Guide · Long-Term Care
LTCH Site-Neutral Payment
The LTCH PPS pays two rates: the standard federal rate for cases that meet the clinical criteria, and the lower site-neutral rate for the rest. This is who qualifies and how the site-neutral amount is set.
No PHIReferenceInformational reference — paraphrased from CMS rules and manuals, not billing or legal advice; verify against the FY 2026 IPPS/LTCH final rule and your MAC.
When the standard rate applies
Dual-rate structureA discharge is paid the standard federal rate only when all of the following hold; otherwise it is a site-neutral case.
| Immediate acute admission | admitted directly from a subsection (d) IPPS hospital (admission within one day of that discharge) |
| One or both criteria | at least 3 days in ICU/CCU during the prior acute stay, or at least 96 hours of ventilator services in the LTCH |
| Not psych/rehab | the LTCH discharge does not have a principal psychiatric or rehabilitation diagnosis |
A patient admitted from a non-IPPS source — such as a critical access or cancer hospital — cannot satisfy the admission criterion, so the case is paid site-neutral.
How the site-neutral amount is set
Lesser of two| IPPS-comparable amount | an IPPS-equivalent per-diem amount, including any applicable outlier |
| 100% of estimated cost | facility CCR × covered charges |
The site-neutral payment is the lesser of the two. The IPPS-comparable amount is reduced by 4.6% for FY 2018 through FY 2026 under the Bipartisan Budget Act of 2018. The transitional blend (FY 2016–FY 2019) has fully phased out, so qualifying site-neutral cases are paid the full site-neutral amount.
Site-neutral and Medicare Advantage cases are excluded when testing the >25-day average length-of-stay requirement, and MS-LTC-DRG relative weights are built only from standard-rate cases.
