Georgia Medicare LTCH PPS 2026 Guide

When a Georgia Medicare beneficiary spends weeks in an ICU on a ventilator after sepsis with multi-organ failure, and the acute hospital intensivist concludes that she will continue to require hospital-level care for many additional weeks, the question of where she will go next is unlike the questions families face for stroke, hip fracture, or routine post-acute care. She is not ready for a SNF because she still requires daily intensivist-level decisions about her ventilator, her vasopressors, and her complex wound care. She is not appropriate for an IRF because she cannot yet tolerate 3 hours of therapy per day. She cannot go home because she requires 24-hour hospital-level nursing. The setting built for her is a Long-Term Care Hospital (LTCH), a specialized hospital paid by Medicare under the LTCH Prospective Payment System (LTCH PPS) authorized by Section 123 of the Balanced Budget Refinement Act 1999 (the Section 123 BBRA 1999 LTCH framework).

LTCHs occupy a small but critical niche in the Medicare post-acute landscape. Nationally, several hundred Medicare-certified LTCHs operate, with a small number located in Georgia, concentrated heavily in the Atlanta metropolitan area, with major operators including Select Specialty Hospitals, Kindred-affiliated facilities, Vibra Healthcare, and Specialty Hospital of Atlanta. LTCH patients are typically those who have spent days or weeks in an ICU, often on prolonged mechanical ventilation, often with multiple organ system failures, often with complex wounds, and who require continued hospital-level care to recover sufficiently to transition to a lower-acuity setting.

The Medicare LTCH PPS governs how Medicare pays these facilities. The framework was authorized by Section 123 of the Balanced Budget Refinement Act 1999 (BBRA) and Section 307(b) of the Benefits Improvement and Protection Act 2000 (BIPA), codified at Section 1886(m) of the Social Security Act, and implemented through regulations at 42 CFR Part 412 Subpart O. LTCH PPS took effect for cost reporting periods beginning on or after October 1, 2002. It pays LTCHs a federal per-discharge amount based on the MS-LTC-DRG (Medicare Severity Long-Term Care Diagnosis-Related Group) classification system, adjusted by wage index and a set of outlier provisions.

A central feature of the LTCH PPS framework is the 25-day average length of stay (ALOS) criterion. To qualify as an LTCH for Medicare payment purposes, a hospital must maintain an inpatient ALOS greater than 25 days, calculated using Medicare patient data over its cost reporting period. This criterion is what distinguishes an LTCH from an acute hospital. A second central feature, added by Section 1206 of the Bipartisan Budget Act 2013, is the site-neutral payment policy: LTCH cases that do not meet specific patient criteria (3 or more ICU days at the discharging hospital, or mechanical ventilation for 96 or more hours during the discharging hospital stay) are paid at a site-neutral rate, the lower of an IPPS comparable per-diem amount or 100 percent of estimated cost. The site-neutral rate substantially reduces payment for cases for which LTCH placement is not clinically justified by the patient criteria.

This guide is published by Brevy at brevy.com as part of our mission to be America's most trusted and comprehensive eldercare resource. It covers the Section 123 BBRA 1999 LTCH framework, the Section 307(b) BIPA 2000 implementation, the Section 1886(m) statutory authority, the 42 CFR Part 412 Subpart O regulations, the MS-LTC-DRG case-mix system, the 25-day ALOS criterion, the site-neutral payment policy under BBA 2013 Section 1206, the LTCH patient criteria, the federal per-discharge payment methodology, the outlier provisions and interrupted stay policy, the standard Part A cost-sharing applicable to LTCH stays, the LTCH Quality Reporting Program, the hospital-within-hospital provisions, the LTCH moratorium history, the differences between LTCH and IRF and SNF coverage, the major Georgia LTCHs, and the practical questions Georgia families face when LTCH placement is being considered.

By Brevy Care Team · Last verified May 21, 2026

For Georgia Medicare beneficiaries with medically complex long-stay care needs, the LTCH setting is often the only appropriate post-acute option. SNFs cannot provide the intensivist-level decision-making, the ventilator management expertise, or the wound care intensity that the most complex post-ICU patients require. IRFs cannot accept patients who cannot tolerate 3 hours of therapy per day or who have complex active medical management needs. Home health, even with intensive nursing visits, cannot replicate hospital-level continuous monitoring and 24-hour intensivist or hospitalist availability.

Consider a Georgia Medicare beneficiary in his early 70s who was admitted to an Atlanta acute hospital with septic shock and acute respiratory distress syndrome (ARDS). After 14 days in the ICU on mechanical ventilation, he is medically stable but cannot wean from the ventilator. He has acquired multiple pressure injuries during his ICU stay, has lost substantial muscle mass, and has a tracheostomy. The acute hospital case manager identifies that he requires continued hospital-level care for ventilator weaning, wound care, and rehabilitation conditioning, but he is not yet a candidate for IRF (cannot tolerate 3 hours therapy) and not appropriate for SNF (requires hospital-level care for ventilator management).

The LTCH setting is built for him. An LTCH can provide intensivist-led ventilator weaning protocols, specialty wound care nursing, intensive respiratory therapy, gradual conditioning physical therapy, and 24-hour hospital nursing. The typical LTCH stay for a ventilator-dependent patient is 30 to 50 days, after which the patient may be successfully weaned and ready for IRF or SNF for further rehabilitation, or in some cases, ready for home health with continued tracheostomy management.

Because he meets the LTCH patient criteria (more than 14 ICU days and more than 96 hours of mechanical ventilation at the discharging hospital), his LTCH case will be paid at the standard LTCH PPS rate. If he had not met the patient criteria, the LTCH might still admit him but would be paid at the site-neutral rate, which is substantially lower and may not be financially sustainable for the LTCH for many such cases.

For Georgia, several specific factors shape the LTCH landscape. The LTCHs are concentrated in the Atlanta metropolitan area because LTCHs depend on referral flow from large urban acute hospitals with substantial ICU volume. Rural Georgia patients who need LTCH care typically travel to Atlanta or, in some cases, to LTCHs in other states. Select Specialty Hospitals operates the largest national LTCH chain and has multiple Georgia facilities. Kindred-affiliated and successor facilities continue to operate in Georgia under various corporate structures. Vibra Healthcare and Specialty Hospital of Atlanta provide additional LTCH capacity.

Brevy publishes this guide and related guides at brevy.com to help Georgia families understand LTCH care, what kinds of patients are appropriate, what the LTCH stay looks like, and how the LTCH framework differs from SNF, IRF, and other post-acute settings. The right choice depends on the patient's clinical condition, recovery trajectory, family situation, and the goals of care.

Before Section 123 BBRA 1999 LTCH PPS: the cost-based framework

Before LTCH PPS, LTCHs were paid under a cost-based reimbursement system known as the "TEFRA target amount" framework. Under TEFRA (the Tax Equity and Fiscal Responsibility Act of 1982), LTCHs received cost-based reimbursement subject to target amount limits per discharge that grew at specified rates over time. The framework supported the unique cost structure of LTCH care but produced wide payment variability across similar facilities and weak incentives for efficiency.

By the late 1990s, Congress directed CMS to develop a prospective payment system for LTCHs comparable to the systems already implemented for acute hospitals (IPPS in 1983) and being developed for SNFs (1998) and IRFs (2002). Section 123 of the Balanced Budget Refinement Act 1999 directed CMS to develop LTCH PPS, and Section 307(b) of the Benefits Improvement and Protection Act 2000 set additional implementation parameters.

After several years of development, including data analysis to define LTCH-specific case-mix groups, CMS implemented LTCH PPS effective for cost reporting periods beginning on or after October 1, 2002. The transition to LTCH PPS was significant for LTCH operations. Some LTCHs that had relied on high cost reimbursement to support very complex cases found PPS more restrictive. Other LTCHs that had operated efficiently saw modest changes. Over time, LTCH operations adapted to the PPS framework, and the case-mix methodology was refined through multiple rulemaking cycles, culminating in the transition from LTC-DRGs to MS-LTC-DRGs effective FY 2008.

The 25-day average length of stay criterion

The 25-day average length of stay (ALOS) criterion at 42 CFR 412.23(e) is the central LTCH classification requirement. A hospital must maintain an inpatient ALOS greater than 25 days, calculated using Medicare patient data over the cost reporting period, to qualify as an LTCH for Medicare payment purposes.

The ALOS calculation uses Medicare inpatient discharges and the corresponding lengths of stay. Excluded from the calculation are certain categories of patients (such as those who left against medical advice or who were transferred out very early), but most LTCH Medicare patients are included.

The 25-day threshold is what fundamentally distinguishes an LTCH from an acute hospital. Acute hospitals typically have ALOS of 4 to 6 days for Medicare patients. LTCHs, by contrast, often have ALOS of 30 to 40 days or more for Medicare patients, reflecting the medically complex long-stay patient population they serve.

LTCHs that fall below the 25-day threshold lose LTCH classification. The consequence is significant: the facility becomes subject to acute hospital IPPS payment rather than LTCH PPS payment. For most LTCHs, this would result in substantially lower payment per case and would not be financially sustainable for the LTCH patient mix.

Compliance with the 25-day ALOS is reviewed annually through the cost report. The Worksheet S-2 of the LTCH cost report captures the data needed for the calculation. CMS reviews compliance, and facilities approaching the threshold may be subject to additional scrutiny.

The 25-day criterion has been a feature of the LTCH framework since the original LTCH definitions in the 1980s. It was retained through the implementation of LTCH PPS in 2002 and remains the central LTCH classification requirement today.

The site-neutral payment policy

The site-neutral payment policy, established by Section 1206 of the Bipartisan Budget Act 2013, was one of the most significant changes to LTCH PPS since its implementation. The policy was effective for LTCH discharges in cost reporting periods beginning on or after October 1, 2015 (FY 2016).

Background and rationale

By the early 2010s, MedPAC and other analysts had documented substantial variation in LTCH patient mix. Some LTCH cases involved truly medically complex post-ICU patients for whom LTCH was the appropriate setting. Other LTCH cases involved patients who could plausibly have been managed in SNFs or IRFs but who had been placed in LTCHs, in part because LTCH payment was higher than the alternatives.

MedPAC recommended a payment policy that would distinguish between cases for which LTCH-level payment is appropriate (medically complex post-ICU patients) and cases for which lower payment would be appropriate (cases that could have been managed in less acute settings). Section 1206 of BBA 2013 implemented this policy framework.

Dual payment system

Under the site-neutral payment policy, LTCH cases are paid under one of two rates:

• Standard LTCH PPS rate: Applied to cases meeting the LTCH patient criteria
• Site-neutral rate: Applied to cases not meeting the LTCH patient criteria, calculated as the lower of an IPPS comparable per-diem amount or 100 percent of estimated cost

LTCH patient criteria for the standard rate

A case qualifies for the standard LTCH PPS rate if the patient meets at least one of the following criteria, documented in the discharging hospital records:

• 3 or more days in an ICU at the discharging hospital during the prior acute hospital stay
• Mechanical ventilation for 96 or more hours during the discharging hospital stay (regardless of where the ventilation occurred)

The criteria are designed to identify patients with documented critical illness severity sufficient to justify subsequent LTCH-level care. Documentation requirements include ICU admission and discharge dates, ventilator initiation and discontinuation, and the specific ICU stay sequences.

Site-neutral rate calculation

For cases that do not meet the LTCH patient criteria, payment is the lower of:

• IPPS comparable per-diem amount: The standard IPPS payment for the equivalent MS-DRG, divided by the IPPS geometric mean length of stay, then multiplied by the actual LTCH days
• 100 percent of estimated cost: Based on the LTCH's cost-to-charge ratio applied to the case's charges

The lower-of calculation generally produces payment that is substantially below the standard LTCH PPS rate. The intent is to remove the financial incentive for placing acute-care cases in LTCHs.

Transition

A transition period was implemented to soften the financial impact on LTCHs. During the transition, site-neutral cases were paid using a blend of LTCH PPS and site-neutral rates. The transition concluded for cost reporting periods on or after October 1, 2019, after which the full site-neutral policy applies.

Implementation impact

The site-neutral policy has reshaped LTCH operations. LTCHs have become increasingly selective about admissions, focusing on cases that meet the patient criteria. Some LTCHs that historically relied on a mix of qualifying and non-qualifying cases have closed or downsized. The patient population in LTCHs has become more concentrated in ventilator weaning, complex wound care, and post-ICU recovery.

MS-LTC-DRG case-mix system

The MS-LTC-DRG (Medicare Severity Long-Term Care Diagnosis-Related Group) system is the case-mix methodology used to assign LTCH discharges to payment groups.

Background

Before FY 2008, LTCH PPS used LTC-DRGs derived from the acute hospital DRG system but with LTCH-specific relative weights. Effective FY 2008, CMS transitioned to MS-LTC-DRGs aligned with the MS-DRG system used by acute hospitals. The MS-LTC-DRG system preserves the alignment with MS-DRGs but uses LTCH-specific relative weights derived from LTCH cost data.

Assignment

Each LTCH discharge is assigned to an MS-LTC-DRG based on:

• Principal diagnosis
• Secondary diagnoses (especially complications and comorbidities)
• Procedures
• Discharge disposition

The MS-LTC-DRG assignment determines the case-mix relative weight, which is applied to the federal LTCH rate to compute the base payment.

Common LTCH MS-LTC-DRGs

The LTCH population is concentrated in a limited set of clinical scenarios. Common MS-LTC-DRGs include:

• Respiratory diagnoses with prolonged mechanical ventilation (with specific MV duration MS-LTC-DRGs)
• Septicemia and severe sepsis with major complications
• Heart failure with complex comorbidities
• Acute and chronic respiratory failure
• Complex wound care diagnoses
• Renal failure with multiple comorbidities

The MS-LTC-DRGs for prolonged mechanical ventilation cases are among the highest-weighted MS-LTC-DRGs because of the resource intensity of ventilator management.

Annual updates

MS-LTC-DRG relative weights are updated annually in the LTCH PPS Final Rule based on the most recent LTCH cost data. CMS uses a recalibration process to maintain budget neutrality while reflecting changes in case mix and cost.

Federal per-discharge payment

The federal per-discharge payment is the foundation of LTCH PPS. It combines the federal rate, the MS-LTC-DRG relative weight, and various adjustments to produce the case-specific payment.

Federal rate

The federal rate is set in the annual LTCH PPS Final Rule. The rate reflects expected average cost per LTCH discharge, adjusted for market basket updates and productivity adjustments. The 2026 federal rate is updated through the FY 2026 final rule.

Wage index

The wage index adjusts the labor-related portion of the federal rate for geographic differences in hospital labor costs. LTCHs use the same wage index as acute hospitals in their geographic area. The wage index is updated annually.

Case-specific payment

The base payment for a case is:

Federal rate × MS-LTC-DRG relative weight × wage-adjusted labor factor + non-labor factor

Adjustments for outliers, interrupted stays, and site-neutral application modify this base.

Outlier provisions

High-cost outlier

Cases with estimated cost exceeding the fixed loss threshold (defined in the final rule) receive additional payment beyond the standard MS-LTC-DRG amount. The marginal cost factor (typically 80 percent of cost above the threshold) defines the additional payment.

The high-cost outlier provision protects LTCHs from substantial financial losses on cases with exceptional cost, while still maintaining financial incentives for efficient care.

Short-stay outlier

Cases discharged substantially before the expected length of stay for the MS-LTC-DRG are paid as short-stay outliers, with reduced payment relative to the standard MS-LTC-DRG payment. Short-stay outliers apply primarily to cases that died early, were transferred out early, or were discharged early for other reasons.

The short-stay outlier provision is designed to align payment with the resources actually used, recognizing that LTCH PPS is per-discharge while LTCH costs are largely time-based.

Interrupted stay policy

The interrupted stay policy governs scenarios in which an LTCH patient is temporarily transferred to an acute hospital or other facility and then returns to the LTCH.

• 3-day or less interruption: Treated as continuous LTCH stay. The LTCH receives single per-discharge payment, and the interruption days are not included in the LTCH stay days for outlier calculation.
• 4 to 9 day interruption (with return to LTCH): Specific rules apply. The cases may be treated as continuous or as new admissions depending on the specifics.
• Greater than 9 days interruption: Typically treated as new admission. The LTCH receives separate per-discharge payment for the second LTCH stay.

The interrupted stay policy prevents LTCHs from receiving multiple payments for what is effectively a single course of treatment, while accommodating brief transfers for acute issues.

Standard Part A cost-sharing

LTCH care is paid under standard Medicare Part A inpatient cost-sharing, comparable to acute hospital and IRF cost-sharing. Beneficiaries face the same deductible and coinsurance structure regardless of whether the admission is to an acute hospital, an IRF, or an LTCH.

• Days 1-60: Patient pays the Part A deductible ($1,736 per benefit period in 2026), no daily coinsurance after the deductible
• Days 61-90: Daily coinsurance ($434 per day in 2026)
• Lifetime reserve days (up to 60 lifetime): Daily coinsurance ($868 per day in 2026)
• After 90 days plus lifetime reserve in a single spell of illness: Patient responsible for full cost

The spell of illness framework applies. An LTCH admission within the same spell of illness as a prior acute hospital admission does not require a separate deductible. The 60-day break between spells applies to LTCH admissions just as to acute hospital admissions.

For LTCH patients with stays of 30 to 50 days or more, the cost-sharing implications can be significant. A 40-day LTCH stay following a 14-day acute hospital stay places the patient at day 54 of the spell of illness. If the patient is then transferred to a SNF or IRF for further care, additional days in the spell of illness will exhaust the days 1-60 coverage and enter the days 61-90 coinsurance period.

Most Medigap plans cover the Part A deductible and coinsurance, eliminating beneficiary out-of-pocket cost for the LTCH stay (except for excluded services). Medicare Advantage plans handle cost-sharing differently and may have plan-specific copays for LTCH admissions.

No three-day qualifying stay requirement

A key distinction from SNF is that LTCH admission does not require a three-day qualifying hospital stay. Patients can be admitted to an LTCH directly from an acute hospital with any length of stay, as long as the LTCH admission criteria are met.

In practice, almost all LTCH admissions come from acute hospitals, often after extended ICU stays. The absence of the three-day stay requirement is largely academic for most LTCH cases because LTCH patients typically have prior acute stays of two to four weeks or more. The relevance is more about the relationship to SNF policy than about LTCH practice.

Direct admission from the community is theoretically possible but uncommon for LTCHs because the medically complex patient population that LTCHs serve is rarely identified outside the acute hospital setting.

LTCH Quality Reporting Program (LTCH QRP)

Section 3004 of the Affordable Care Act 2010 established the LTCH Quality Reporting Program, codified at Section 1886(m)(5) of the Social Security Act. The LTCH QRP requires LTCHs to report specific quality measures, and LTCHs that fail to report face a reduction in the annual market basket update. Families and providers can confirm the current statutory penalty in the most recent LTCH PPS Final Rule.

Quality measures

The LTCH QRP measures evolve through annual rulemaking. Recent measures include:

• Function (mobility, self-care change from admission to discharge)
• Pressure injuries (new or worsened)
• Healthcare-associated infections (CAUTI, CLABSI, MRSA bacteremia, C. difficile infection)
• Falls with major injury
• Ventilator weaning success rate
• Discharge to community
• Hospital readmissions within 30 days
• Medication reconciliation
• Drug regimen review with follow-up

The healthcare-associated infection measures are particularly important for LTCHs given the medically complex patient population and the frequent use of central lines, urinary catheters, and ventilators that create infection risk.

LTCH CARE Data Set

LTCHs use the LTCH CARE Data Set as the patient assessment instrument. The CARE Data Set captures patient demographics, functional status, comorbidities, and quality indicators at admission and discharge. The data drive the function measures and inform other quality indicators.

Public reporting

LTCH QRP measures are publicly reported on Medicare Care Compare. Families can compare LTCHs based on the publicly reported quality data, including function improvement, healthcare-associated infection rates, and discharge to community outcomes.

42 CFR Part 482 Hospital Conditions of Participation

LTCHs participate in Medicare as hospitals and are subject to the hospital Conditions of Participation at 42 CFR Part 482. The CoPs cover:

• Governing body and management
• Patient rights
• Quality assessment and performance improvement (QAPI)
• Medical staff (including required physician oversight)
• Nursing services (with appropriate ratios for the medically complex patient population)
• Medical record services
• Pharmaceutical services
• Radiologic services
• Laboratory services
• Food and dietetic services
• Utilization review
• Physical environment
• Infection control (especially important for LTCH patients with frequent central lines, urinary catheters, ventilators, and wounds)
• Discharge planning
• Special LTCH-specific requirements

The infection control CoP is particularly stringent for LTCHs given the high baseline risk of healthcare-associated infections in the medically complex LTCH patient population.

Hospital-within-hospital LTCH provisions

A significant subset of LTCHs operate as "hospital-within-hospital" facilities, where the LTCH operates as a separate hospital within an acute hospital facility. The arrangement involves:

• Separate Medicare provider numbers for the LTCH and the host acute hospital
• Shared physical infrastructure (building, in some cases shared support services)
• Separate cost reporting
• Operational independence requirements

Host-hospital admission threshold

CMS has established a regulatory cap on the share of LTCH admissions that can come from a co-located host acute hospital in a hospital-within-hospital arrangement. The intent is to prevent gaming where an acute hospital could create a co-located LTCH primarily as a discharge destination for its own complex patients. The threshold has exceptions (particularly for rural areas where alternative LTCH options may be limited) and has been adjusted through rulemaking over time; LTCH operators should verify the current threshold and exception criteria in 42 CFR Part 412 Subpart O.

Common ownership restrictions

CMS has restricted common ownership between LTCHs and co-located host hospitals in many circumstances. The intent is to ensure operational and financial independence of the LTCH from the host facility. Common ownership restrictions have been refined through rulemaking.

Stand-alone LTCHs

A substantial portion of LTCHs operate as stand-alone facilities (not co-located with an acute hospital). Stand-alone LTCHs avoid the 25 percent threshold and common ownership restrictions, but they must independently support all hospital infrastructure including emergency response, laboratory, radiology, and pharmacy services.

LTCH moratorium history

The LTCH industry has been shaped by a series of moratoria limiting new LTCH development over the past two decades.

Section 114 MMSEA 2007

Section 114 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 established a three-year moratorium on new LTCH and LTCH bed certifications. The moratorium was a response to concerns about rapid LTCH growth and uncertain quality and cost-effectiveness.

Section 3106 ACA 2010

Section 3106 of the Affordable Care Act 2010 extended the LTCH moratorium for additional years.

Moratorium expiration

The LTCH moratorium expired in December 2014. New LTCH development became technically possible, but the site-neutral payment policy implemented in 2016 created substantial financial constraints on new LTCH economics.

Current LTCH supply

The combined effects of the moratorium and the site-neutral payment policy have produced a stable or declining national LTCH count, down from peaks earlier in the LTCH PPS era. Limited new LTCH development is expected for the foreseeable future given the site-neutral economic constraints. Families can confirm current LTCH counts on the CMS LTCH provider files and on Medicare Care Compare.

LTCH vs IRF vs SNF distinctions

Understanding the differences between LTCH, IRF, and SNF is essential for clinical decision-making and family understanding.

LTCH characteristics

• Hospital-level care for medically complex patients
• Typical stays of 25-50+ days
• ICU-level capabilities (intensivists, ventilator management)
• Complex wound care
• Standard Part A cost-sharing (acute hospital framework)
• No three-day qualifying stay required
• Patient criteria for standard rate (3+ ICU days or 96+ hours ventilation)
• 25-day average length of stay requirement at facility level
• MS-LTC-DRG case-mix
• Federal per-discharge payment

IRF characteristics

• Hospital-level rehabilitation care
• Typical stays of 10-30 days
• Physician-led (physiatrist) multidisciplinary team
• 3-hour rule (3 hours therapy daily)
• 60 Percent Rule (13 qualifying conditions)
• Standard Part A cost-sharing
• No three-day qualifying stay required
• IRF-PAI assessment
• CMG case-mix
• Federal per-discharge payment

SNF characteristics

• Nursing facility setting
• Typical stays of 14-100 days
• Variable therapy intensity
• Three-day qualifying hospital stay required
• Days 1-20: no coinsurance; days 21-100: per-day coinsurance
• MDS 3.0 assessment
• PDPM case-mix (since October 2019)
• Per-diem payment

Coverage decision factors

The choice among LTCH, IRF, and SNF depends on:

• Medical complexity: Highest for LTCH, intermediate for IRF, lower for SNF
• Therapy intensity: Highest for IRF (3 hours daily), intermediate for LTCH (as tolerated), lower for SNF (variable)
• Rehabilitation potential: IRF for substantial gain expected, LTCH for medically complex with rehab potential, SNF for moderate gain
• Hospital-level needs: LTCH and IRF (both are hospitals), not SNF (nursing facility)

A patient ready to participate in intensive therapy after stabilization will likely go to an IRF. A patient still requiring hospital-level medical management may go to an LTCH. A patient who is medically stable with moderate rehab needs may go to a SNF.

Worked example 1: GA LTCH ventilator weaning scenario

Consider a 73-year-old Georgia Medicare beneficiary admitted to an Atlanta acute hospital with septic shock and acute respiratory distress syndrome. After 18 days in the medical ICU, he is medically stable but cannot wean from the ventilator. He has a tracheostomy, multiple stage III pressure injuries, and significant ICU-acquired weakness. The acute hospital intensivist and case manager identify him as a candidate for LTCH care for continued ventilator weaning, wound care, and rehabilitation conditioning.

LTCH admission process

1. Acute hospital discharge planning: identifies LTCH as appropriate setting
2. LTCH evaluation: Select Specialty Hospital reviews medical records, evaluates appropriateness
3. Acceptance: LTCH accepts admission
4. Transfer: Patient transferred to LTCH

LTCH patient criteria assessment

• ICU days at discharging hospital: 18 days (exceeds 3-day threshold) ✓
• Mechanical ventilation hours during discharging hospital stay: approximately 432 hours (exceeds 96-hour threshold) ✓

Either criterion alone qualifies the case for the standard LTCH PPS rate. Both are met in this case.

LTCH course

• Day 1-7: Continued ventilator support, intensivist-led weaning protocol initiated, wound care begun
• Day 8-21: Gradual ventilator weaning, intermittent T-piece trials, wound care progression, conditioning PT/OT
• Day 22-35: Continued weaning, increasing periods off ventilator, advanced wound care, increased mobility
• Day 36-42: Liberation from ventilator (kept tracheostomy initially for secretion management), continued wound healing, rehabilitation conditioning
• Day 43: Discharged to IRF for intensive rehabilitation (now able to tolerate 3 hours therapy)

Payment

• MS-LTC-DRG: Assigned based on respiratory diagnosis with prolonged ventilation
• Standard LTCH PPS rate: Applied because patient meets criteria
• Wage index: Atlanta-area wage index applied
• High-cost outlier: Case did not exceed outlier threshold (within expected range)
• Total LTCH payment: Federal rate × MS-LTC-DRG weight, adjusted by wage index

Beneficiary cost-sharing

• 14-day acute hospital stay used days 1-14 of spell of illness
• 43-day LTCH stay used days 15-57 of spell of illness
• All within days 1-60 of spell, so only the Part A deductible applies
• Medigap covers the deductible

Outcome

The patient transitions to IRF for two weeks of intensive rehabilitation, then to home with home health for tracheostomy management and continued recovery. The LTCH stay enabled liberation from ventilator and stabilization of wound care, which would not have been possible in lower-acuity settings.

Worked example 2: LTCH site-neutral payment policy application

Consider a 68-year-old Georgia Medicare beneficiary admitted to an Atlanta acute hospital with pneumonia. After 6 days on the medical floor and 1 day in the ICU (with non-invasive ventilation only, no intubation), she has resolved her pneumonia but has lost substantial functional capacity due to deconditioning and underlying medical complexity. The acute hospital case manager identifies her as a potential LTCH candidate based on continued need for hospital-level medical management.

LTCH patient criteria assessment

• ICU days at discharging hospital: 1 day (below 3-day threshold) ✗
• Mechanical ventilation hours: 0 hours of invasive mechanical ventilation (non-invasive ventilation does not count) (below 96-hour threshold) ✗

Neither criterion is met. The case is subject to site-neutral payment.

LTCH admission decision

The LTCH must decide whether to accept the admission knowing that the payment will be at the site-neutral rate. The site-neutral rate is substantially lower than the standard LTCH PPS rate. For this patient, the LTCH may decide:

• Decline admission: Patient is referred to SNF or IRF as appropriate
• Accept at site-neutral rate: If the LTCH judges that the patient's needs are uniquely served by LTCH and the case is financially manageable

In practice, most LTCHs have become highly selective about site-neutral cases. They typically prefer to focus on cases meeting the patient criteria.

Alternative placement

For a patient like this who does not meet LTCH patient criteria, alternatives may include:

• SNF (if a three-day qualifying acute hospital stay is met and the patient is appropriate for SNF level of care)
• IRF (if she can tolerate 3 hours of therapy daily and has a qualifying condition or contributes to 40% non-qualifying portion)
• Acute hospital rehabilitation unit (if available and appropriate)
• Home health (if she can return home with services)

The acute hospital case manager works with the family and clinical team to identify the appropriate post-acute setting.

Lesson

The site-neutral payment policy substantially affects LTCH admission decisions. Families and acute hospital case managers must understand that LTCH placement requires meeting patient criteria for the LTCH to receive standard payment. Cases not meeting criteria may not be appropriate for LTCH placement and may require alternative post-acute settings.

Worked example 3: 25-Day ALOS compliance scenario

Consider a Georgia LTCH that has been operating for several years with a typical Medicare patient mix. Over the most recent cost reporting period, the facility's Medicare patient ALOS has trended downward, approaching the 25-day threshold.

ALOS calculation

• Medicare inpatient discharges over the cost reporting period: 350 patients
• Total Medicare inpatient days: 9,100 days
• Calculated ALOS: 9,100 / 350 = 26.0 days

The ALOS exceeds 25 days but is approaching the threshold.

Compliance review

• CMS reviews the cost report and ALOS calculation
• The facility remains in compliance with the 25-day threshold
• However, the trend is concerning, and the facility's leadership reviews patient mix

Strategic response

The facility identifies that recent admission patterns have included more cases with shorter expected lengths of stay. The leadership considers:

• Adjusting admission criteria to focus on longer-stay patients
• Reviewing case management practices that may be discharging patients earlier than clinically optimal
• Reviewing the mix of qualifying (standard rate) vs site-neutral cases

Consequences of falling below 25 days

If the facility's ALOS falls below 25 days in a future cost reporting period, the facility would lose LTCH classification. The consequences:

• Payment converts from LTCH PPS to acute hospital IPPS
• Substantial reduction in per-case payment for the LTCH patient population
• Facility may not be financially sustainable as IPPS-paid facility
• Re-qualification process is required to regain LTCH status (multi-year compliance demonstration)

Lesson

The 25-day ALOS is a facility-level operational reality that shapes LTCH admission and discharge decisions. LTCHs must maintain a patient mix and care patterns that produce ALOS above 25 days while still appropriately discharging patients when they no longer require LTCH-level care.

Worked example 4: MS-LTC-DRG case-mix classification

Consider a 70-year-old Georgia Medicare beneficiary admitted to a Specialty Hospital of Atlanta LTCH after 22 days in the ICU at an Atlanta acute hospital. He has multiple medical conditions including acute respiratory failure with prolonged mechanical ventilation (now resolved, awaiting tracheostomy decannulation), septic shock with multi-organ failure, acute kidney injury requiring continuous renal replacement therapy (now resolved), and multiple pressure injuries.

MS-LTC-DRG assignment

• Principal diagnosis: Respiratory failure with prolonged mechanical ventilation
• Procedures: Mechanical ventilation, tracheostomy, continuous renal replacement therapy
• Secondary diagnoses: Septicemia, pressure injuries, acute kidney injury, multiple comorbidities

The case is assigned to a high-weighted MS-LTC-DRG reflecting prolonged mechanical ventilation with major complications. The relative weight is high, producing a substantial federal per-discharge payment.

Payment calculation

• Federal LTCH rate (FY 2026): hypothetical $50,000 base
• MS-LTC-DRG relative weight: 1.85 (high)
• Wage index (Atlanta area): 1.05 (above national average)
• Adjusted payment: $50,000 × 1.85 × wage-adjusted factor = approximately $97,000-$100,000

The payment reflects the clinical complexity and resource intensity of the case.

Outlier consideration

If the case cost substantially exceeds the standard payment, the case may qualify for high-cost outlier payment. The fixed loss threshold and marginal cost factor are applied to compute the outlier payment. For exceptionally complex cases with very high cost, the outlier payment can significantly augment the base MS-LTC-DRG payment.

Lesson

The MS-LTC-DRG system aligns payment with patient complexity. Highly complex cases receive substantial payment that supports the resource intensity required. The system creates incentives for LTCHs to focus on appropriate patients while providing financial sustainability for complex care.

Worked example 5: LTCH vs IRF vs SNF coverage decision

Consider three different Georgia Medicare beneficiaries discharging from the same acute hospital after different acute events.

Patient A: Stroke with rehabilitation potential

• 76-year-old with ischemic stroke, 5-day acute hospital stay, no ICU
• Right-sided hemiparesis, expressive aphasia, mild dysphagia
• Medically stable, can tolerate 3 hours of therapy daily
• Has substantial rehab potential

Appropriate setting: IRF. The patient meets the 13 qualifying conditions (stroke), can tolerate 3 hours of therapy, and has rehab potential. IRF will provide intensive multidisciplinary rehabilitation to optimize recovery. LTCH is not appropriate (not medically complex enough). SNF would underserve the therapy intensity needs.

Patient B: Septic shock with prolonged ventilation

• 73-year-old with septic shock, ARDS, 18 days in ICU, 14 days on mechanical ventilation
• Status post tracheostomy, multiple pressure injuries, ICU-acquired weakness
• Cannot tolerate 3 hours of therapy (too deconditioned), continued medical complexity

Appropriate setting: LTCH. The patient meets LTCH patient criteria (18 ICU days, 14 days of ventilation, well above the 3-day/96-hour thresholds). LTCH provides ventilator weaning, wound care, and conditioning rehabilitation. IRF is not appropriate (cannot tolerate 3 hours therapy). SNF cannot provide the hospital-level medical management.

Patient C: Hip fracture with moderate recovery needs

• 80-year-old with hip fracture, 4-day acute hospital stay (meets three-day requirement)
• Status post hip fracture repair, medically stable, moderate rehab needs
• Can tolerate moderate therapy (1.5-2 hours daily) but not intensive 3 hours

Appropriate setting: SNF. The patient meets the three-day qualifying hospital stay requirement (4 days inpatient), needs nursing-level care plus moderate therapy, and is not appropriate for IRF (cannot tolerate 3 hours daily). LTCH is not appropriate (not medically complex enough).

Lesson

The three settings serve fundamentally different patient populations. LTCH is for medically complex post-ICU patients requiring continued hospital-level care. IRF is for patients with rehabilitation potential who can tolerate intensive therapy. SNF is for patients with moderate medical and rehabilitation needs who meet the three-day qualifying stay. Family and clinical understanding of these distinctions ensures appropriate placement.

Worked example 6: LTCH interrupted stay scenario

Consider a 75-year-old Georgia Medicare beneficiary on day 28 of an LTCH stay at a Vibra Hospital Atlanta facility. He has been making progress on ventilator weaning but develops acute gastrointestinal bleeding requiring urgent transfer to an Atlanta acute hospital for endoscopy and management.

Initial interruption

• Day 28: Transferred to acute hospital for GI bleed
• Day 29-30: Acute hospital management, stabilization
• Day 31: Returned to LTCH

This is a 3-day interruption (days 28-30 away from LTCH, returning on day 31). Under the interrupted stay policy:

• The 3-day or less interruption is treated as continuous LTCH stay
• The LTCH receives a single per-discharge payment for the overall LTCH stay
• The acute hospital receives separate payment for the brief acute stay (which is paid under IPPS)

Alternative scenario: 7-day interruption

If the acute hospital course had required 7 days (more substantial bleeding, complications):

• Days 28-34 in acute hospital
• Day 35: Return to LTCH
• This is a 7-day interruption, falling in the 4-9 day range
• Specific rules apply about whether the case is treated as continuous or as new admission

Alternative scenario: 12-day interruption

If the acute hospital course had required 12 days (complex management, multiple complications):

• Days 28-39 in acute hospital
• Day 40: Return to LTCH (if returning at all)
• This is a 12-day interruption, exceeding the 9-day threshold
• The LTCH may treat this as a new admission for payment purposes

Lesson

The interrupted stay policy creates important payment and operational considerations for LTCHs. Brief acute care interruptions are handled administratively without significant payment disruption. Longer interruptions can affect payment treatment. LTCHs work with acute hospitals and Palmetto GBA (Georgia's Medicare Administrative Contractor) to ensure correct payment handling for interrupted stays.

14 best practices for Georgia LTCH care

1. Confirm LTCH patient criteria before admission: 3+ ICU days at discharging hospital OR 96+ hours of mechanical ventilation. Cases not meeting criteria are paid at site-neutral rate.

2. Document ICU stays and ventilator hours precisely: The patient criteria documentation must come from the discharging acute hospital records. Precise ICU admission and discharge times and ventilator initiation and discontinuation are essential.

3. Coordinate carefully with the discharging acute hospital: LTCH care continues acute hospital care without missing a beat. Medication reconciliation, plan of care continuation, and communication between intensivists and LTCH physicians ensure continuity.

4. Develop and follow standardized ventilator weaning protocols: Successful weaning is one of the most important LTCH services. Standardized protocols, supported by respiratory therapy expertise, drive outcomes.

5. Provide specialized wound care nursing: LTCH patients often have multiple pressure injuries from ICU stays. Wound care nurses, advanced wound treatments, and proactive prevention are essential.

6. Maintain rigorous infection control: LTCH patients are at high risk for healthcare-associated infections due to central lines, urinary catheters, ventilators, and wounds. Infection control is a quality and safety priority.

7. Implement comprehensive discharge planning early: Begin discharge planning at admission. Identify likely discharge setting (IRF, SNF, home with home health) and work backward to optimize the LTCH course for that destination.

8. Engage family in care planning: LTCH stays are long and emotionally challenging for families. Regular family meetings, clear communication about progress and setbacks, and engagement in discharge planning are essential.

9. Coordinate with palliative care when appropriate: Many LTCH patients have serious illness and uncertain prognosis. Palliative care consultation helps address goals of care, symptom management, and family support.

10. Document daily progress with attention to medical necessity: Each day in LTCH must be justified by hospital-level medical needs. Documentation supports the medical necessity of continued LTCH stay.

11. Monitor 25-day ALOS at the facility level: Compliance with the 25-day ALOS criterion is a facility-level concern. Track ALOS trends and ensure that admission and discharge patterns sustain compliance.

12. Participate fully in LTCH QRP: Quality reporting is required, and quality outcomes are publicly visible on Care Compare. Strong QRP participation supports both compliance and public reputation.

13. Optimize Care Compare presentation: Public quality data is increasingly used by referring acute hospitals, families, and payers. Strong outcomes drive referrals and patient choice.

14. Coordinate with Palmetto GBA for payment questions: Palmetto GBA is the Georgia MAC and processes LTCH PPS claims. Provider Customer Service and educational resources address payment, billing, and policy questions.

14 common issues and how to address them

1. Site-neutral payment for cases that do not meet patient criteria: Substantially lower payment than standard LTCH rate. Address by careful admission screening and selective admission of qualifying cases. Site-neutral cases may not be financially sustainable for many LTCHs.

2. 25-day ALOS drift below threshold: Facility risk of losing LTCH classification. Monitor ALOS continuously, adjust admission and discharge patterns to maintain compliance.

3. Documentation gaps in ICU days or ventilator hours: LTCH cannot demonstrate patient criteria met if discharging hospital records are incomplete. Address by improving acute hospital coordination and obtaining complete documentation before admission.

4. Hospital readmissions affecting QRP scores: 30-day readmissions reduce quality scores. Reduce readmissions through robust discharge planning, post-discharge follow-up, and continuity with receiving facilities.

5. Healthcare-associated infections: CAUTI, CLABSI, MRSA, C. diff measures public reporting. Reduce HAIs through infection control bundles, antimicrobial stewardship, and device management protocols.

6. Pressure injury development or worsening: LTCH patients are at high risk. Address through wound risk assessment at admission, repositioning, advanced surfaces, and specialized wound care nursing.

7. Ventilator weaning failures: Some patients cannot be weaned despite optimal care. Address through realistic goal-setting with family, palliative care consultation, and consideration of long-term ventilator placement when weaning is not possible.

8. Interrupted stay payment confusion: 3-day, 9-day, and longer rules. Address through familiarity with the interrupted stay policy and coordination with Palmetto GBA.

9. Acute hospital reluctance to refer non-criteria cases: Acute hospitals know that LTCH placement of cases not meeting criteria results in site-neutral payment. Address through clear communication about criteria and appropriate alternative placement for non-criteria cases.

10. Family confusion about LTCH role: LTCH is less familiar to many families than acute hospital, SNF, or home health. Address through clear explanation of LTCH role, expected length of stay, and goals of care.

11. Financial impact of long stays on spell of illness: 40-50 day LTCH stays use substantial portion of spell of illness coverage. Address through family education about Medicare coverage and Medigap protections.

12. Coordination with Medicaid for dual-eligible patients: LTCH stay may interact with Medicaid coverage for some patients. Address through coordination with case management and family.

13. Discharge to community challenges: Some LTCH patients have complex post-LTCH needs (home ventilator, complex wound care, etc.) that strain community resources. Address through advanced discharge planning, home health coordination, and family preparation.

14. OIG audits of patient criteria documentation: Audits focus on whether documentation supports the patient criteria. Address through robust documentation practices and audit-ready record keeping.

A few more common questions Georgia families ask:

What is the 25-day average length of stay requirement? An LTCH must maintain an inpatient average length of stay (ALOS) greater than 25 days, calculated using Medicare patient data over the cost reporting period. Hospitals failing this requirement lose LTCH classification and become subject to acute-hospital IPPS payment instead.

Who admits patients to LTCHs? Almost all LTCH admissions come from acute hospitals after extended ICU stays. Direct community admission is theoretically possible but uncommon. The acute hospital discharge planning team identifies LTCH candidates and coordinates the transfer.

Does LTCH admission require a three-day qualifying hospital stay? No. Unlike SNF, LTCH admission does not require a three-day qualifying hospital stay. Almost all LTCH admissions come from extended acute stays in practice, but the three-day rule is not an LTCH eligibility condition.

What is the MS-LTC-DRG system? MS-LTC-DRG (Medicare Severity Long-Term Care Diagnosis-Related Group) is the case-mix classification system that aligns with MS-DRGs but uses LTCH-specific relative weights derived from LTCH cost data. Each LTCH case is assigned to an MS-LTC-DRG based on diagnoses and procedures.

What is the interrupted stay policy? The interrupted stay policy governs scenarios when an LTCH patient is briefly transferred to acute care and returns. A 3-day or less interruption is treated as a continuous LTCH stay. A 4-9 day interruption has specific rules. Greater than 9 days typically results in a new admission.

What are the major Georgia LTCHs? Major Georgia LTCHs include Select Specialty Hospitals at multiple Atlanta-area locations, Kindred-affiliated facilities, Vibra Healthcare facilities, and Specialty Hospital of Atlanta, concentrated in the Atlanta metropolitan area.

What is the LTCH Quality Reporting Program? The LTCH QRP under Section 1886(m)(5) and Section 3004 of the Affordable Care Act 2010 requires LTCHs to report quality measures including function, pressure injuries, healthcare-associated infections, falls, ventilator weaning, discharge to community, and readmissions. Non-reporting results in a market basket reduction; verify the current penalty in the most recent LTCH PPS Final Rule.

Where can I find LTCH quality data? LTCH quality data is publicly reported on Medicare Care Compare. Families can compare LTCHs based on the reported quality measures.

What is a hospital-within-hospital LTCH? A hospital-within-hospital LTCH operates as a separate hospital co-located within an acute hospital facility. The LTCH has its own Medicare provider number and separate cost reporting but shares physical infrastructure with the host. A host-hospital admission cap and common ownership restrictions apply.

What is the LTCH moratorium history? A moratorium on new LTCH and LTCH bed certifications was in effect from 2007-2014 under Section 114 of MMSEA 2007 and Section 3106 of the Affordable Care Act 2010. The moratorium expired in December 2014, but the site-neutral payment policy effective in 2016 created continued constraints on new LTCH development.

Can a Medicare Advantage plan cover LTCH care? Yes, Medicare Advantage plans must cover LTCH services that traditional Medicare covers. The plan may have its own copays, prior authorization requirements, and network restrictions. Families should check plan-specific terms for LTCH coverage.

What is Palmetto GBA's role for Georgia LTCHs? Palmetto GBA is the Medicare Administrative Contractor (MAC) for Georgia. Palmetto processes LTCH PPS claims, provides provider customer service, conducts educational programs, and addresses payment and policy questions for Georgia LTCHs.

What advocacy organization represents LTCHs? The National Association of Long Term Hospitals (NALTH) represents LTCH advocacy interests at the federal level on issues including site-neutral payment, patient criteria, quality reporting, and other regulatory matters.