Catastrophic Specialty Hospital Act of 2025

New Medicare payment path for specialty hospitals

If enacted, this bill would create a separate Medicare payment pathway for certain long‑term care hospitals called catastrophic specialty hospitals. The Secretary would designate hospitals based on a 3‑year lookback. For each cost reporting period in that lookback, at least 80% of discharges must be for spinal cord injury or acquired brain injury MS‑LTCH‑DRGs. Each year in the 3‑year window must include at least 175 discharges for spinal cord injury and 175 for acquired brain injury. At least 30% of inpatients must have been admitted from outside the hospital's State. Counts may include patients not entitled to Medicare Part A. Designation would apply to cost reporting periods beginning on or after the date of enactment and last for the initial period plus the following 3‑year block. The Secretary would review the first expiration and give hospitals 60 days to submit extra information before a designation expires. Designated hospitals would be paid under the new pathway instead of the standard LTCH prospective payment system for those cost reporting periods.