Medicare will pay LTC hospitals 3.1% more in 2005

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Medicare payment rates for long-term care hospitals will increase 3.1% for fiscal year 2005, higher than the 2.9% proposed hike, according the Centers for Medicare & Medicaid Services. This is amidst questions in Congress whether LTC beds are merely cash cows, rather than adding value to care.

CMS said the higher increase to LTC hospitals was decided upon because more facilities than anticipated (93% instead of the expected 70%) switched to the PPS immediately instead of opting for a transition period.

Rep. Pete Stark (D-CA) sponsored a bill in March that would place a moratorium on new long-term care hospital beds. Less than two weeks ago, MedPAC did not recommend to Congress a moratorium on payment to long-term care hospitals within existing acute-care facilities, calling such a move premature. But the commission unanimously agreed that long-term care hospitals need to distinguish themselves from skilled nursing facilities to justify higher payments.

The final rule, effective July 1, can be found at www.cms.hhs.gov/providers/longterm/frnotices.asp.