CMS releases FY 2026 proposed rule for long-term care hospitals

The Centers for Medicare & Medicaid Services April 11 proposed increasing the long-term care hospital standard rate payments by 2.2% in fiscal year 2026 relative to FY 2025. This includes a 3.4% market basket update reduced by a 0.8 percentage point productivity adjustment. In addition, it includes a reduction of 0.3 percentage points due to CMS’ proposal to raise the fixed-loss amount for high-cost outlier payments to $91,247. The agency also has included in the rule its previously published request for information seeking input on opportunities to streamline regulations and reduce burdens on providers.

The AHA remains very concerned about the further proposed increase to the outlier threshold and the small proposed payment increase. In a statement shared with the media today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is concerned that the proposed payment updates for long-term care hospitals (LTCHs) would lead to continued strain on these providers as they care for some of Medicare’s sickest patients. In recent years, the outlier threshold has skyrocketed, forcing LTCHs to absorb tens of thousands of additional dollars in losses before Medicare will help cover some costs of extremely ill beneficiaries. CMS’ proposal this year to increase this threshold even more — by an additional $14,199 — coupled with its minimal proposed market basket update, would make it increasingly difficult for LTCHs to care for these patients and alleviate pressure on their acute-care hospital partners. The AHA looks forward to working with CMS to ensure continued access for these patients.”

For the LTCH Quality Reporting Program, CMS proposes to remove four patient assessment data elements and modify the COVID-19 vaccine among patients and residents measure. CMS also asks for input on future LTCH QRP measure concepts, changing deadlines for reporting patient assessment data and advancing digital quality measures in the LTCH QRP.

CMS will accept comments on the proposed rule through June 10. AHA members will receive a Regulatory Advisory with additional information.