The “25-percent threshold rule” is a Medicare policy that reduces payments to long-term care hospitals (LTCHs) if more than a specified percent of that facility’s discharges were admitted from another hospital. KNG Health assessed assumptions inherent in the 25% rule and modeled potential alternatives to the rule that are more empirically grounded. First, we examined the extent to which Medicare saves money as a result of beneficiaries being discharged from short-term acute care hospitals to long-term care hospitals. Then we developed specifications for policy alternatives while modeling the impact of each alternative on Medicare payments to long-term care hospitals. Our study identified alternative policies that would encourage LTCHs to improve their payment efficiency, while avoiding some of the potentially negative consequences associated with the 25% rule.
Services : Payment Policy & Delivery System Innovation Expertise: Medicare
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