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News update: since press time, we have learned the Senate version of the national health care reform bill contains a one-year delay in the implementation of RUG-IV. Watch the Keane Care blog for news about these important developments: www.keanecare.com
The incentives SNFs have worked with since 1998 will change when RUG-IV is implemented at the same time as MDS 3.0, October 1, 2010.
In the Final Rule for 2010 SNF Medicare payment, CMS states that "for FY 2011, RUG-IV is being designed so that overall payments will be at the same level as under RUG-III. Although total payments do not change, the distribution of payments does change, which is why payment rates for the complex medical groups (that is Extensive Care, Special Care, and Clinically Complex) will increase significantly."
SNFs are paid for beneficiaries' care through the Medicare Prospective Payment System (PPS). PPS works by assigning beneficiaries to RUGs (resource utilization groups) representing the quantity of resources used by patients and certain patient characteristics.
Each RUG has a dollar amount associated with it that is the daily rate paid to SNFs for a beneficiary.
The system uses MDS data to calculate a group for each beneficiary.
The time study used to create RUG-III was conducted in 1995-97. To update that system CMS contracted for the 2006 STRIVE time study that was conducted in 205 nursing homes in 15 states. The STRIVE study found significant changes, likely due to changes over time in the SNF population and industry practices.
Total Payment Constant
In the Final Rule published July 31, 2009, CMS officials stated that when the RUG-IV system was tested against RUG-III using 2007 claims data, they found that RUG-IV would produce lower overall payments. In keeping with their goal to not increase or decrease payment, CMS will adjust the weights to keep total payment the same under both systems.
Overall changes in RUG-IV include increasing the number of RUGs (resource utilization groups) to 66 from the 53 used by RUG-III. The 66 RUGs are divided into 16 categories, two categories were added: Special Care High and Special Care Low.
Except for Extensive Services, the categories are split by ADL score. RUG-IV groups may be further differentiated based on nursing rehab services and signs of depression.
Certain existing conditions and/or services currently used to classify patients to RUG-III groups will move up or down in RUG-IV. For more information on those changes, see the Keane Care RUG-IV White Paper at: www.keanecare.com/resources/files/RUG-IV.pdf
Counting Therapy
Because approximately 90 percent of the days of service for Medicare Part A SNF stays include therapy, in developing RUG-IV and MDS 3.0 CMS looked carefully at utilization patterns and changes in the practice of therapy identified through the STRIVE research.
For more on therapy changes see page 40315 of the Final Rule at: http://edocket.access.gpo.gov/2009/pdf/E9-18662.pdf and Keane Care's MDS 3.0 paper at: www.keanecare.com/products/pdf/mds30-flyer.pdf
Payment for therapy will be affected by the following changes in how data is collected with MDS 3.0:
Concurrent therapy: minutes will be divided/allocated among patients instead of counting as 1:1 Section T deleted: in MDS 2.0 it is used for estimated therapy OMRA: added an abbreviated optional start-of-therapy assessment
With MDS 3.0, therapy minutes will be coded in these types:
Individual therapy Concurrent therapy: no more than two patients, both of whom must be in line-of-sight of the treating therapist or assistant Group therapy: rules not changed
Extensive Services
To qualify for the highest-paid RUGs, Rehab Plus Extensive Therapy, patients must also qualify for an Extensive Services RUG. Under RUG-IV its criteria has changed to eliminate the look-back period and modify the list of services.
Analysis of STRIVE data showed that some services were captured that were provided only prior to admission. The study found that those instructions resulted in payments that are "inappropriately high for many non-complex medical cases."
With MDS 3.0, data in P1a will be reported as: 1) care received after admission (or readmission), and 2) care received in the hospital, before SNF admission. Items received while not a resident, such as oxygen therapy and IVs would be used only for care planning and not payment.
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