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  • CMS Proposes 1% Increase for IRFs, SNFs; Seeks Comment on New SNF Case-Mix System

    Inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNF) would each see a 1% payment increase from the Centers for Medicare and Medicaid Services (CMS) in FY 2018 under proposed rules now open for comment. The rules also make changes to areas ranging from reporting to value-based purchasing and were accompanied by a separate call for comments on a CMS proposal that would drop the current Resource Utilization Groups (RUG) system in favor of a revamped case-mix methodology for the SNF prospective payment system (PPS).

    APTA will provide comments on all 3 proposals before the June 26 deadlines. Here are some highlights from each of the 3 proposals.

    IRF Prospective Payment System

    • The 1% increase represents an $80 million increase in IRF payments for FY 2018.
    • CMS will continue its "rural adjustment transition," a phase-out of the 14.9% adjustment for 20 IRF providers who were designated as rural but were reclassified as urban under new definitions. Fiscal year 2018 will be the last year for the adjustments.
    • The "60% rule"—a requirement that in order to receive payment, 60% of an IRF's patients must require treatment for 1 or more of 13 conditions—is being tweaked. The proposed rule addresses diagnoses for patients with traumatic brain injury and hip fracture, identifies multiple trauma codes that didn't translate between ICD-9 and ICD-10, and removes nonspecific and arthritis diagnosis codes as well a code for myopathies.
    • Under the proposed rule, IRFs would report standardized patient assessment data across 5 categories: functional status; cognitive functions; impairments; medical conditions and comorbidities; and special services, treatments, and interventions.
    • CMS is also asking for comments on its qualifying conditions for IRF payments, as well as on ways to make the Medicare system "more efficient, flexible, and transparent."
    • Details on the proposed rule (.pdf) are available in the Federal Register. CMS has also produced a fact sheet on the proposal.

    SNF Proposed Payment System and Consolidated Billing, Value-Based Purchasing Program, and Quality-Reporting Program

    • The 1% increase represents a $390 million increase in SNF payments for FY 2018. That's less than last year's 2.4% increase, mostly due to requirements that the FY 2018 increase could not exceed 1% in order to help offset the cost of the Medicare Access and CHIP Reauthorization Act (MACRA) passed in 2017, which, among other things, repealed the flawed "sustainable growth rate" system.
    • Emphasis on quality-reporting continues, with CMS proposing that SNFs that do not meet quality-reporting standards risk a 2% reduction to the FY 2018 increase, amounting to a -1% adjustment.
    • The proposed rule would replace the current pressure ulcer quality-reporting measure with an updated version and add 4 new measures that would go into effect in FY 2020: change in self-care, change in mobility, discharge self-care, and discharge mobility. Also beginning in FY 2020, SNFs would be required to report patient data on functional status; cognitive function; impairments; medical conditions and comorbidities; and special services, treatments, and interventions.
    • CMS also introduced more detail on value-based purchasing (VBP) program requirements that will go into effect in 2019. Under the proposed rule, performance-related provisions that could withhold Medicare Part A payments based on a SNF's rehospitalization rates and level of improvement will be based on the data beginning January 1, 2017. SNFs could earn back between 50% and 70% of the withheld payments.
    • CMS is also asking for comments on whether social risk factors should be accounted for in the VBP program, both in terms of methodology and to better understand which social risk factors might be most appropriate for linking to risk adjustments for a particular measure.
    • Details on the proposed rule (.pdf) are available in the Federal Register. CMS has also produced a fact sheet on the proposal.

    SNF PPS and Consolidated Billing: Revisions to Case-Mix Methodology

    • CMS has issued an "advance notice of proposed rulemaking." Translation: no formal proposed rule has been issued, but CMS is definitely moving in that direction and wants more input before finalizing a proposal. The new case-mix system could be proposed by as early as FY 2019.
    • At issue: the possibility of replacing the current RUG Version 4 case-mix classification model with a new model called the Resident Classification System, Version I, known as RCS-I (read background on development of the model). The goal, according to CMS, is to make payment better reflect the complexity of the patients served by the SNF.
    • CMS aims to increase its emphasis on individual therapy by setting 25% limits on both concurrent and group therapy and is considering making the concurrent therapy cap discipline-specific.
    • The refocusing on specific resident characteristics would likely result in a shift in payment away from residents who are receiving frequent therapy under the current SNF PPS to residents with more complex clinical needs, according to CMS.
    • CMS is asking for comments on the proposed change—including what it acknowledges as a possibility that SNFs may be incentivized to reduce therapy services to increase margins under the RCS-I system.
    • Details on the proposal are available in the Federal Register. CMS has also produced a fact sheet on the case-mix proposal.


    • I just attended a conference regarding RCS and they speakers (non-rehab) were pushing the idea of 15 minutes of skilled therapy and 45-60 minutes of "therapy" with a rehab aide or tech. I couldn't believe it! What can I do or who can I call to fight against this change? Thank you.

      Posted by Carmela Martin on 8/14/2017 2:58 PM

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