HR-9468-119
Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 40 - 0.
Sponsored by Kevin Hern (R-OK)
What it does
This bill would extend, from 2026 to 2032, an existing exception period related to Medicare's "site neutral" payment policy for long-term care hospitals (LTCHs). It would also add a new "high acuity" criterion allowing certain LTCH discharges—patients transferred directly from a general acute-care or critical access hospital with specific high-severity diagnosis codes—to qualify for standard (non-site-neutral) higher Medicare payment rates, and it would expand the ICU and ventilator criteria to also count stays in critical access hospitals as qualifying prior admissions.
Who benefits
Long-term care hospitals, particularly those treating high-acuity patients transferred from acute-care or critical access hospitals, would benefit from higher Medicare payment rates on qualifying discharges. LTCH operators and investors, especially those with hospitals already built, under construction, or with approved certificates of need, would gain financial predictability. Patients needing specialized long-term acute care may benefit if the payment changes preserve LTCH capacity and access in their region.
Who is hurt
The Medicare Trust Fund and federal taxpayers could bear increased costs if more discharges qualify for higher, non-site-neutral payment rates than under current law. General acute-care hospitals and other post-acute providers (e.g., skilled nursing facilities, inpatient rehabilitation facilities) that compete for the same patients could see reduced referral volume or reimbursement pressure. Medicare beneficiaries broadly could face marginally higher program costs or premiums if spending increases are not offset elsewhere.
Supporters argue
Supporters argue that the current site-neutral payment policy, if allowed to fully take effect, could force some long-term care hospitals treating the sickest, highest-acuity patients to close or scale back, given these patients require costlier specialized care that acute-care hospitals or nursing facilities cannot adequately provide. They contend the new high-acuity criterion targets payment relief specifically to patients with severe conditions, using objective diagnosis-based thresholds (MS-LTC-DRG relative weight of 0.8 or greater) rather than broadly rolling back cost-saving reforms, preserving access to specialized care in underserved areas.
Opponents argue
Opponents argue that repeatedly delaying and narrowing site-neutral payment policy—originally enacted to reduce Medicare spending on care that could be delivered as cheaply in general hospitals—undermines a deliberate cost-control reform and could increase Medicare spending without clear evidence that outcomes improve. They contend that carving out exceptions based on prior hospital type and diagnosis codes creates complexity that specialty hospitals may be positioned to exploit, and that the 2032 extension delays needed payment reform for six more years without offsetting savings elsewhere in the program.
Constitutional context
This bill involves Congress's Taxing and Spending Clause authority (Article I, Section 8, Clause 1) to set conditions and payment rates for a federal spending program, which raises no novel constitutional question, as Medicare payment methodology has long been recognized as within Congress's spending power to define and revise.
Checks and balances
Congress directly amends the statutory payment formula, and the Department of Health and Human Services (CMS) retains implementation authority through rulemaking, with courts available to review agency interpretations under ordinary administrative law standards.
Historical precedent
The site-neutral payment policy for LTCHs was originally created by the Bipartisan Budget Act of 2013 and has been amended and its transition periods extended multiple times since, including prior legislation delaying full implementation.