Nearly half of long-term care hospitals (LTCH) located with acute-care hospitals or other related facilities haven't reported their co-location to the federal government, leaving Medicare vulnerable to overpayment, finds a new study from the Office of the Inspector General.
The OIG looked at 211 co-located LTCHs and found 97 that had not reported their status as required to Medicare contractors, and 98 for which contractors had co-location information.
Although the study did not delve into why the information wasn't reported, it notes that the Centers for Medicare & Medicaid Services applies payment thresholds to co-located facilities to avoid Medicare overpayments.
One of the payment policies, the 25 percent threshold rule, limits the proportion of patients an LTCH can admit from its host hospital. It applies only to hospitals-within-hospitals and satellites, the memo notes.
Another policy limits payments for interrupted stays between co-located providers and from the long-term care hospital if the number of discharges and readmissions between co-located facilities exceeds 5 percent of the LTCH's total discharges during a set period.
OIG recommended CMS consider having claims-processing contractors educate LTCHs of the notification requirement to improve compliance. CMS or its contractors also could periodically survey the hospitals to identify co-locations or changes in location status, OIG said.
The office promised additional information and recommendations upon completing a separate ongoing study, "Medicare Payments for Interrupted Stays in Long-Term Care Hospitals."
Meanwhile, long-term care hospitals are part of a CMS test of bundled Medicare payments intended to improve coordination across different care settings. One of four bundled payment models pays post acute-care providers the savings if Medicare expenditures come in under a target figure. The provider pays Medicare the difference for costs that exceed targets.