Long-Term Care

Updates from the May 12 SNF ODF

MDS 3.0 Insider, May 16, 2011

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During the May 12 SNF Open Door Forum (ODF), CMS provided callers with information about what was included in the SNF PPS proposed rule, some MDS 3.0 updates, and touched on a few other topics. Let’s take a closer look at some of the highlights.

Sheila Lambowitz, director of CMS’ Division of Institutional Post-Acute Care,began the call with a discussion of the SNF PPS proposed rule, which was put on display April 29 and published in the May 6 Federal Register. She explained that CMS did not propose a rate setting methodology in the proposed rule for fiscal year (FY) 2012. Instead, CMS included lengthy discussions about the two options they are considering. They did this because the past year was not a typical year and changes in the payment system need to be made. In a typical year, the rate setting methodology is pretty straightforward. This is not a typical year because we’ve had major changes recently, such as the recalibration of rates in FY 2010 due to refinements made in 2006 that created an excess in budget neutrality, as well as the implementation of MDS 3.0 and RUG-IV.
“When we introduce new classification system, we try to do in a budget neutral manner. We want to make sure there are no steep drops or increases in payment simply because we changed the payment system,” Lambowitz said. “This year, we were not terribly successful in doing that. There were sharp spikes in payments made to nursing homes under RUG-IV that exceeded budget neutrality by a very significant amount.”
CMS’ originally projected that the payment days in the ultra high rehab category would go down when we switched from RUG-III to RUG-IV due to the changes made to concurrent therapy and the inability to count things that occurred prior to admission.
However, this did not happen.
“Instead, we found the same 43%, approximately, was being calculated in ultra high rehab categories under RUG-IV, because providers changed method they used to provide therapy,” Lambowitz said. “In the past, we saw an approximate 25% and 75% split between individual and concurrent. Now we are seeing almost no concurrent therapy, nearly 90% individual, and the rest in group.”
So CMS needs to recalibrate the system in FY 2012 so the payments would meet the budget neutrality model. This is where the two new models come from.
Read more on MDSCentral.

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