CMS Pub. 100-22, ch. 3, § 60

That Do Not Submit Required Quality Data

(Rev. 12900; Issued:10-24-24; Effective:06-07-24; Implementation: 11-26-24)

Section 3004 of the Affordable Care Act directs the Secretary to establish quality reporting requirements

for LTCHs. Beginning with fiscal year 2014, and each subsequent year, if an LTCH does not submit

required quality data, their payment rates for the year are reduced by two (2) percentage points for that

fiscal year.

Penalties for Failure to Report

For fiscal year 2014, and each subsequent year, if an LTCH does not submit required quality data, their

payment rates for the year are reduced by two (2) percentage points for that fiscal year. Application of the

2 percentage point reduction may result in an update that is less than 0.0 for a fiscal year and in payment

rates for a fiscal year being less than such payment rates for the preceding fiscal year. In addition,

reporting-based reductions to the market basket increase factor will not be cumulative; they will only apply

for the FY involved.

Every year, in late spring/summer, CMS will provide Medicare contractors with a Technical Direction

Letter (TDL) identifying LTCHs not meeting the quality data reporting requirements. The contractor shall

notify the LTCHs that they have been identified as not complying with the requirements of submitting

quality data and are scheduled to have Medicare payments to their facility reduced by 2 percentage points.

Medicare contractors shall include the model language at the end of this section in their initial notification

letter to the LTCHs. The notification letter shall inform the LTCH whether they were identified as not

complying with the LTCH quality reporting requirements. The notification letter shall also inform the

LTCH regarding the process to request a reconsideration of their payment reduction if they disagree with

the determination. The reconsideration process shall be outlined within the initial notification letter.

Contractors shall send the notification letters no later than 10 business days from the receipt of the TDL.

Immediately after the notification letters are issued, Medicare contractors shall submit to the CMS contacts

noted in the TDL a list of agencies who received a letter. There is a 30-day period from the date of the

notification letter to submit a letter requesting reconsideration and documentation to support a finding of

compliance.

CMS will then review all reconsideration requests received and provide a determination to the Medicare

contractor typically within a period of 2 to 3 months. In its review of the LTCH documentation, CMS will

determine whether evidence to support a finding of compliance has been provided by the LTCH. The

determination will be made based solely on the documentation provided. If clear evidence to support a

finding of compliance is not present, the 2 percentage point reduction will be upheld. If clear evidence of

compliance is present, the reduction will be reversed.

After the reconsideration process has occurred and prior to October 1 of each FY, CMS will provide the

Medicare contractors with a second TDL that includes the final list of LTCHs that failed to comply with

the data submission requirements. The Medicare contractors will then be responsible for notifying each

LTCH that failed to comply with the quality data submission requirements that it will receive a 2

percentage point reduction in the annual payment update. The Medicare contractors will also update the

LTCH provider file based on the appropriate scenarios listed below. Medicare contractors shall include the

model language at the end of this section in the dispute notification letter to the LTCHs. Contractors shall

send this second letter only to LTCHs that requested reconsideration. Additionally, the Medicare

contractors shall include information regarding the LTCH’s right to further appeal the 2 percentage point

reduction via the Provider Reimbursement Review board (PRRB) appeals process. Contractors shall send

these second notification letters no later than 10 business days from the receipt of the TDL.

If the LTCH does not dispute their reduction, the Medicare contractor shall update their provider file for

the LTCH. The contractor shall set an indicator in the provider file that triggers Medicare systems to

calculate the 2 percentage point reduction on all claims for the upcoming fiscal year. If the CMS

determination upholds the 2 percentage point reduction, the contractor shall update their provider file in

this fashion also.

If the CMS determination reverses the 2 percentage point reduction, the contractor shall not update their

provider file for the LTCH and shall notify the LTCH that they will receive their full LTCH PPS payment

update for the upcoming year.

Model language for initial notification letters:

“This letter is to officially notify you that (Facility Name, CMS Certification Number 000000) is subject

to a reduction in payment for not meeting the Affordable Care Act (ACA) of 2010 requirement for LTCHs

to submit quality data. Therefore, Medicare payments to your agency will be reduced by two (2)

percentage points for [insert upcoming year], unless you can provide evidence that this determination is in

error. CMS updates the requirements and the quality reporting measures required for the LTCH Quality

Reporting Program (QRP) annually through rulemaking.

CMS has determined that this LTCH is subject to a 2% reduction in the FY (insert upcoming year) Annual

Payment Update (APU) for failure to meet quality reporting requirements pursuant to the Affordable Care

Act Section 3004 because of the following reason(s):

• The LTCH failed to submit the required data to the Centers for Disease Control and Prevention

(CDC) National Healthcare Safety Network (NHSN); and/or

• The LTCH failed to submit the required quality data that are to be submitted to the CMS

designated data submission system.

If you believe you have been in compliance with the quality data reporting requirement and have been

identified for this payment reduction in error, you must submit an email requesting reconsideration and

provide documentation demonstrating your compliance. You have the right to request a reconsideration of

this decision. If you choose to request a reconsideration of this decision, you must submit the request no

later than 30 days following the receipt of this letter.

The request must include the following information:

• The LTCH CMS Certification Number (CCN);

• The LTCH business name;

• The LTCH business address;

• The CEO or CEO-designated representative contact information including name, email address,

telephone number, and physical mailing address;

• The CMS identified reason(s) for non-compliance from the non-compliance notification letter;

• Information supporting the LTCH belief that non-compliance is in error, or evidence of the

impact of extraordinary circumstances which prevented timely submission of data.

The request for reconsideration must be accompanied by supporting documentation demonstrating

compliance. CMS will be unable to review any request that fails to provide the necessary documentation

along with the request for reconsideration. Supporting documentation may include any or all of the

following:

• Email communication;

• Data submission reports from the CMS designated data submission system;

• Data submission reports from the National Healthcare Safety Network (NHSN);

• Proof of previous waiver approval;

• Notification of the CCN activation letter to prove that the CCN was not activated by the end of

the reporting quarter;

• Other documentation that may support the rationale for seeking reconsideration.

Please ensure that NO protected health information (PHI) is included in the documentation being

submitted for review.

Documentation that does not support a finding of compliance is as follows:

• Evidence or admission of error on the part of LTCH staff, even if the involved staff members

are no longer employed by the LTCH and/or a corrective action plan has been or will be put in

place after the end of the reporting year;

• Evidence or assertion that failure to comply was the fault of a vendor or contractor that was

hired by the LTCH to perform reporting functions; and,

• Evidence of delays establishing electronic data interchange connectivity between the LTCH and

the Medicare claims processing contractor for the purpose of billing, since LTCH quality

reporting data is not dependent on billing.

Your letter and documentation must be submitted via email to CMS for reconsideration, using the

following email address: LTCHQRPReconsiderations@cms.hhs.gov.

In its review of the LTCH documentation, CMS will determine whether evidence to support a finding of

noncompliance has been provided by the LTCH. The determination will be made based solely on the

documentation provided. CMS will not contact the LTCH to request additional information or to clarify

incomplete or inconclusive information. For further questions related to the reconsideration process, please

refer to the following CMS LTCH website: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/LTCH-Quality-Reporting/LTCH-Quality-Reporting-Reconsideration-and-

Exception-and-Extension.html

An LTCH must submit a request for reconsideration and receive a decision on that request before they can

file an appeal with the Provider Reimbursement Review Board (PRRB).”

The Medicare contractor shall update (or not update) the LTCH provider file based on the appropriate

scenario listed below:

Upheld

• If the LTCH was notified that it was potentially subject to the 2 percentage point reduction, and did not

request reconsideration, then the Medicare contractor shall set a quality reporting indicator in the provider

file that triggers Medicare systems to calculate the 2 percentage point reduction on all of the LTCH’s

claims for the upcoming fiscal year.

• If the LTCH was notified that it was potentially subject to the 2 percentage point reduction, and requested

a reconsideration, but on reconsideration CMS upheld the decision to apply the 2 percentage point

reduction, then the Medicare contractor shall set a quality reporting indicator in the provider file that

triggers Medicare systems to calculate the 2 percentage point reduction on all of the LTCH’s claims for the

upcoming fiscal year.

Reversed

• If the LTCH was notified that it was potentially subject to the 2 percentage point reduction, and requested

a reconsideration, and on reconsideration CMS determined that the LTCH should not be subject to the 2

percentage point reduction (i.e., reversed its decision), then the Medicare contractor shall not update the

quality reporting indicator in the LTCH’s provider file and shall notify the LTCH that they will receive

their full LTCH PPS payment update for the upcoming fiscal year.

• If the LTCH submitted the necessary LTCH Quality Reporting data and was never notified that it might

potentially be subject to the 2 percentage point reduction, then the Medicare contractor shall take no action

regarding the quality reporting indicator in the LTCH’s provider file.

Model language for dispute notification letters (LTCH provider notification instructions contained in

second TDL):

Upheld:

“Thank you for requesting a reconsideration of the determination made by the Centers for Medicare &

Medicaid Services (CMS) regarding reduction to this LTCH’s annual update for failure to meet the

requirements of the LTCH Quality Reporting Program (QRP).

CMS reviewed the reconsideration request of this LTCH and is upholding the decision to reduce the

annual payment update for Medicare payments for Fiscal Year (FY) (insert upcoming year). Our records

indicate that this LTCH did not provide evidence that it submitted required quality data during the required

timeframes. Therefore, for services provided by this LTCH between October 1, (insert upcoming year)

and September 30, (insert upcoming year), the annual payment update for Medicare payments for FY

(insert upcoming year) will be reduced by two (2) percentage points.

If your facility wishes to further appeal this determination, the appeals process set forth in 42 CFR Part 405,

Subpart R (a Provider Reimbursement Review Board (PRRB) appeal) applies. Details are available on the

CMS.gov PRRB Review Instructions website.

CMS appreciates the opportunity to respond to the reconsideration request for the LTCH QRP. For

additional concerns related to the reconsideration process, questions may be submitted to the following

CMS email address: LTCHQRPReconsiderations@cms.hhs.gov.”

Reversed:

“Thank you for requesting a reconsideration of the determination made by the Centers for Medicare &

Medicaid Services (CMS) regarding reduction to this LTCH’s annual payment update for failure to meet

the requirements of the LTCH Quality Reporting Program (QRP).

CMS reviewed the reconsideration request and determined that this LTCH satisfactorily met the quality

data requirements for the FY (insert upcoming year) payment determination. Therefore, the two (2)

percentage point reduction to the FY (insert upcoming year) annual payment update for failure to comply

with quality reporting requirements will not be applied.

CMS appreciates the opportunity to respond to this reconsideration request for the LTCH QRP. For

additional concerns related to the reconsideration process, questions may be submitted to the following

CMS email address: LTCHQRPReconsiderations@cms.hhs.gov.”