Eliminating LTACs Could Save Medicare Billions, Boost Home Health


Each year, Medicare spends billions of taxpayer dollars to help pay for long-term care hospitals (LTCHs), also commonly referred to as long-term acute care hospitals (LTACs). Doing so is incredibly wasteful, critics argue, especially when equal or better care can likely be achieved for far less by skilled nursing facilities (SNFs) and home health care agencies.

The rise and wastefulness of LTACs were recently highlighted in a study circulated by the National Bureau of Economic Research.

LTACs started out as a regulatory carveout for a few dozen speciality hospitals in the early 1980s. Since that time, however, LTACs have grown into an industry with more than 400 hospitals and annual Medicare spending that checked in at $5.4 billion in 2014, according to the study.

Before LTACs, patients with long-term care needs traditionally received services from SNFs or at home by home health agencies.

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