STAR Act

This bill aims to adjust Medicare payment rates for long-term care hospitals (LTCHs) by extending current site-neutral payment reductions. Specifically, it amends the Social Security Act to prolong the application of these reduced payment rates for LTCHs from 2026 to 2032, impacting how these facilities are reimbursed for patient care. Furthermore, the legislation introduces a significant new high acuity criterion to determine which patients are exempt from these site-neutral payment rates, effective October 1, 2026. To qualify, a patient's stay in an LTCH must immediately follow a discharge from an acute care or critical access hospital, involve a high-severity diagnosis-related group, and occur in an established LTCH. This new criterion is designed to ensure that LTCHs treating the most complex patients receive appropriate Medicare reimbursement. The bill also modifies existing criteria for nonapplication of site-neutral payment rates, specifically for patients meeting intensive care unit (ICU) or ventilator criteria. For discharges occurring on or after October 1, 2026, a patient's preceding stay can now originate from another LTCH or a critical access hospital, broadening the scope of patients eligible for higher payment rates under these specific conditions.