Keeping patients in LTACHs longer than necessary can increase reimbursement.
Two years ago, on Monitor Mondays and in the RACmonitor eNews, Ronald Hirsch, MD told the story of one of his patients, Carl, whose stay at a skilled nursing facility (SNF) seemed to be stretched to 20 days to maximize the revenue to the facility. For those who are not familiar with SNF payment, Medicare covers the first 20 days of a Part A SNF stay at 100 percent of approved charges, and days 21 to 100 are covered at 80 percent, requiring the SNF to collect from the patient or secondary insurer.
On this week’s Monitor Mondays, Hirsch, a permanent panelist on the long-running Internet broadcast, reported on a recent publication in the American Economic Review that suggests a similar phenomenon happens at long-term acute-care hospitals (LTACHs). In this article, the authors analyzed data on every Medicare patient hospitalized in a long-term acute-care hospital from 2004 to 2013. It ultimately revealed that patients seem to be kept in LTACHs to the point of maximal financial benefit for the facility, a day the authors deemed the “magic day.”
LTACHs are paid similarly to hospitals, with a diagnosis-related grouping-based payment system based on the diagnoses. Each MS-LTC-DRG has an associated average length of stay. But in order to get that full DRG payment, the patient’s length of stay must be at least five-sixth of the average length of stay. If it is less than that, then the hospital is paid a daily rate. For example, MS-LTC-DRG 207, Respiratory system diagnosis with ventilator support of greater than 96 hours, the most common MS-LTC-DRG billed, has an average length of stay of 31.8 days. The short stay outlier payment would be applicable until the patient’s stay exceeds 26.5 days.
The author’s complex analysis demonstrated that there is a large number of discharges from LTACHs that occur at this “magic day,” and it is suggested that it is not due to mere chance, but rather a systematic effort. In the article’s introduction, they reference a Wall Street Journal article from 2015 in which administrators were reportedly incentivized to get patients to reach that day. The authors even looked at data from prior to the implementation of the MS-LTC-DRG system and demonstrated a drastic shift in discharge patterns since that time – going from a normal distribution to one in which discharges appear to peak on the “magic day” (see page 3245).
Payment to LTACHs has received a lot of attention in the past few years. In 2016, the Centers for Medicare & Medicaid Services (CMS) added a site-neutral payment system to LTACHs, reducing payments for patients who had not spent three days in an intensive care unit or received mechanical ventilation for 96 or more hours. MedPAC has also been pushing for payment changes, even suggesting in 2016 that LTACHs get no payment updates.
This issue is certain to raise a few eyebrows in Congress and at CMS. The editors here at RACmonitor eNews and its contributors will be closely monitoring the response.
Hotly anticipated performance targets and payment amounts for the Centers for Medicare & Medicaid Services (CMS) Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model
Many healthcare facilities have implemented processes that require clinical documentation integrity (CDI) staff to review all patients as quickly as possible to establish a working
Please log in to your account to comment on this article.
Sepsis sequencing continues to challenge even experienced coding and CDI professionals, with evolving guidelines, documentation gaps, and payer scrutiny driving denials and data inconsistencies. In this webcast, Payal Sinha, MBA, RHIA, CCDS, CDIP, CCS, CCS-P, CCDS-O, CRC, CRCR, provides clear guideline-based strategies to accurately code sepsis, severe sepsis, and septic shock, assign POA indicators, clarify the relationship between infection and organ dysfunction, and align documentation across teams. Attendees will gain practical tools to strengthen audit defensibility, improve first-pass accuracy, support appeal success, reduce denials, and ensure accurate quality reporting, empowering organizations to achieve consistent, compliant sepsis coding outcomes.
Expert presenters Kathy Pride, RHIT, CPC, CCS-P, CPMA, and Brandi Russell, RHIA, CCS, COC, CPMA, break down complex fracture care coding rules, walk through correct modifier application (-25, -57, 54, 55), and clarify sequencing for initial and subsequent encounters. Attendees will gain the practical knowledge needed to submit clean claims, ensure compliance, and stay one step ahead of payer audits in 2026.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.
As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
