Medicare carve-out lets hospitals dodge cost controls for sicker patients
H.R. 1924 — Securing Access to Care for Seniors in Critical Condition Act of 2025 · Filed by Kevin Hern (R-OK) · 8 cosponsors · Introduced Mar 6, 2025 · Referred to committee
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What it does
This bill creates a new exemption from Medicare's site-neutral payment rules for long-term care hospitals (LTCHs). Starting October 1, 2026, LTCHs treating patients assigned to high-acuity diagnosis codes (those with a Medicare severity weight of 0.8 or higher) will be paid under the traditional LTCH payment system rather than the lower site-neutral rate. This exemption benefits LTCHs by allowing them to receive higher reimbursement for treating sicker patients, potentially improving their financial viability.
Why we flagged it
The bill creates a narrow exemption from Medicare's cost-control mechanism (site-neutral payments) for a specific provider type (LTCHs) treating a specific patient acuity level. This is a targeted payment increase for a healthcare sector, not a broad public-health or patient-protection measure.
What the text implies
- The exemption applies only to discharges with MS-LTC-DRG weight ≥0.8, creating a financial incentive for LTCHs to admit and code for the highest-acuity patients, potentially affecting patient selection and coding practices.
- Site-neutral payment rules were designed to reduce Medicare spending by paying LTCHs at rates closer to acute-care hospitals. This exemption partially reverses that cost control, increasing federal spending without identified offsets.
The full analysis lists 4 implications of this text.
Who stands to gain
long-term care hospitals (LTCHs); LTCH operators and owners; healthcare providers specializing in post-acute care