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Senior and Post-Acute Healthcare News and Topics

SNF Proposed Rule for 2020

Spring is the time when CMS starts dropping Proposed Rules for various health care provider segments.  This past week or so saw update drops for IRFs, Hospice and SNFs.  Recall, Proposed Rules are administrative law changes that CMS makes to existing provider regulations, typically covering reimbursement and some programmatic policy changes that tie to reimbursement.  Congress does not have to approve or weigh-in other than through the appropriation function, defining the amount of spending globally, allowed under Medicare. The translation thereof to rates, payments, programs, etc. is via CMS rule making authority.  I’ll summarize other industry segments in a follow-up post later in the week.

The SNF proposed rule is best characterized as “mostly” good news.  The best news is the proposed market-basket (rate inflation) update of 3%. Subtracting the productivity factor of .5% from the update, SNFs will see a rate increase of 2.5% starting on October 1 (assuming the rate remains as proposed once the Final Rule is issued).  How this will exactly map to revenue however, is where the “mostly” qualifier is required.

A rate increase is merely an inflationary adjustment to the payment categories under Medicare. In the case of SNFs, the translation will take place in PDPM.  Under RUGs IV, the SNF rates would inflate by the applicable percentage, applied to each of the 66 groups.  Under PDPM, the base rate corresponds to one of six case-mix categories (PT, OT, Speech, Nursing, Non-Therapy Ancillary and Non-Case Mix), multiplied by the applicable case-mix value in each category (excluding non-case mix which is a flat per diem). There are ten clinical categories under PDPM that correspond to the reason that patient is admitted to the SNF (Major Joint Replacement or Spinal Surgery; Cancer; Non‐Surgical Orthopedic/Musculoskeletal; Pulmonary; Orthopedic Surgery (Except Major Joint Replacement or Spinal Surgery); Cardiovascular and Coagulations; Acute Infections; Acute Neurologic; Medical Management; Non‐Orthopedic Surgery).  Using the diagnosis code and patient functional status from Section GG on the MDS, a case-mix value is determined for each of the five categories (not non-case mix).  In the end, it will be difficult for the SNF to see a direct relationship, as in years past, with a rate adjustment and the current (soon to be former RUGs) payment model.  PDPM, even with the best modeling, is an unknown element for the SNF industry.  In short, there is no correlation between this proposed 2.5% increase and what a SNF will see in terms of revenue come October 1.  It is quite possible that some will see, even with the rate increase, a decrease in Medicare total revenue compared to current experience.

Another subtle but important element to consider, one that falls outside of this Medicare policy, is Medicare Advantage.  This Proposed Rule only impacts the fee-for-service side of Medicare, not translating to Medicare Advantage rates paid by plans to SNFs.  Such is the same concerning PDPM.  Medicare Advantage plans do not need to implement rate increases, PDPM or follow CMS reimbursement protocols for any provider segment.  For SNFs that have a high percentage of Medicare Advantage patients as part of their routine census, the impact of this proposed rate increase must be factored against the Medicare Advantage patient volume (e.g., 50% Medicare census that is Med Advantage reduces the rate increase realizable by the SNF, by half).  I am not seeing much rate increase activity on the part of the Medicare Advantage plans in any major market.  The supply of willing SNFs to take their patients exceeds by a large amount, the demand within these plans, for SNF access.  In other words, prices don’t need to increase to gain access, when needed.

Other programmatic updates/changes within the Proposed Rule for SNFs are as follows.

  1. CMS is proposing to align the “Group Therapy” definition for SNFs to the one used for IRFs.  Presently, the SNF definition for group is “four patients”; exactly.  The change will allow “group” to be any number between two and six.  Important Note of Caution: Assuming this definitional change remains, SNFs must not adopt a group therapy practice that immediately accommodates the maximum.  Group is an appropriate therapy treatment option when and only when, clinically warranted by the patients being treated in this setting.  I am hearing way too many therapy companies tout cost control, productivity management, etc. under PDPM via a sweeping expansion of group therapy (not readily usable under the current RUGs system).  Remember, if the SNF patient needs and clinical requirements prior to October 1 were for individual therapy, those same needs will apply post-October 1 and PDPM. CMS has warned providers against wholesale shifts in therapy treatment methodologies and time/minutes (reductions).  Facilities need to be very careful as it is unlikely that their census mix (case mix, acuity, etc.) will change after October 1 and thus, the provision of therapy should be fundamentally the same under PDPM.
  2. The Value-Based Purchasing measurement model for readmissions is shifting from “all cause” to “potentially preventable” as the metric.  As before, CMS is using a two percent withhold in SNF Medicare payments to build a pool for performance incentives under the program.  Sixty percent of the funds withheld will be distributed to high-performing facilities as “a bonus percentage” going forward.  In the first realization of incentives/penalties under VBP, 73% of all SNFs failed to perform at the standardized readmission benchmark and are presently, having their reimbursement reduced on a penalty basis.
  3. The SNF QRP (quality reporting program) is gaining two additional measures: Transfer of health information from the SNF to another provider, and; Transfer of health information from the SNF to the patient.  Both measures are interoperability related designed to impact the flow of information between providers and patients to encourage enhanced productivity and safety.  In addition, CMS proposes to add a number of standardized patient assessment data elements that assess cognitive function and/or mental status, special services, treatments and interventions, medical conditions and comorbidities, impairments, or social determinants of health (race and ethnicity, etc.).  Recall, the SNF QRP imputes a two percent reduction in rate inflation to facilities that don’t report data or stay current.  This means that for this year, a facility can see the rate increase of 2.5% proposed, reduced to .5% for non-reporting.

The full proposed rule is available at this link : https://www.federalregister.gov/documents/2019/04/25/2019-08108/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities

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April 22, 2019 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

PDPM Webinar: Last Call

Tomorrow, Dean Freeland, PT and I are hosting/conducting a webinar on PDPM and Therapy Contracts.  Dean’s a partner of mine so the event/production will give all participants a chance to learn and get the latest tips and strategies on Medicare’s new payment system for SNFs from two perspectives; therapy and overall policy and operations.  Don’t miss this one as it will be interesting, informative and fun!

Register here: http://hcmarketplace.com/pdpm-therapy-contracts

February 5, 2019 Posted by | Uncategorized | , , , , , , | Leave a comment

Governance and PDPM: What Boards Need to Know

I spend a good (ok, large) amount of time working with non-profit and privately held health care, post-acute and seniors housing organizations.  Nearly all of my work is at the C-level and above and frankly, my career as an executive was there as well (25 plus years).  Boards/governance bodies play a key role in the success and/or failure of an organization.  The same also mitigate or increase risk to the organization, depending on their behavior.   I have witnessed bad boards absolutely devastate once great, market dominant organizations simply through their failure to stay structurally in-tune with industry trends, market conditions, public policy, and patient care and service requirements (from compliance to outcomes and satisfaction).  Naïve, insular and narrowly focused Boards have taken down some of the largest and most prominent companies in any industry.  Health care, with its unique ties to government programs (Medicare, Medicaid, etc.) and regulatory structures, requires a governance model that reflects the industry challenges and mitigates the risks inherent in regulated, reimbursed health care.

Boards have as their primary duty, a fiduciary obligation to the organization.  This duty is best described as an obligation to act and behave solely, in the best interest of the organization and its shareholders/stakeholders.  In non-profit parlance: best interest in the mission of the organization.  To be an effective fiduciary then, the Board must seek to eliminate conflicts of interest and to learn about the risks or potential harms that are inherent to the organization via the business it is in.  The common definitions associated with a Board’s fiduciary obligation is the duty of care, the duty of loyalty and the duty of obedience.  Simply,

  • Duty of Care:  To act as a prudent person and to be engaged in their duties as Board members in the preservation and protection of the organization.  The actions include attending meetings, reading, questioning, and obtaining industry education
  • Duty of Loyalty: Removing self promotion and personal interest (including personal business interest) from Board duties/responsibilities.  Acting only in the collective best interest or the organization and its mission/shareholder/stakeholders.
  • Duty of Obedience: To assure the organization is compliant with all federal, state and local laws and is conducting business in a compliant manner with other rules and regulations as applicable (e.g., bond/debt  covenants).

With PDPM about to change the entire Medicare fee-for-service reimbursement program for SNFs while presenting broader payment change implications (down the road) for Medicare Advantage and even Medicaid (note that Medicaid payment systems always trend-off Medicare programs), Boards need to start NOW to understand PDPM and its certain, organizational impacts.  Each of the above “duties” are in-play but most acutely, the duty of care and the duty of obedience.

To maintain clarity and a certain amount of brevity and readability, below is my Board education/implementation framework for PDPM.

  1. What is PDPM? Explain at a macro-level what the new program impacts (Medicare A, fee-for-service) and how it works compared to the current Medicare RUGs-based system.  I would avoid the jargon and technical while sticking to the core differences.
    • Differences in patient classification and payment level assignment
    • Differences in the role of therapy and the payment thereof
    • Variable payment differences
    • Clinical incentives and behavioral changes
  2. PDPM Impact for the Organization, Part 1? What should the Board know about how PDPM will impact the organization.
    • Revenue impact?  The Board should see and understand, quantified revenue impacts.  Note: Organizations should be modeling the changes NOW to their reimbursement
    • Any technology changes and investments that are necessary prior to October 1
    • Any staff changes, staff education costs, need to budget for consultants, etc.
    • Changes in therapy contracts or therapy provision necessitated by PDPM
    • Changes in care delivery and why such as more group and concurrent therapy, shorter lengths of stay, possible change in clinical acuity
  3. PDPM Impact for the Organization, Part 2? What the Board should know that doesn’t change under PDPM?
    • No changes to other payer sources and programs expected (e.g., Medicare Advantage)
    • No compliance or regulatory changes (survey regulations)
    • No other program changes such as QRP, VBP, etc.
    • No impact to other services or programs the organization may have (home health, hospice, Assisted Living, Pace, etc.)
  4. PDPM Risks: What to Monitor? The Board needs to assure that the organization’s preparation for PDPM and the changes will be implemented and managed such that the organization will stay compliant with all applicable laws, rules and requirements.
    • Will the revenue changes impact bond/debt covenants (negatively)?
    • How will therapy provision be monitored, especially if therapy is provided via a contractor?  CMS has warned that drastic changes in minutes provided and/or treatment levels (from almost exclusively 1 to 1 to group and concurrent) will lead to targeted audits and potential penalties
    • Revenue changes not adequately predicted to the Board
    • Patient satisfaction changes (negative).  PDPM places a premium on efficiency of stay, especially given the variable payment dynamic.  Will care be complete and patients satisfied or will corners be cut adversely impacting satisfaction?
    • Compliance changes (adverse) or performance changes adverse due to PDPM. Has the organization’s performance metrics such as rehospitalizations, falls, infections rates, etc. changed? Any adverse survey changes or serious citations occurred? The Board must be actively engaged in QAPI and should be monitoring quality of care data
    • Budgets and investments met/made to assure smooth and supportive transition to PDPM
  5. PDPM: Other? The Board should require periodic updates across an extended period of time on how the transition to PDPM has impacted the organization, positively and negatively.  Similarly, as with all other major industry changes, PDPM should impact strategic plans and the same, should adjust for the impact PDPM will have.

Given that PDPM will implement October 1, organizations that haven’t at least begun Step 1 above are behind.  Step 2 should occur ASAP, especially since many organizations will likely see some negative revenue impact, if they have a disproportionate Medicare book of therapy of ultra-high RUGs and longer lengths of stay.  Any organization with a therapy contract (not employed, in-house) will need to get into discussions NOW regarding PDPM and their contract terms.  PDPM changes are sweeping and shouldn’t be ignored and/or, under sold and misconstrued to the Board or governing body.  The risks are too great and the organizational peril, too high.

 

January 31, 2019 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

PDPM and Therapy Contracts Webinar

On February 6 at 1:00 PM eastern, my rehab specialty partner Dean Freeland, PT and  I will be conducting a webinar on PDPM and Therapy.  This live (and recorded) event will cover the new SNF Medicare fee-for-service reimbursement program (PDPM) going into effect on October 1 of this year.  As the new system substantially changes how SNFs are paid under Medicare, we will review preparation strategies and contract strategies for SNFs that use rehabilitative therapy contractors for PT, OT, and Speech.  Even if your SNF is using in-house/employed therapists, this webinar is worthwhile as we will cover the mechanics of payment categories and the nuances of PDPM that are critical to capturing the proper levels of reimbursement.

To participate in this event/program, click on the link below for registration details.  Hope you all can attend!

http://hcmarketplace.com/pdpm-therapy-contracts

 

January 28, 2019 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

Leading Age Annual Meeting

I will be in Philadelphia for the annual meeting and conference of Leading Age.  For readers that plan on attending, I will also be speaking on Wednesday, October 31st.  Session information is below.

126-H: A Compliance Tale: The Journey from Citation to IDR

The session covers a complete review of an actual case/event our compliance folks dealt with regarding a citation and the steps/processes up to and through, an IDR hearing.  The audience will judge the final outcome of the IDR process.  Attendees will have access after the conference to some great tools/forms that are used and discussed during the session.  Hope to see you there!

October 19, 2018 Posted by | Uncategorized | Leave a comment

CMS Final SNF PPS Rule for 2019: Increases plus PDPM

Late this afternoon, I caught news that CMS will release a number of Final Rules impacting post-acute providers over the next few days.  Below is a quick summary of what is known for SNFs.  I will update this information as I get access to the Final Rule.

  • PPS rates (manual) to adjust by 2.4% (increase).
  • A final version of PDPM is included in the Final Rule.  Implementation steps including dates won’t be known until the Final Rule is issued and likely, there will still be some “fill-in-the-blanks” that will be later developed and issued. The good news is that the assessment and documentation changes that were part of the PDPM proposal remain.
  • There will be some quality measure changes forthcoming as CMS’ Meaningful Measure Initiative is tasked with weighing cost vs. benefit across provider measures.  It will be some time however, before it is clear which measure changes will occur and the impact.  Important to know: Changes in meaningful measures impact QRP and ultimately, Value Based Purchasing/Pay for Performance for providers.  It is important that SNFs pay close attention to these measures as their use is beyond reporting; now reimbursement correlated and compliance correlated as well (new survey process is very similar in many ways to QIS – data driven).

More information on this topic once the Final Rule is public.

July 31, 2018 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

CMS Proposes New SNF Payment Model

Last Friday, CMS released the contents of its annual proposed rule updating the SNF PPS plus (as always), fine tuning certain related programmatic elements. Final Federal Register Publication is set for May 8.  (Anyone wishing the PDF version may download it from the Reports and Other Documents page on this site or access it here SNF Proposed Rule 4 2018 ).  The most watched information for providers is the proposed rate adjustment though lately, for the post-acute segments of health care, other elements pertaining to payment model changes have eclipsed rate “watching”.

Last year’s proposed rule for the SNF PPS contained the release of RCS-1.  After extensive commentary, CMS pulled back RCS-1, shelving it for some conceptual remake.  We now, as of Friday, know the remake – PDPM for short (Patient Driven Payment Model). As with all yearly releases similar, a comment period has begun, lasting until (if not otherwise extended) the last week of June (June 26).

PDPM as proposed, is designed to replace the current SNF payment methodology known as RUGs IV.  Unless date changes, etc. are made by CMS post commentary review, the effective date of the change (from RUGs to PDPM) is 10/1/19 (next October).   PDPM as an outgrowth of RCS-1 and received commentary, is a simplified payment model designed to be more holistic in patient assessment, capture more clinical complexity, eliminate or greatly reduce the therapy focus by eliminating the minute levels for categorization, and simplifying via reduction, the assessment process and schedule (reduced to three possible assessments/MDS tasks). Below is a summary of PDPM core attributes/features as proposed.  On this site in the Reports and Other Documents page is the PDPM Calculation Worksheet that provides additional details beyond the reference points below PDPM Calculation for SNFs.

  • PDPM uses five, case-mix adjusted components for classification and thus, payment: PT, OT, Speech, Non-Therapy Ancillary and Nursing.
  • For each of these components, there are separate groups which a resident may be assigned, based on MDS data.  For example, there are 16 PT groups, 16 OT groups, 12 Speech groups, 6 Non-Therapy Ancillary groups and 25 Nursing groups.
  • Each resident, by assessment, is classified into one of the group elements within the component categories. This means that every resident falls into a group within the five case-mix components of PT. OT, Speech, Non-Therapy Ancillary and Nursing.
  • Each separate case-mix component has its own case-mix adjusted indexes and corresponding per diem rates.
  • Three of the components, PT, OT and Non-Therapy Ancillary have variable per diem features that allow for changes in rates due to changing patient needs during the course of the stay.
  • The full per diem rate is calculated by adding the PT, OT, and Non-Therapy Ancillary rates (variable) to the non-adjusting or non-variable Nursing and Speech components.
  • Therapy utilization may include group and/or concurrent treatment sessions provided no more than 25% of the total therapy utilization (by minutes) is classified as group or concurrent.
  • PT, OT, and Speech classification by group within their respective components do not include any function of “time”.  The sole denominator of how much/little therapy a resident receives is the necessity determined by the assessment process and by the clinical judgment of the care team.  In this regard, the minimum and maximum levels are based on resident need not on a predetermined category (RUG level).
  • Diagnoses codes from the hospital on admission (via ICD-10) are important and accuracy on the initial MDS (admission) are imperative.
  • Functional measures for Therapy (PT, OT) are derived from Section GG vs. Section G as provided via RCS-1.
  • The Non-Therapy Ancillary component allows facilities to capture additional acuity elements and thus payment, for additional existing comorbidities (e.g., pressure ulcers, COPD, morbid obesity, etc. ) plus a modifier for Parenteral/IV feeding.
  • There are only three Medicare/payment assessments (MDS) required or predicated starting in October of 2019 – admission, change of condition/payment adjustment and discharge. NOTE: All other required MDS submissions for other purposes such as QRP, VBP, Quarterly, etc. remain unchanged.

For SNFs, the takeaways are pretty straight-forward. First, clinical complexity appears to be the focus of increased payment opportunity.  Second, therapies are going to change and fairly dramatic as utilization does not involved minutes and more is better, when clinically appropriate but less is always relevant (if that makes sense).  The paperwork via MDS submissions is definitely less but assessment performance in terms of accuracy and clinical judgment is increased.   MDS Coordinators, those that are exceptional clinicians and can educate and drive a team of clinicians, will be prized as never before.  RUG style categorization is over so the focus is not on maximizing certain types of care and thus payment but on being clinically savvy, delivering high quality and being efficient.  The latter is what I have been preaching now for years.  Those SNFs that have been trending in this direction, caring for clinically complex patients, not shunning the use and embrace of nursing RUGs, and being on the ball in terms of their assessments and QMs are likely to see some real benefits via the PDPM system.

More on this new payment model and strategies to move forward will be in upcoming posts.

May 1, 2018 Posted by | Policy and Politics - Federal, Skilled Nursing, Uncategorized | , , , , , , , , , , , , , | Leave a comment

Upcoming Webinar: Reduce Citation Risk

SNFs are just a little past one year since the new Conditions of Participation were implemented along with a new survey process.  Today, we are in the first-full quarter of Phase 2 implementation and facilities are just now getting surveyed on these requirements. As a result, we have some data on how the new survey process is going, what facilities are experiencing in terms of citations, how survey teams are looking at Phase 2 requirements, etc.

On Wednesday, March 7th I will be joined by Diane R. Hislop, RN, H2 Healthcare’s compliance expert and Senior Partner, presenting a webinar on the Phase 2 aspects of the SNF Conditions of Participation, the new survey process and how facilities can reduce citation risk.  The webinar will last an hour and there are some great handouts and tools that Diane has agreed to share with all participants.  I hope you can join me and Diane for what will be, an exceptionally informative update on SNF surveys and compliance trends.

The registration link is here:

http://hcmarketplace.com/reduce-citation-risk

February 14, 2018 Posted by | Uncategorized | , , , , , , , | Leave a comment

Happy New Year!

Welcoming in 2018 with a bunch of new content and enough cold weather and limited travel over the next month to get some new posts up.  I apologize to the loyal readers and subscribers that have patiently waited for new content.  A horrendously busy (non-typical) end of the year limited my writing/composing time.  Thanks for waiting and stay-tuned; plenty of new stuff forthcoming.  Happy New Year!

January 15, 2018 Posted by | Uncategorized | , | Leave a comment

Leading Age Annual Meeting

For those readers that have been dropping me notes – YES, I will be in New Orleans next week at the Leading Age conference. I will be there Monday and Tuesday, presenting Tuesday morning with a team. Our session is from 10:00 to 11:30: Care Coordination Model for Improved Outcomes and Satisfaction. Diane Hislop RN, H2’s Senior Partner and clinical compliance expert is part of the team of presenters. Those in attendance will receive a great bonus! We are providing zip drives to the first 300, loaded with forms, clinical pathways (respiratory, ortho, and more), care coordination materials, etc. from the presentation.

Catch me and Diane at the session or drop me a note on this site or via my mobile mail at hislop3@msn.com and we will try to connect.

October 26, 2017 Posted by | Uncategorized | , , , | Leave a comment