Legislation Proposed to Extend Regulatory Relief and Development Moratorium for Long-Term Acute Care Hospitals

May 5, 2009

On April 27, 2009 Congressmen Earl Pomeroy (D-ND), John Larson (D-CT), Lloyd Doggett (D-TX), and John Yarmuth (D-KY) introduced H.R. 2124, also known as the Medicare Long-Term Care Hospital Improvement Act of 2009. The Bill, if enacted, would amend the the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) by extending its term for an additional two year period through December 28, 2012. The MMSEA provided long-term acute care hospitals (LTACHs) with important payment and regulatory relief from unfavorable patient transfer rules (e.g., the “25% Rule”). The MMSEA also established a temporary three-year moratorium on the development of new freestanding LTACHs, new satellite facilities, and bed increases from December 29, 2007 to December 28, 2010. The development moratorium would likewise be extended.

In addition to ensuring regulatory stability, extending the MMSEA would give both the Secretary of Health and Human Services, and a project co-sponsored by the Acute Long Term Hospital Association (ALTHA) and National Association of Long Term Hospitals (NALTH) additional time to develop facility and patient criteria for LTACHs.

The Bill’s extension of the MMSEA’s development moratorium would produce savings for the Medicare program, and an additional cost saving offset provision in the Bill would provide for annual budget neutrality between rate years 2011 and 2015. The budget neutrality offset amount, which would be limited annually to 1.5%, would be deducted from the annually adjusted Long-Term Care Hospital Prospective Payment System base rate.

The Bill is supported by ALTHA, the American Hospital Association, the Federation of American Hospitals and NALTH. Congressman Larson, one of the Bill’s sponsors, spoke in favor of the Bill at NALTH’s Annual Conference on April 30, 2009 and commented that the sponsors hoped to see it pass by the end of the summer. Sponsors and industry representatives expect a similar bill to be introduced in the Senate in May.

Please contact one of the authors below or a member of McGuireWoods’ Long-Term Care team for additional information.