NRS 440VN How a Bill Becomes a Law

Andrew Slavitt

Acting Administrator

Centers for Medicare & Medicaid Services

Hubert H. Humphrey Building

200 Independence Avenue, S.W., Room 445-G

Washington, DC 20201

RE: Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care

Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Laws

Changes and Fiscal Year 2017 Rates; Quality Reporting Requirements for Specific Providers;

Graduate Medical Education; Hospital Notification Procedures Applicable to Beneficiaries Receiving Observation Services; and Technical Changes Relating to Costs to Organizations and Medicare Cost

Dear Mr. Slavitt:

I am submitting these comments on the notice of proposed rulemaking published on April 27, 2016 at 81 Fed Reg 24945 et seq regarding the LTCH level of care proposed changes. 

I work in a Long Term Acute Care Hospital which provides specialized programs of care to chronically and critically ill and medically complex patients who are Medicare beneficiaries. I am appreciative of the opportunity to provide comments on these proposed laws. 

Proposed Modifications to the “25-Percent Threshold Policy” Payment Adjustments (N 412.534 and 412.536)

For FY 2017, CMS is proposing to fully implement the 25% threshold policy for all LTCH cases, including site-neutral cases and those meeting the new LTCH criteria. The 25% threshold policy would apply to all LTCHs except for grandfathered LTCH hospital-within-hospitals, which were exempt from the policy by the Pathway for SGR Reform Act of 2013, and those classified as an LTCH under subclause (Il) of section 1886(d) (1) (B) (iv) of the Social Security Act.

CMS is proposing to sunset both 412.534 and 412.536 and adopt a unified 25% threshold policy that would apply to payments for discharges occurring on or after October 1, 2017. Consistent with its current policy, CMS is proposing to exclude cases that are high-cost outliers (HCOs) in the referring hospital immediately prior to LTCH admission from the count of admission from a single referral source (numerator) but include these cases in counts of total Medicare discharges (denominator). Medicare Advantage discharges would not be considered under the 25% threshold policy under CMS’s proposal. Finally, CMS proposes to continue to make adjustments to the threshold for rural LTCHs and LTCHs in metropolitan statistical areas (MSAs) with a MSA-dominant hospital.

CMS is proposing to make modification to the 25% threshold policy in calculating the numerator and denominator for the “applicable percentage threshold.” Specifically, CMS would use the CMS Certification Number on hospital claims submitted to Medicare to determine admissions from a referral source (numerator) and total Medicare discharges for the LTCH (denominator).

CMS defines an MSA-dominant hospital as a hospital that has discharged more than 25 percent of all Medicare discharges in the MSA in which it is located. If an LTCH is located in an MSA with an MSA-dominant hospital, the LTCH’s applicable percentage threshold would be set at the percentage of total Medicare hospital discharges in the MSA from the MSA-dominant hospital during the LTCH’s applicable cost reporting period. This elevated threshold associated with MSA-dominant hospitals is capped at 50%.

The new criteria impose restrictions on which patients LTCHs can take and remain financially viable. For site-neutral cases, once the criteria are fully implemented, an LTCH will receive 94.9% of the lower of an inpatient prospective payment system (IPPS) comparable amount or costs. Thus, at best, an LTCH would experience a loss of 5.1% on its site-neutral cases

(assuming CMS continues to implement the budget neutrality adjustment to pay for outliers for site-neutral cases). With or without the budget neutrality adjustment, there are strong incentives in the new LTCH criteria to admit cases that meet the new criteria to stay financially viable and serve the needs of their communities. LTCHs in markets with MSA-dominant hospitals where the dominant hospital accounts for more than 50% of Medicare FFS discharges are at a significant disadvantage, because a large portion (if not all) of the qualifying cases within the market cannot be admitted without triggering penalties from the 25% threshold policy.

The current policy can only negatively impact access to LTCHs for the very ill patients who can benefit from the types of programs offered in LTCHs. A recent study published in Medical Care l , a respected peer-reviewed journal, found beneficial impacts of receiving care in an LTCH in terms of mortality and Medicare payments for patients with multiple organ failure or who met the new criteria (spent 3 or more days in an ICU).

Comment: We urge CMS to raise the cap on the threshold from 50% to at least 75% for LTCHs in markets with an MSA-dominant hospital and use 75% as the applicable threshold for rural LTCHs. We believe that increasing the applicable threshold cap to 75% for LTCHs in MSA-dominant areas and applying an applicable threshold of 75% for rural LTCHs strikes this balance.

When assessing whether a hospital violates the 25% threshold policy, CMS is proposing to exclude cases that are HCOs in the referring acute care hospital from the count of LTCH admissions from that referral source but include these cases in the count of total Medicare discharges from the LTCH. This exclusion has been in place since CMS first established the 25% threshold policy. CMS’s rationale for excluding HCO cases from being subject to the 25% threshold payment adjustment is that a “. . .case which reaches high-cost outlier status has received a full complement of services and, therefore, any transfer from a hospital to an LTCH

cannot be said to be premature or inappropriate” 81 Fed. Reg. 25171 (April 27, 2016). CMS, thus, presumes that cases that are not HCOs (and that are from an acute care hospital that accounts for more than 25% of an LTCH’s admissions) did not receive a full complement of services at the acute care hospital and, therefore, may be premature or inappropriate.

Comment: We urge CMS to exclude chronically critically ill (CCI) Medicare beneficiaries from the numerator in assessing whether an LTCH violates the 25% threshold policy. CCI patients have been recognized by MedPAC, CMS, and others as appropriate cases for receiving care in an LTCH.

The preamble of the proposed rule states that the start date of the proposed modifications to the 25% threshold policy “. . .would apply to payments for discharges occurring on or after October l , 2017.” 81 Fed. Reg. 25170 (April 27, 2016).

Comment: To be consistent with legislation regarding relief from the 25% threshold policy, CMS should implement the 25% threshold policy starting with discharges in cost reporting periods on or after October 1, 2016.

Proposed 5.1% budget neutrality to pay for site neutral cases

In their FY 2017 Final Rule, CMS set the HCO threshold for site neutral cases equal to the HCO threshold applicable to cases paid under the IPPS. CMS’ Office of the Actuary has projected that site neutral cases discharged from LTCHs will resemble IPPS cases in terms of costs and length of stay. CMS concludes that an IPPS HCO threshold for site neutral cases will likely result in the outlier portion of total payments for site neutral cases being similar to the outlier portion of total payments for IPPS cases. In the IPPS, outlier payments represent 5.1% of total payments.

Comment: We strongly encourage CMS to eliminate the budget neutrality adjustment currently being applied to site neutral cases. We believe that failing to do so runs counter to the intent of the Pathway legislation, reduces efficiency and quality of care, and undermines CMS’ own described policy goals. However, if CMS chooses to maintain the budget neutrality adjustment, they should exempt site neutral cases who are paid their cost. Paying cases 94.9 percent of the estimated cost for the services involved is an unambiguous violation of the statute, which requires such cases to be paid “100 percent of the estimated cost for the services involved.”

Proposal to Address the IMPACT Act Domain of Resource Use and Other Measures: Discharge to Community

CMS is proposing to adopt the measure, Discharge to Community, to satisfy the cross-setting quality measure for resource use and other measures domain required by the Improving

Medicare Post-Acute Care Transformation Act. Like short-term care hospitals (STCHs), LTCHs treat patients requiring critical, acute, or sub-acute levels of care and discharge patients that no longer require such high levels of care. As acute care hospitals, an LTCH’s goal is to discharge patients to the appropriate care setting when they no longer need treatment at the acute care level; the goal is not to keep the patient until they are ready to be discharged to the community.

As a result, the discharge to community measure as currently constructed is not an appropriate measure of quality for the LTCH setting.

After successful LTCH and STCH care, some patients are discharged to lower levels of care such as inpatient rehabilitation facilities and skilled nursing facilities. The discharge to community measure would wrongly treat discharges to lower, non-acute care settings as unfavorable outcomes although these discharges are favorable outcomes from the perspective of patients and LTCHs.

Comment: We urge CMS to consider the role of LTCHs as acute care hospitals and exclude discharges to lower acuity settings in calculating the discharge to community measure. Otherwise, the measure would encourage LTCHs to keep patients longer or discharge them to the community when those patients may be better suited for lower acuity settings.

We thank you for your attention to these comments regarding law changes. 

Sincerely,

Kimberley Denson RN, CCM

(281) 9063063

kncdenson@gmail.com