The STAR Act modifies how Medicare pays long-term care hospitals, which provide extended treatment for patients recovering from acute illnesses or injuries. The bill extends reduced payment rates for these hospitals through 2032, six years longer than currently scheduled, and creates a new "high acuity criterion" that allows certain long-term care hospitals to receive higher payments if their patients come from acute care hospitals and are assigned to specific high-severity diagnosis categories. This high acuity exemption applies only to long-term care hospitals that enrolled before the bill's enactment and meet certain requirements, such as having construction agreements in place or state approval. The legislation takes effect October 1, 2026, and aims to preserve access to long-term care services for Medicare patients with complex medical needs while maintaining cost controls through the extended payment reductions.
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