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March 24, 2008

Kerry Weems

Acting Administrator

Centers for Medicare & Medicaid Services

Department of Health and Human Services

Attention: CMS-1393-P

PO Box 8013

Baltimore, MD 21244-8013

***RE: (CMS--1393--P) Medicare Program; Prospective Payment System for
Long-Term Care Hospitals RY 2009: Proposed Annual Payment Rate Updates,
Policy Changes, and Clarifications. (Federal Register Vol. 73, No. 19),
January 29, 2008.***

Dear Mr. Weems:

The Massachusetts Hospital Association (MHA), on behalf of our member
hospitals and health systems, appreciates the opportunity to submit
comments on the CMS proposed changes to the FY 2009 long-term care
hospital (LTCH) prospective payment system.

***[Proposed Changes to LTCH PPS Payments Rates for 2009 LTCH PPS Rate
Year:]{.underline}***

1)  ***Proposed Consolidation of the annual updates for payment and
    MS-LTC-DRG realtive Weights:***

MHA strongly supports the CMS proposal to return the LTCH annual update
schedule for LTCH PPS payments to coincide with the scheduled Inpatient
PPS payments updates. This change will appropriately eliminate the need
to update the LTCH MS-DRG weights twice in a year to coincide with the
annual Inpatient MS-DRG weights. MHA was opposed to the initial change
in the different update periods that our LTCH members had to incorporate
each year. As part of the Administration's administrative simplification
goals, this change will help alleviate one piece of the administrative
burdens that our member LTCHs face each year.

2)  ***LTCH PPS Market Basket***

MHA is strongly opposed to the proposed .9 percent coding reduction to
the Rehabilitation, Psychiatric and Long-term Care (RPL) market basket
(that is set at 3.5 percent to reflect the increase in costs in FY
2009). The proposal to reduce the LTCH payment update is based on the
CMS assumption that LTCH coding behavior led to an inappropriate rate
increases in 2006. However, this assumption is based on old case mix
data that does not accurately reflect the level of services provided by
LTCH providers in FY 2008 because of, among other items, changes in
services due to the implementation of the 25% rule.

According to the preamble of the LTCH proposed rule, CMS continues to
use case mix data from 2005 and 2006 based on inpatient prospective
payment system data from 1987 and 1988. Since 1988, LTCH providers have
treated patients with greater acuity but also developed better treatment
protocols and coordination of care to ensure appropriate patients are
being treated in an LTCH versus other clinical settings. In addition,
LTCH providers continue to work with our QIOs and other providers (e.g.,
acute care hospitals, home health agencies, and SNF/nursing home
providers) to ensure appropriate placement of our patients from the LTCH
in a timely manner. None of these protocols or changes in practice is
reflected in the old base level data used by CMS to determine the
appropriate case mix to warrant such a reduction in the market basket
for FY 2009. Furthermore, given the fact that this rule also encompasses
a 15 month rate year, it is inappropriate to base such a reduction using
only a 12 month case mix review. To that end, we propose that CMS hold
off on any further market basket decreases until it conducts a study
using the most current case mix changes to determine if a market basket
decrease in warranted.

MHA further supports the arguments articulated by the American Hospital
Association that with LTCH providers showing continued negative margins,
further reductions in the market basket will result in Medicare LTCH
payments falling below an appropriate cost of care for LTCH patients. We
strongly urge CMS to ensure that the data they are using is actually
based on current 2008 levels of case mix and services prior to any
market basket changes.

3)  ***Standard Federal Rate***

MHA strongly disagrees with CMS' arbitrary and unfounded decision to
change the LTCH base rate to use the FY 2007 base rate when calculating
the FY 2009 update for the LTCH prospective payment system. CMS
consistently uses the most recent federal base rate for all other PPS
rules and fee schedules in determining the next fiscal year base rate.
In this LTCH proposed rule, CMS also uses the FY 2008 rate year for
determining the High Cost Outlier fixed loss amount. Although the
*Medicare, Medicaid and SCHIP Extension Act of 2007* mandates that, for
the last 3 months of the 2008 RY, the federal base rate for LTCH PPS be
the same as the base rate for RY 2007, there is no basis or precedence
to use an older base year amount to calculate the next fiscal year
rates. The whole purpose of an annual rate adjustment is to take into
account appropriate updates from one year to another. We urge CMS to
change this provision in the proposed rule and appropriately update the
rates using the FY 2008 standard amount of rate year 2008 -- \$38,356.45
versus the FY 2007 standard amount of \$38,086.04.

***[RTI Research]{.underline}***

While MHA appreciates the initial work done by CMS' contractor to
develop potential LTCH patient and facility level criteria, we believe
that the research to date did not take into account all available data
to make appropriate determinations and recommendations. RTI is currently
developing a uniform post-acute assessment instrument will provide
invaluable information to CMS and the FI/MACs related to determining
whether a patient is appropriate for an LTCH or another level of care.
The fact that one of the RTI technical panels only focused on a small
subset of LTCH patients to determine appropriate level of care without
looking at all patients is very troubling. To that end, we urge CMS to
wait until there is appropriate information looking at all patient types
that are cared for by an LTCH, as identified through the RTI CARE tool,
before patient and facility level criteria is developed. We believe that
using the data gathered by RTI during their study, incorporated with the
current criteria used by the QIOs and others in determining appropriate
patient placements in an LTCH, will develop appropriate placement
standards and criteria for all LTCH patients.

Should you have any questions about our comments, please feel free to
contact Anuj Goel, MHA's Senior Director for Regulations and Staff
Counsel at (781) 272-8000, ext. 140 or via email at <agoel@mhalink.org>.

Sincerely,

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James T. Kirkpatrick

Vice President, Health Care Finance