CMS Announces Final Rule On Long-Term Care Hospital Payments; Industry Group Analyzes Proposed Payment Cuts For Home Health Agencies

CMS will increase Medicare payments to long-term care hospitals by 0.71% in "rate year" 2008, the agency announced Tuesday, CQ HealthBeat reports. To determine the increase in payments for long-term care hospitals, CMS said it used a method known as a "market basket," which tracks annual changes in the cost of medical supplies and services provided by the facilities. These calculations indicated that hospitals would be entitled to a 3.2% payment increase in rate year 2008, but the agency lowered the amount of the increase by 2.49% to account for changes in the way hospitals bill for services. CMS suggested that hospitals bill the agency at rates higher than the costs of treatment justify, CQ HealthBeat reports.

The rule also revises Medicare's payment policies for graduate medical education at teaching hospitals when residents are being trained outside of the hospital. In addition, CMS proposed increasing rates to nursing facilities by 3.3%, or $690 million, in 2008 (Reichard, CQ HealthBeat, 5/1). Analysis of Home Health Agencies Payment Proposal
A series of changes CMS proposed last week to Medicare payments for home health agencies would lead to payment cuts totaling more than $7 billion by 2012, according to an analysis by the National Association for Home Care & Hospice, CQ HealthBeat reports. CMS on Friday proposed increasing payments by 2.9% for home health agencies that report quality-of-care data and by 0.9% for those who did not provide quality data. CMS also proposed reducing the national standardized 60-day episode payment rate by 2.75% each year for three years beginning in 2008, and tailoring payments for "non-routine" medical supplies to better reflect the actual cost to home health agencies.

Connecting Tags; Medicaid, Medicare, LTC, community-based, fan-the-flame, copower, prosynergy