The Medicare Payment Advisory Commission decided to recommend Congress make a 2% payment hike for long-term care hospitals because there were concerns over whether the current payment rates are adequate.
If Congress followed the recommendation, which passed unanimously during the commission's January meeting on Thursday in Washington, it would increase the base payment rate by 2% compared to current levels in fiscal 2019.
Commission staff originally recommended during MedPAC's December meeting to keep payment rates the same. However, commission members at that meeting were concerned about declining financial margins for long-term care hospitals and called for the hike.
Long-term care hospitals can receive higher Medicare payments if a beneficiary spends three days or longer in an intensive care unit of a referring acute care hospital or received prolonged ventilation in the long-term care hospital. Cases that don't meet the criteria get a lower "site-neutral" rate, according to a report from commission staff.
The commission wants more time to explore the role of long-term care hospitals in Medicare.
A study from the National Bureau of Economic Research released in August 2018 found that getting rid of higher payments for the long-term care hospitals would save taxpayers $4.6 billion. The facilities don't reduce mortality or length of stay compared to skilled nursing facilities or home health providers, which both get reimbursed less than long-term care hospitals.