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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations
cases are projected to increase 0.9 percent, on average, for all LTCHs from FY 2021 to FY
2022 as a result of the payment rate and policy changes applicable to LTCH PPS
standard Federal payment rate cases presented in this final rule. This estimated 0.9 percent increase in LTCH PPS payments per discharge was determined by comparing estimated FY 2022 LTCH PPS payments using the payment rates and factors discussed in this final rule to estimated FY
2021 LTCH PPS payments for LTCH
discharges which will be LTCH PPS standard Federal payment rate cases if the dual rate LTCH PPS payment structure was or had been in effect at the time of the discharge as described in section I.J.3. of this Appendix.
As stated previously, we are updating the LTCH PPS standard Federal payment rate for FY 2022 by 1.9 percent. For LTCHs that fail to submit quality data under the requirements of the LTCH QRP, as required by section 1886m5C of the Act, a 2.0
percentage point reduction is applied to the annual update to the LTCH PPS standard Federal payment rate. Consistent with 412.523d4, we also are applying a budget neutrality factor for changes to the area wage level adjustment of 1.002848 discussed in section V.B.6. of the Addendum to this final rule, based on the best available data at this time, to ensure that any changes to the area wage level adjustment will not result in any change increase or decrease in estimated aggregate LTCH PPS standard Federal payment rate payments. As we also explained earlier in this section, for most categories of LTCHs as shown in Table IV, Column 6, the estimated payment increase due to the 1.9 percent annual update to the LTCH PPS standard Federal payment rate is projected to result in approximately a 1.8
percent increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases for all LTCHs from FY
2021 to FY 2022. We note our estimate of the changes in payments due to the update to the LTCH PPS standard Federal payment rate also includes estimated payments for shortstay outlier SSO cases, a portion of which are not affected by the annual update to the LTCH PPS standard Federal payment rate, as well as the reduction that is applied to the annual update for LTCHs that do not submit the required LTCH QRP.
1 Location Based on the most recent available data, the vast majority of LTCHs are located in urban areas. Only approximately 5 percent of the LTCHs are identified as being located in a rural area, and approximately 4 percent of all LTCH PPS standard Federal payment rate cases are expected to be treated in these rural hospitals. The impact analysis presented in Table IV shows that the overall average percent increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2021 to FY 2022
for all hospitals is 0.9 percent. The projected increase for urban hospitals is 0.9 percent for urban hospitals, while the projected increase for rural hospitals is 1.2 percent.
2 Participation Date LTCHs are grouped by participation date into four categories: 1 Before October 1983;

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2 between October 1983 and September 1993; 3 between October 1993 and September 2002; and 4 October 2002 and after. Based on the best available data, the categories of LTCHs with the largest expected percentage of LTCH PPS standard Federal payment rate cases approximately 41
percent and 43 percent, respectively are in LTCHs that began participating in the Medicare program between October 1993 and September 2002 and after October 2002.
These LTCHs are expected to both experience an increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2021 to FY 2022
of 0.9 percent. LTCHs that began participating in the Medicare program between October 1983 and September 1993
are also projected to experience an increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2021 to FY 2022 of 0.9
percent, as shown in Table IV.
Approximately 3 percent of LTCHs began participating in the Medicare program before October 1983, and these LTCHs are projected to experience an average percent increase of 0.5 percent in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2021 to FY 2022.
3 Ownership Control LTCHs are grouped into three categories based on ownership control type: Voluntary, proprietary, and government. Based on the best available data, approximately 17 percent of LTCHs are identified as voluntary Table IV. The majority approximately 81 percent of LTCHs are identified as proprietary, while government owned and operated LTCHs represent approximately 3 percent of LTCHs.
Based on ownership type, voluntary and proprietary LTCHs are each expected to experience an increase of 0.6 percent and 1.0
percent in payments to LTCH PPS standard Federal payment rate cases, respectively.
Government owned and operated LTCHs, meanwhile, are expected to experience a 1.1
percent increase in payments to LTCH PPS
standard Federal payment rate cases from FY
2021 to FY 2022.
4 Census Region Estimated payments per discharge for LTCH PPS standard Federal payment rate cases for FY 2022 are projected to increase across all census regions. LTCHs located in the Mountain region are projected to experience the largest increase at 1.5 percent.
The remaining regions are projected to experience an increase in payments in the range of 0.4 to 1.2 percent. These regional variations are primarily due to the changes to the area wage adjustment.
5 Bed Size LTCHs are grouped into six categories based on bed size: 024 beds; 2549 beds;
5074 beds; 75124 beds; 125199 beds; and greater than 200 beds. We project that LTCHs with 024 beds and 125199 beds will experience the lowest increase in payments for LTCH PPS standard Federal payment rate cases, 0.6 percent. LTCHs with 2549 beds and 75124 beds are projected to experience the largest increase in payments of 1.0
percent. LTCHs with 5074 beds and greater
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than 200 beds are projected to experience an increase in payments of 0.9 percent and 0.8
percent, respectively.
4. Effect on the Medicare Program As stated previously, we project that the provisions of this final rule will result in an increase in estimated aggregate LTCH PPS
payments to LTCH PPS standard Federal payment rate cases in FY 2022 relative to FY
2021 of approximately $31 million or approximately 0.9 percent for the 363
LTCHs in our database. Although, as stated previously, the hospital-level impacts do not include LTCH PPS site neutral payment rate cases, we estimate that the provisions of this final rule will result in an increase in estimated aggregate LTCH PPS payments to site neutral payment rate cases in FY 2022
relative to FY 2021 of approximately $11
million or approximately 3 percent for the 363 LTCHs in our database. As noted previously, we estimate payments to site neutral payment rate cases in FY 2022
represent approximately 10 percent of total estimated FY 2022 LTCH PPS payments.
Therefore, we project that the provisions of this final rule will result in an increase in estimated aggregate LTCH PPS payments for all LTCH cases in FY 2022 relative to FY
2021 of approximately $42 million or approximately 1.1 percent for the 363
LTCHs in our database.
5. Effect on Medicare Beneficiaries Under the LTCH PPS, hospitals receive payment based on the average resources consumed by patients for each diagnosis. We do not expect any changes in the quality of care or access to services for Medicare beneficiaries as a result of this final rule, but we continue to expect that paying prospectively for LTCH services will enhance the efficiency of the Medicare program. As discussed previously, we do not expect the continued implementation of the site neutral payment system to have a negative impact on access to or quality of care, as demonstrated in areas where there is little or no LTCH
presence, general short-term acute care hospitals are effectively providing treatment for the same types of patients that are treated in LTCHs.
K. Effects of Requirements for the Hospital Inpatient Quality Reporting IQR Program In section IX.C. of the preamble of this final rule, we discuss our current requirements and finalized proposals for hospitals to report quality data under the Hospital IQR Program in order to receive the full annual percentage increase for the FY
2023 payment determination and subsequent years.
In this final rule, we are finalizing: 1
Adopting the Maternal Morbidity structural measure beginning with a shortened reporting period from October 1 through December 31, 2021 affecting the FY 2023
payment determination, followed by annual reporting periods affecting the FY 2024
payment determination and subsequent years; 2 adopting the Hybrid HWM
measure beginning with a 1-year voluntary reporting period beginning July 1, 2022
through June 30, 2023, before requiring mandatory reporting of the measure for the
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