Report Highlights Role of Pennsylvania Long Term Care Hospitals

Proposed change to Medicare payments threatens their sustainability

Harrisburg, PA (May 16, 2024) – A new report prepared by KNG Health Consulting LLC for The Hospital and Healthsystem Association of Pennsylvania (HAP) examines the role of Pennsylvania’s 12 long term care hospitals (LTCH) in the health care continuum and how proposed Medicare payment changes put the care they provide at risk.

LTCHs provide intensive care for patients who need longer hospitals stays, including those on ventilators or who have multiple organ system failure or severe wounds, freeing critical resources at general hospitals.

Key findings from the report include:

• Pennsylvania's 12 LTCHs provided more than 130,000 days of care to very sick patients in 2022. Their average stay (29 days) is much longer than general hospitals (six days) due to the complexity of cases.
• LTCHs are struggling due to low Medicare payments and insurance denials, leading to a third of Pennsylvania LTCHs closing since 2016.
• The long-term sustainability of Pennsylvania LTCHs is at risk due to a proposed change to Medicare payments for high-cost outlier (HCO) cases, those in which patient care is exceptionally expensive.
• Medicare sets a minimum loss that LTCHs must absorb before being reimbursed for some of the cost of HCO cases. If the proposed Medicare changes take effect, this threshold will increase more than 51 percent in a year and will have more than tripled since 2021.
• Losing more LTCHs will hurt all Pennsylvanians’ access to care as capacity is strained in both LTCHs and the general acute care hospitals that depend on them to provide long-term care. This could increase health care costs and readmissions.

The report is available online.