FAQ

501114-19med1This page provides answers to the most commonly asked questions about LTACHs.  The Centers for Medicare and Medicaid Services website also has a useful webpage that provides many answers to common questions.  Please contact me if you have a question that is not answered below, if you would like more information about a topic, or if you would like to suggest FAQs for the weblog.


General Questions and Answers


Questions and Answers for Patients


Questions and Answers for Businesses



A long term acute care hospital (LTACH) provides acute care services to medically complex patients requiring longer-term hospitalization. LTACH facilities are required to have a patient average length of stay of greater than 25 days.  The Medicare, Medicaid and SCHIP Extension Act of 2007 also changed the LTACH definition, so that LTACHs are now also required to meet the following criteria:

  • LTACHs must have a patient review process that screens patients both before admission and regularly throughout their stay to ensure appropriateness of admission and continued stay.  The MMSEA does not, however, specify the admission and continued stay criteria to be used;
  • LTACHs must have active physician involvement with patients during their treatment, with physician on-site availability on a daily basis to review patient progress and consulting physicians on call; and
  • LTACHs must have interdisciplinary teams of health care professionals, including physicians, to prepare and carry out individualized treatment plans for each patient.

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LTACHs are certified by Medicare as “long-term care hospitals” and are licensed by state regulators either as acute care or specialty hospitals. Most LTACHs are also accredited by The Joint Commission.  LTACHs are also required to meet Federal conditions of participation applicable to acute care hospitals.

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LTACHs treat difficult to wean ventilator-dependent patients, patients requiring special monitoring, I.V. therapy, dialysis and nutritional support. Patients generally suffer from “medically complex” conditions and multiple concurrent illnesses, including pulmonary disease, cardiac disease, respiratory failure, pressure wounds, neuromuscular diseases, gastrointestinal diseases, post-operative complications and end stage renal disease requiring dialysis.

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As of November 2010 there were 434 LTACHs in the United States.

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A freestanding LTACH is defined as a hospital that: has a Medicare provider agreement; has an average length of stay of greater than 25 days; does not occupy space in a building used by another hospital; does not occupy space in one or more separate or entire buildings located on the same campus as buildings used by another hospital; and is not part of a hospital that provides inpatient services in a building also used by another hospital.

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Satellite facilities are part of a hospital that provides inpatient services in a building also used by another hospital, or in one or more entire buildings located on the same campus as buildings used by another hospital. Satellite LTACH facilities share a Medicare Provider Number with their parent hospital and are serviced by the same fiscal intermediary as the hospital of which it is a part. However, satellite facilities must maintain separate admission and discharge records, cost controls and accounting systems.

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An HwH is an LTACH hospital occupying part of a building also used by another “host” acute care hospital. There are approximately 80 HwHs in the country. HwHs are generally smaller than freestanding LTACHs, averaging only 36 inpatient beds. The HwH must operate for a minimum of six months under the Acute Care Prospective Payment System to establish its average length of stay at greater than 25 days before it can be certified as a long term care hospital for Medicare payment under the LTACH-PPS.

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The HwH generally leases space from the host hospital and purchases ancillary services from the host. The host hospital and HwH are separately licensed, Medicare certified, and Joint Commission accredited. The host hospital and HwH have separate governing bodies, administrators, medical directors and medical staffs.

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The HwH permits the host hospital to manage the length of stay of its patients, opens ICU and telemetry beds sooner, provides lease revenue from unused beds, provides revenue from purchased ancillary services, offers physicians expanded daily practice area and attracts new physicians to the host hospital.

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LTACHs provide a wide variety of interdisciplinary patient care services, including daily physician visits, nursing, respiratory therapy, physical, occupational and speech-language therapy, nutritional therapy, case management and social services, laboratory, radiology and pharmacy services, telemetry, dialysis, pain management, family interventions and end of life care. Some specialty LTACHs also may provide cancer care, care for psychological disorders or care for Alzheimer’s Disease.

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A patient’s physician generally orders an assessment to determine if a patient is an appropriate candidate for admission to a LTACH. The LTACH’s admission coordinator is then contacted to schedule a patient evaluation. A patient’s needs and medical status are then also usually evaluated by a licensed nurse, and may also be reviewed by a physician, to determine admission appropriateness. LTACHs most often admit patients from a short-term acute care hospital’s Intensive or Critical Care Unit, but also may be admitted from home, a nursing home, skilled nursing facility or inpatient rehabilitation facility if they meet admissions criteria.

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The Centers for Medicare and Medicaid Services maintains a comprehensive list of all LTACHS on its website. The list provides information on each LTACH’s provider number, name, address, and Medicare participation date.

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It depends on each hospital, but usually not. They often provide only “stand-by emergency services” staffed by a nurse, with a physician on call. The emergency care is like walk-in care clinics, dealing with minor injuries and sprains, small cuts, flu and colds, etc. Ambulance service is usually not offered at LTACHs. Most patients admitted to an LTACH enter through an LTACH’s ICU or high observation area.

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Again, it depends on the individual LTACH, but many offer a full complement of clinics, lab services, pharmacies, scanning and imaging, and other outpatient services.

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LTACHs generally accept Medicare, Medicaid and various forms of commercial insurance including HMOs, PPOs and indemnity plans.  Over 70% of LTACH payments come from Medicare.

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Unlike LTACHs, skilled nursing facilities do not usually provide ventilation management services and ventilator weaning. Patients are typically admitted to SNFs after a fall, broken hip or minor stroke, whereas patients admitted to LTACHs are typically bed-bound and admitted for complex respiratory disease, complicated wound care, and multi-system organ failure. Patients in SNFs generally receive weekly or monthly physician assessments, whereas physician assessments are provided daily in LTACHs.

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Patients are typically admitted to an IRF after knee, hip or back surgery. These patients spend 3 or more hours per day undergoing rehabilitation care, whereas most LTACH patients are not yet able to tolerate, and do not undergo, three hours of rehabilitation per day. Care in IRFs is directed by a physician specializing in physical and rehabilitation medicine, whereas care provided in LTACHs is directed by an interdisciplinary team involving multiple medical subspecialties. Unlike LTACHs, IRFs are not licensed as acute care hospitals.

Here is a table to assist readers in determining the general differences among the various acute and post acute care settings:

Type of Facility General Hospital LTACH SNF IRF Nursing Home
Focus Acute Acute and/or Therapy Sub-acute Therapy-Driven Custodial Care
Patient Needs Short-term, High Acuity Acute (medical and/or functional) Lower Level Care Functional Custodial Care
Levels of Care Acute, ER, Intensive Care Unit (ICU), Rehab, Skilled Nursing Facility (SNF) (all short-stay driven) Acute (complex medical and/or medical rehab, providing less than 3 hours of therapy per day) Sub-acute Therapy (3 hours per day) Custodial Care
Access to on-site support services Yes Yes Yes, if in acute care hospital. Yes, if in acute care hospital. If freestanding, possible. No
24-Hour physician coverage Yes Yes Yes, if in acute care hospital. Yes No
Broad range of physicians & specialists Yes Yes Yes, if in acute care hospital. Yes, if in acute care hospital. If freestanding, possible. No

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The largest providers of LTACH services in the U.S. are, as of Novenber 2009 (by number of owned and managed facilities):

  • Select Medical Corporation (111);
  • Kindred (83);
  • RehabCare Group (30);
  • LifeCare (20);
  • Cornerstone (18);
  • Promise Healthcare (14);
  • Vibra Healthcare (12);
  • HealthSouth (6); and
  • Ernest Health (6).

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Yes, Medicare margins averaged 12.8% in 2004 and facilities with larger percentages of self-pay and privately insured patients enjoy substantially higher margins.

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The Medicare, Medicaid and State Children’s Health Insurance Program Extension Act of 2007 (MMSEA) provides for a 3-year moratorium (beginning December 27, 2007) on the establishment of new LTACHs, LTACH satellites, and increase in the number of LTACH beds (with certain exceptions) to curb the rate of growth of these facilities and Medicare expenses associated with these facilities. Growth potential beyond the moratorium remains uncertain.

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I don’t think so. There are a numbers of LTACHs providing jobs and healthcare services to some of the nation’s most medically needy and complex patients in congressional districts throughout the country. It would be a political and logistical nightmare for Congress to try to turn back the hands of time by attempting to close the doors to nation’s existing LTACHs. The big question remains, however, regarding how to differentiate the services provided in LTACHs from those services provided in the telemetry step down units of short-term acute care hospitals, and how to justify the differences in Medicare reimbursement for such services.

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No, acute care patients admitted to an LTACH as a result of the evacuation from the acute care hospital will be treated separately and will not be included in the calculation of the LTACH’s average length of stay. The LTACH should document that the admission was related to evacuation of an acute care hospital, and which acute care hospital the patient was evacuated from.

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Beginning in 2008 CMS adopted a new patient classification system has under the LTACH PPS. It is the same as the one adopted under the Inpatient Prospective Payment System (IPPS) (i.e., Medicare Severity diagnosis-related groups (MS-DRGs), but under LTACH, the DRGs are referred to as “MS-LTC-DRGs”. The LTACH PRICER has been updated with the MS-LTC-DRG table and weights.

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For the Long Term Care Hospital Prospective Payment System Rate Year 2008, the standard Federal rate is $38,356.45.

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For the LTCH PPS 2009 RY, the standard federal rate is $39,114.36. Please click here for additional information.

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LTACHs are paid adjusted PPS rates for patients who have short stays. Short-stay outliers (SSOs) are cases with a length of stay up to and including 5/6 of the geometric average length of stay for the MS–LTC–DRG. For SSOs, LTACHs are paid the least of:

  • 100 percent of the cost of the case;
  • 120 percent of the MS–LTC–DRG specific per diem amount multiplied by the length of stay for that case;
    the full MS–LTC–DRG payment; or
  • an amount that is a blend of the inpatient PPS amount for the MS–DRG and 120% of the LTACH per-diem payment amount.

As the length of stay for the SSO increases, the portion of payment attributable to the LTACH per-diem increases.

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LTACHs are paid outlier payments for patients who are extraordinarily costly. High-cost outlier cases are identified by comparing their costs to a threshold that is the MS–LTC–DRG payment for the case plus a fixed loss amount. In 2009 the fixed loss amount is $22,960. Medicare pays 80% of the LTACH’s costs above the threshold. High-cost outlier payments are funded by reducing the base payment amount for all LTACHs by 8%.

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LTACHs receive one payment for “interrupted-stay” patients. An interrupted stay occurs when an LTACH patient is discharged to an inpatient acute care hospital, an inpatient rehabilitation facility (IRF), or a skilled nursing facility (SNF), stays for a specified period, then goes back to the same LTACH. The specified period of time is 9 days for an acute care hospital, 27 days for an IRF, and 45 days for a SNF. Any LTACH discharge readmitted within 3 days is also considered an interrupted stay.

LTACHs that are co-located with other Medicare providers are subject to the interrupted-stay policy unless their readmissions exceed 5% of the LTACH’s total discharges. If this limit is exceeded, the LTACH receives only one payment for each interrupted-stay patient regardless of the amount of time spent at the intervening facility. (A separate 5% threshold applies to cases transferred to co-located SNFs, IRFs, and psychiatric facilities).

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The 25% Rule reduces payments for LTACHs that exceed established percentage thresholds for patients admitted from certain referring hospitals. The rule is intended to help ensure that LTACHs do not function as units of acute care hospitals and that decisions about admission, treatment, and discharge in both acute care hospitals and LTACHs are made for clinical rather than financial reasons.

When first implemented, the 25% Rule applied only to LTACH hospitals within hospitals (HWHs) and satellite facilities, limiting the proportion of Medicare patients who could be admitted from a HWH’s or satellite’s host hospital during a cost reporting period. The policy was phased in over three years, with the threshold for most HWHs and satellites set at 75% for fiscal year 2006, 50% for fiscal year 2007, and 25% for fiscal year 2008 and beyond. (Less stringent thresholds are applied to HWHs and satellites in rural areas or in urban areas where they are the sole LTACH or where there is a dominant acute care hospital). After the threshold is reached, the LTACH is paid the lesser of (i) the LTACH PPS rate or (ii) an amount equivalent to the acute care hospital PPS rate for patients discharged from the host acute care hospital. Patients from the host hospital who are outliers under the acute hospital PPS before their transfer to the HWH do not count toward the threshold and continue to be paid at the LTCH PPS rate even if the threshold has been reached.

Beginning in July 2007, CMS extended the 25% Rule to apply to all freestanding LTACHs, limiting the proportion of patients who can be admitted to an LTACH from any one acute care hospital during a cost reporting period. The extended policy was to be phased in over three years, with the applicable threshold for non-HWHs and nonsatellites set at 75% for rate year 2008. The MMSEA substantially changed the 25% rule by rolling back the phased-in implementation of the 25% Rule for HWHs and satellites and preventing application of the rule to freestanding LTACHs for three years.

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