Medicare will pay long-term acute-care hospitals $5.3 billion for rate year 2007 and keep payments per patient at $38,086, according to the CMS' final payment rule. Additionally, the CMS made considerable changes to its formula for calculating annual updates and its short-stay patient outliers. The rate year starts July 1, 2006 and ends June 30, 2007.
The final rule, released by the CMS late yesterday, adopts the rehabilitation, psychiatric and long-term care market basket, or RPL, as a replacement to the "excluded hospital with capital" market basket that it currently uses to calculate the annual updates. The move to the RPL market basket is expected to boost the labor share portion of the formula, which is used in the adjustment for area wages.
And in response to public comments, the CMS revised a main component of its short-stay outlier payment formula. Under the new rule, the part of the current payment formula based on costs is reduced, and a fourth component, which blends an amount comparable to the hospital inpatient prospective payment system payment and the LTC-DRG per diem payment, has been added. By providing the blended option, the final rule allows that as the patient's length of stay increases, their treatment is more reflective of the resources used in the applicable LTC-DRG.
Medicare will continue to reimburse hospitals for unusually high-cost cases, but raised its outlier fixed-loss amount to $14,887 rather than the current $10,501. The fixed-loss amount is the trigger for the high-cost outlier policy.
Further, the CMS said it would discontinue the surgical DRG exception to the three-day-or-less interrupted stay policy, where an LTCH patient is discharged to another level of care -- or to the patient's home -- and is readmitted to the LTCH hospital within three days.
Separately, the CMS issued a final rule for inpatient psychiatric facilities that provides a market basket update of 4.5% The new rule also adopts a revised method of determining inflation in the costs of goods and services provided in IPFs, adopts the Office of Management and Budget's geographic area definitions, which is used to determine the wage index adjustment, and increases the fixed-dollar loss threshold amount for outlier payments to $6,200 from $5,700. The CMS also said it would increase payments for electroconvulsive therapy. -- by Matthew DoBias