HomeLatest NewsFederal NewsFinal Rule Released for FY 2020 Long-term Acute-care Hospital Prospective Payment System

Final Rule Released for FY 2020 Long-term Acute-care Hospital Prospective Payment System

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for long-term acute-care hospitals (LTCHs) for fiscal year (FY) 2020, which begins Oct. 1, 2019. Highlights include:​


  • For the cases expected to be paid using the LTCH standard rate, the final rule includes a net 2.6% marketbasket increase after all adjustments.
  • For LTCH cases that are expected to be paid an LTCH site-neutral rate, payments are estimated to decrease by approximately 5.9%. Site-neutral payment rates are the lower of the inpatient PPS-comparable per diem amount, including any outlier payments, or 100% of the estimated cost of the case. For cost reporting periods beginning on or after Oct. 1, 2019, site-neutral cases will receive the full site-neutral rate, rather than the currently effective blended rate.
  • A significant cut in payment for LTCHs where fewer than 50% of their Medicare FFS cases are paid based on the standard LTCH PPS payment. Specifically, these LTCHs will have payments for all Medicare FFS cases in a subsequent cost reporting period reduced to an inpatient PPS-like amount. The rule includes a process to determine how providers can return to “50% Rule” compliance.​

Adoption of two new process measures for the FY 2022 LTCH quality reporting program:

  • The “Transfer of Health Information to the Provider – Post Acute Care” measure will assess whether a current reconciled medication list is given to the subsequent provider when a patient is discharged or transferred from an LTCH to another facility.
  • The “Transfer of Health Information to the Patient – Post Acute Care” will assess whether a current reconciled medication list is provided to the patient, family or caregiver when the patient is discharged from an LTCH to a private home.

In the coming weeks SDAHO will provide members with additional details of the final rule, including updated facility-specific impact analyses.


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