I believe so. Patients who are on Medicare and needing LTC have to meet the criteria for skilled services and then MDS is used to determine reimbursement. That's why LTC facilities are regulated by the state.
They do not use MDS as LTAC is not the same as skilled nursing. They are not mostly disabled, but like any adult acute hospital the majority of patients are elderly. They are a mix of private insurance, medicare, and medicaid
Medicare is actually NOT a main source of referrals for LTACs; Medicare does not have a specific benefit for LTAC, and considers the skilled days to be the same as subacute rehab days. Sooo they would naturally prefer to pay for treatment at a much less expensive subacute than at an LTAC unless absolutely necessary.
This also means that if a person does end up in an LTAC on Medicare, they will typically run through their allowed days pretty quickly, considering that there is an extended average LOS.
In my experience, working in an LTAC for a few years, Medicaid and most importantly Medicaid-pending, and Charity are the most common payers. Commercial insurances are much less common, as they also consider subacute rehab to be preferable.