S. 2628 — Catastrophic Specialty Hospital Act of 2025

This section amends the Medicare long-term care hospital (LTCH) prospective payment system (PPS) by (1) modifying the application of payment adjustment rules under paragraph (6)(A)(i) to reference new paragraph (8) and (2) adding paragraph (8) to exempt LTCHs designated as catastrophic specialty hospitals from the LTCH PPS under paragraph (1) and from paragraph (6), for cost reporting periods beginning on or after enactment, notwithstanding specified prior statutory moratoriums on LTCHs. The Secretary designates an LTCH as a catastrophic specialty hospital for an initial 3-year period if, for the prior 3-year period, it meets all of the following criteria: (1) at least 80% of discharges (including non-Medicare) were classified under specified MS-LTCH-DRGs for spinal cord injury or acquired brain injury; (2) offered a continuum of care (inpatient, outpatient, and long-term health and wellness) for patients with such injuries; (3) had at least 175 discharges (including non-Medicare) under spinal cord injury MS-LTCH-DRGs and 175 under acquired brain injury MS-LTCH-DRGs in each of the three 1-year periods; (4) at least 30% of discharged inpatients were admitted from out-of-state; and (5) exhibited commitment to neurorehabilitation research (e.g., dedicated full-time research personnel, peer-reviewed publications, clinical training or residency programs in relevant fields). Designations may be renewed for additional 3-year periods if criteria continue to be met; if not initially met, the LTCH has 60 days to submit additional compliance information before expiration. (As background, LTCHs provide extended post-acute care averaging over 25 days to medically complex patients; paragraph (6) generally implements a dual-rate payment structure aligning certain LTCH payments closer to acute-care hospital rates.)