June 2, 2008
By Greg Etzel and Barry Alexander*
In follow-up to its recent May 1 Interim Final Rule with Comment implementing the Medicare, Medicaid, and SCHIP Extension Act of 2007 to the Long Term Care Hospital Prospective Payment System, on May 22, CMS issued an Interim Final Rule (IFR) affecting long term care hospitals (LTCH) (73 Fed. Reg. 29699). The May 22 IFR picks up where the prior interim rule left off with respect to incorporating changes mandated by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA). The IFR contains the following provisions:
- Modifications of payment adjustments to LTCHs and LTCH satellite discharges that exceed various percentage thresholds pursuant to Sections 114(c)(1) and (2) of MMSEA. MMSEA provided for a three-year prohibition on the payment adjustments at 42 C.F.R. § 412.536 for freestanding LTCHs and the adjustments at 412.534 and 412.536 for grandfathered LTCH HwHs. The IFR contains a matrix illustrating the impact of the MMSEA requirements based on the type of LTCH; and
- Regulations and interpretative guidelines clarifying which facilities or projects will be subject to the moratorium on new LTCHs, LTCH satellite facilities, and increase in beds and which facilities or projects will qualify for an exemption to the moratorium. In particular, CMS provides important and likely controversial clarification as to what projects will meet the 10%/$2.5M moratorium exception under the law.
The IFR provisions are being issued with an effective date retroactive to December 29, 2007, based on the Secretary's determination that "retroactive application of the provisions of this interim final rule with comment period is necessary to comply with the statute and that failure to apply the changes retroactively would be contrary to public interest." Comments may be submitted to CMS on or before 5:00 pm on July 21, 2008.
*We would like to thank Greg Etzel, Esquire (Baker & Hostetler LLP, Houston, TX) and Barry Alexander, Esquire (Nelson Mullins Riley & Scarborough LLP, Raleigh NC) for providing this email alert.