LifeCare Holdings Provides Potential Impact of Proposed Medicare Reimbursement Changes for Long-Term Acute Care Hospitals
Posted on: Tuesday, 31 January 2006, 21:00 CST
PLANO, Texas, Jan. 31 /PRNewswire/ -- the Centers for Medicare and Medicaid Services ("CMS") proposed regulatory changes to Medicare reimbursement for long-term acute care hospitals ("LTACHs"). LifeCare Holdings, Inc. (the "Company") estimates that the proposed new regulations would have reduced its 2005 annual Medicare revenue by approximately 12%, or $29 million, had they been in effect for the entire year based upon the Company's Medicare discharges for the year excluding its three New Orleans hospitals that were closed in the aftermath of Hurricane Katrina. This estimated impact does not consider CMS' proposal to eliminate the annual inflationary increase in Medicare reimbursement for LTACH providers. During the past two years CMS has provided an annual increase in Medicare reimbursement for inflation of approximately 3% to help offset the inflationary increase in provider expenses. The current proposal by CMS is subject to a 60-day public comment period, and as such, is subject to change before becoming effective on July 1, 2006. The Company will provide additional information on the impact of the proposed changes when the final regulations are issued.
As previously announced, the company will be providing comments to CMS on the proposed regulation changes during the next 60 days. W. Earl Reed III, President and Chief Executive Officer of the Company stated, "We are hopeful that CMS will reconsider its proposed regulatory changes and instead complete its on-going study that was intended to provide new patient and facility criteria for LTACH providers. LifeCare continues to focus its strategic mission on medically complex patients that require extensive clinical services. We believe the proposed CMS regulations are mistakenly based upon the assumption that patients with shorter than average length of stays in LTACHs are not medically complex. Furthermore, the proposed payment scheme distorts the underlying premise of the prospective payment system which assigns a DRG weight based upon the predetermined average cost of all patients in a particular diagnosis group. By proposing a different payment scheme for those patients who stay in the hospital less than the average length of stay from those who stay more than the average length of stay, the payment system itself is compromised.
The Company's comments may contain forward-looking statements and are subject to a number of uncertainties and risks that could significantly affect the current plans and expectations and the future financial condition and results of the Company. Therefore actual results may differ materially from those suggested by such forward-looking statements.
LifeCare, based in Plano, Texas, operates 18 long-term acute care hospitals located in nine states. Long-term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. For more information on LifeCare, visit our website at http://www.lifecare-hospitals.com/.
First Call Analyst: FCMN Contact:
LifeCare Holdings, Inc.
CONTACT: Jim Shelton of LifeCare Holdings, Inc., +1-469-241-2113
Web site: http://www.lifecare-hospitals.com/
Source: PRNewswire
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