H.R. 9468, Saving Today’s Acute-Care Resources Act

Bill Summary

H.R. 9468 would change Medicare’s payments to long-term care hospitals (LTCHs) beginning in 2028 by expanding eligibility for the program’s standard rate to include high-acuity cases and those involving transfers from critical access hospitals. In addition, from 2027 through 2036, the bill would reduce Medicare’s current site-neutral rate for LTCHs by 10 percent.

Estimated Federal Cost

The estimated budgetary effects of H.R. 9468 are shown in Table 1. The costs of the legislation fall within budget function 570 (Medicare).

Basis of Estimate

For this estimate, CBO assumes that H.R. 9468 will be enacted late in calendar year 2026.

Background

Medicare pays for long-term hospital care at one of two rates. To be eligible for the standard rate under current law, cases must meet certain diagnostic criteria and must have been transferred from a short-term acute care hospital to an LTCH. Medicare makes smaller payments, at the site-neutral rate, for care at short-term acute care hospitals and for cases at LTCHs that do not meet the standard-rate criteria. (The site-neutral rate is based on Medicare’s Inpatient Prospective Payment System.)

Direct Spending

CBO estimates that, on net, enacting the bill would increase direct spending for fee-for-service (FFS) Medicare and Medicare Advantage plans by a total of $943 million over the 2026-2036 period.

Standard-Rate Payments. CBO expects that under the bill’s expanded eligibility rules, total LTCH admissions would rise because more cases would qualify for the standard rate. We estimate that enacting the bill would increase annual spending for standard-rate cases by about 3.5 percent. At the same time, the increase in patient volume at LTCHs would reduce Medicare’s payments to short-term acute care hospitals and critical access hospitals. Site‑neutral payments to LTCHs also would be expected to decline.

To estimate the increase in standard-rate admissions under the bill, CBO relied on LTCH admission patterns during and after the public health emergency declared in response to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act waived the application of the lower site-neutral payment rate during the public health emergency. Payments for cases that otherwise would have been made at the site-neutral rate instead were made at the higher standard rate.

CBO expects that the number of LTCH admissions qualifying under the bill would be above CBO’s February 2026 baseline projections but below the number recorded at the end of the public health emergency. For this estimate, one-quarter of the increase in standard-rate spending under the bill is attributed to information compiled for the end of the public health emergency, and three-quarters is based on data from the period after the emergency ended.

CBO estimates that expanding eligibility for the standard rate would increase Medicare’s FFS spending by $662 million over the 2026-2036 period. Reductions in site-neutral payments under the Inpatient Prospective Payment System and to critical access hospitals would partially offset that amount.

Site-Neutral Rate. H.R. 9468 would reduce Medicare’s site-neutral rate by 10 percent. CBO estimates that enacting the bill would decrease site-neutral FFS payments to LTCHs by $253 million over the 2026‑2036 period because more of those cases would become eligible for the standard rate and because the site-neutral rate reduction would result in smaller payments to the LTCHs for the remaining site-neutral cases. About a third of the cases that would now be paid at the site‑neutral rate would be eligible for the standard rate under the bill.

Medicare Advantage Payments. Care for Medicare enrollees is covered either by traditional FFS Medicare or by Medicare Advantage plans. Under current law, the Centers for Medicare & Medicaid Services sets benchmark rates for Medicare Advantage plans using estimated per capita spending for FFS Medicare. Because enacting H.R. 9468 would increase spending for FFS enrollees, CBO expects that enacting the bill also would lead to higher Medicare Advantage benchmark rates. As a result, CBO estimates that more than half of the bill’s budgetary effect would stem from larger payments to those plans: Enacting the bill would increase Medicare’s FFS payments by $409 million and increase Medicare Advantage payments by $534 million over the 2026-2036 period.

Spending Subject to Appropriation

Using information about similar activities, CBO estimates that the administrative costs of implementing H.R. 9468 would total less than $500,000 over the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

Uncertainty

CBO’s estimate for H.R. 9468 is subject to considerable uncertainty arising from the limited information available for projecting the bill’s effects on changes in LTCH admissions. Because providers’ responses to the expanded eligibility criteria could differ from CBO’s projections, actual effects on Medicare spending could be larger or smaller than estimated.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 2.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 9468 would increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting H.R. 9468 would increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2037.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Estimate Prepared By

Federal Costs: Julia Sheriff

Mandates: Andrew Laughlin

Estimate Reviewed By

Sarah Sajewski
Chief, Health Systems and Medicare Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

Chad Chirico 
Director of Budget Analysis

Estimate Approved By