient-safety legislation for long-term acute-care hospitals would eliminate the so-called 25% rule (PDF) on patient-admission referrals from host hospitals to LTACs.

The CMS rule, which was established in 2004 and expanded in 2007, limited patient-admission referrals from a host hospital to 25%. After that threshold, the CMS would reimburse for those patients under the standard prospective pricing, which is a lower payment. In 2007, the 25% rule also was applied to free-standing hospitals. The rule has drawn strong objections from LTACs, which credit it with severe economic harm to the industry.

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At least some hospital advocates praised the new bill, which was quietly introduced Tuesday by Sen. Pat Roberts (R-Kan.).

“Eliminating the 25% rule will ensure that patients are not prohibited arbitrarily from receiving needed care” in long-term-care hospitals, Richard Umbdenstock, president and CEO of the American Hospital Association (PDF), said in a news release. “This bill will replace blunt payment policies with comprehensive clinical criteria to ensure that LTCHs uniformly serve high-acuity patients. This will allow LTCHs to focus on their mission of caring for very sick patients who need intensive care for a long period of time.”

In addition, the legislation would create specific requirements for patient preadmission, admission, continued stay and discharge. The measure also would specify long-term-care hospitals' “core services” and patient-care requirements, such as physician availability, according to the legislation.

The measure would require that a minimum percentage of annual discharges fit at least one of the following categories: patients for at least 25 days; a short-term acute-care hospital outlier immediately prior to admission to the LTAC; an inpatient who received ventilator services in the LTAC; or a patient who has at least three major complications and co-morbidities. Failure to meet that standard would result in a probationary period, followed by rate cuts.

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