Long-term, acute care hospitals may feel CMS' sting

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Possibly in response to calls for greater scrutiny of such facilities, the Centers for Medicare & Medicaid Services has proposed regulations that would make it much harder to qualify as a long-term, acute-care hospital in 2005.

As a result, such facilities could be facing less in the way of Medicare reimbursements. Currently, they receive significantly higher pay than general hospitals.
 
Under the new proposal, the Medicare program would require that long-term, acute-care facilities operating within another hospital have separate owners. They also would be allowed to have no more than one-fourth of their admissions from the main hospital.
 
A Jeffries & Co. analysis called the CMS proposal "a major surprise to the industry and Wall Street." The plan sent companies scurrying to calculate how they would fare under the 25% cap in particular. CMS will accept comments on its proposed regulation until July 12.
 
The Medicare Payment Advisory Commission recently urged officials to better define such complex-care hospitals and some lawmakers raised questions about motives for the increase in the number of facilities, which tripled, to more than 300, from 1993 to 2003.
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