Medicare:
Survive Today And
Prepare For Tomorrow
Monday October 11, 2010
1
Today and Tomorrow Is All About
Health Care Reform
Elise Smith
Vice President, Finance Policy
American Health Care Association
2
Health Care Reform Balancing Act
Coverage
Expansion
Improvement
in Quality
Cost
Containment
3
Cost Containment Strategy
• Direct -- Continue to Address and Improve Current
Methodologies
– PPACA holds down increases in adjustments to provider payments in
all categories
– Silo coverage and payment methodologies will continue as long as
they must
– Future quality measurement will build on silo quality measurement
• Indirect -- Improve medical care delivery and improve health
outcomes through:
– Development of new care delivery systems. E.g. bundling, accountable
care organizations etc.
– Integration
– Co-coordination
– Co-operation
4
The A Team!
• Peter Gruhn
-- RUG-IV: Selected Issues and Opportunities
• Joy Morrow
-- MDS 3.0 and Operational Issues
• Pat Newberry
-- Operationalizing MDS 3.0 and RUG-IV
• Peter Gruhn
-- What’s Ahead For SNF Reimbursement
• Bill Ulrich
-- Critical Current Billing Issues and More
• Jill Mendlen
-- The Future!
5
RUG-IV:
Selected Issues and Opportunities
Peter Gruhn
Director of Research
American Health Care Association
6
RUG-IV: Realizing Opportunities
• The New RUG-IV: But Don’t Forget HR-III
• RUG-IV: Selected Issues and Opportunities
• Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
7
The New RUG-IV
• Under RUG-IV, CMS will modify the eight levels of the
RUG hierarchy and increase the number of case-mix
groups from 53 to 66 in order to better distinguish
between relative resource use both within and
between RUG groups
• CMS believes that the new RUG-IV system will be more
sensitive to differences in patient complexity and the
SNF resources needed to provide quality care
• CMS believes that RUG-IV better targets payments to
beneficiaries with greater needs
– Improved accuracy of Medicare payments
– Access to high quality SNF care will be maintained
and enhanced
8
The New RUG-IV
• RUG-IV will be implemented in a budget
neutral manner
• While budget neutral, RUG-IV will significantly
affect the distribution of payments across a
significantly regrouped and modified RUG-66
grouper
• However…
9
…But Don’t Forget About HR-III
• FY 2010 Final Rule:
– MDS 3.0 and RUG-IV implementation on Oct 1, 2010
• Patient Protection Affordable Care Act (ACA):
– Mandated implementation of MDS 3.0 for FY 2011
– 1 year delay in implementation of RUG-IV FY 2012
– Implementation of selected RUG-IV elements as
originally set for FY 2011
(concurrent therapy and look-back changes)
10
RUG-IV versus HR-III
• Issues:
– RUG-IV designed to be implemented with MDS
3.0
– RUG-III incompatible with MDS 3.0
– Need to modify RUG-III and develop grouper to
utilize MDS 3.0 to include RUG-IV elements
– Hybrid RUG-III (HR-III) PPS and grouper will not
be ready for implementation on Oct 1, 2010
11
RUG-IV versus Hybrid RUG-III
• Response:
– CMS plans to apply interim payment rates based on
MDS 3.0 and RUG-IV effective Oct 1, 2010
• This way providers can be paid
– Once the necessary infrastructure is in place, CMS will
retroactively adjust the rates to reflect HR-III
• SNF may need to resubmit claims using HR-III grouper
– HR-III will also be implemented in a budget neutral
manner
– Legislation is pending in Congress to repeal HR-III, and
proceed with implementation of RUG-IV as specified in
last year’s final rule
12
RUG-IV:
Selected Issues and Opportunities
•
•
•
•
RUG-III/RUG-IV: Changes in Distribution
Payment Rate Changes: Issues and Opportunities
Therapy Contracting: Issues to Consider
Assessment Window Pitfalls
13
RUG-IV: Issues and Opportunities:
Changes in RUG Grouping/Distribution
RUG Category
Total Rehab
Rehab + Extensive
RUG-III
90.2%
39.0%
RUG-IV
82.6%
4.0%
HR-III
82.6%
18.4%
Rehabilitation
Extensive Services
Special Care
51.3%
3.7%
2.6%
78.6%
0.9%
8.9%
64.3%
5.9%
3.9%
Clinically Complex
Behavioral & Impaired
Reduced Physical Function
2.7%
0.2%
0.6%
4.7%
0.5%
2.4%
5.2%
0.3%
2.0%
14
RUG-IV: Issues and Opportunities:
Changes in RUG Grouping/Distribution
• RUG-III to RUG-IV: Factors
–
–
–
–
–
Concurrent therapy adjustment
Pre-admission lookback
ADL scale and scoring
Recategorization
Other (No Section T, SOT OMRAs, Short stay policy)
• RUG-III to HR-III: Factors
– Concurrent therapy adjustment
– Pre-admission lookback
• Resource: AHCA Medicare RUG-IV Rate Calculator
15
RUG-IV: Issues and Opportunities:
RUG-IV & (Urban) Payment Rates
RUG-III
(FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
RUX
Rate
$617.07
Rate
$869.42
% Diff
40.9%
Rate
$722.05
% Diff
17.0%
RUC
$528.59
$634.27
20.0%
$602.11
13.9%
RVX
$467.62
$786.66
68.2%
$552.75
18.2%
RVC
$421.05
$551.51
31.0%
$489.62
16.3%
RHX
$395.59
$722.91
82.7%
$473.21
19.6%
RHC
$364.54
$487.76
33.8%
$432.18
18.6%
RMX
$448.67
$668.30
49.0%
$552.43
23.1%
RMC
$335.36
$434.73
29.6%
$399.34
19.1%
RLX
$318.88
$593.60
86.2%
$390.48
22.5%
RLB
$294.04
$431.05
46.6%
$355.76
21.0%
16
RUG-IV: Issues and Opportunities:
The Lookback Effect & (Urban) Payment Rates:
The Lookback Effect
RUG-III
(FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
Rate
$869.42
% Diff
Rate
$722.05
% Diff
RUX
Rate
$617.07
RUC
$528.59
$634.27
2.8%
$602.11
-2.4%
RVX
$467.62
$786.66
RVC
$421.05
$551.51
RHX
$395.59
$722.91
RHC
$364.54
$487.76
RMX
$448.67
$668.30
RMC
$335.36
$434.73
RLX
$318.88
$593.60
RLB
$294.04
$431.05
$552.75
17.9%
$489.62
4.7%
$473.21
23.3%
$432.18
9.2%
$552.43
-3.1%
$399.34
-11.0%
$390.48
35.2%
$355.76
11.6%
17
RUG-IV: Issues and Opportunities:
Concurrent Therapy & (Urban) Payment Rates:
RUG-III
(FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
RUC
Rate
$528.59
Rate
$634.27
% Diff
20.0%
Rate
$602.11
% Diff
13.9%
RVC
$421.05
$551.51
31.0%
$489.62
16.3%
RHC
$364.54
$487.76
33.8%
$432.18
18.6%
RMC
$335.36
$434.73
29.6%
$399.34
19.1%
RLB
$294.04
$431.05
46.6%
$355.76
21.0%
18
RUG-IV: Issues and Opportunities:
Concurrent Therapy & (Urban) Payment Rates:
RUG-III
(FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
Rate
$634.27
% Diff
Rate
$602.11
% Diff
RUC
Rate
$528.59
RVC
$421.05
$551.51
4.3%
$489.62
-7.4%
RHC
$364.54
$487.76
15.8%
$432.18
2.6%
RMC
$335.36
$434.73
19.3%
$399.34
9.5%
RLB
$294.04
$431.05
28.5%
$355.76
6.1%
?
19
RUG-IV: Issues and Opportunities:
The Lookback Effect & (Urban) Payment Rates
RUG-III
(FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
ES3 (SE3)
Rate
$361.62
Rate
$661.20
% Diff
82.8%
Rate
$460.76
% Diff
27.4%
ES2 (SE2)
$308.84
$517.58
67.6%
$388.17
25.7%
ES1 (SE1)
$276.24
$462.34
67.4%
$343.98
24.5%
CE2
$270.03
$361.34
33.8%
$336.09
24.5%
CE1
$248.30
$332.93
34.1%
$306.10
23.3%
…
…
20
Reimbursement Issues and Opportunities:
The Lookback Effect & (Urban) Payment Rates:
Extensive Services Qualifier Effect: IV Feeding
RUG-III (FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
Rate
ES3 (SE3)
Rate
$361.62
Rate
$460.76
ES2 (SE2)
$308.84
$388.17
ES1 (SE1)
$276.24
$343.98
HE1
$370.81
HD1
$348.71
HC1
$329.77
HB1
$326.62
21
Reimbursement Issues and Opportunities:
The Lookback Effect & (Urban) Payment Rates:
Extensive Services Qualifier Effect: IV Meds
RUG-III (FY2010)
RUG-IV (FY 2011)
HR-III (FY2011)
Rate
ES3 (SE3)
Rate
$361.62
Rate
$460.76
ES2 (SE2)
$308.84
$388.17
ES1 (SE1)
$276.24
$343.98
CE1
$332.93
CD1
$313.99
CC1
$277.69
CB1
$257.18
CA1
$219.30
22
Therapy Contracting: Issues To Consider
Nursing
Component
Therapy
Component
Non Case Mix
Component
Overall
RUG-III (FY 2010)
RUX
RMC
$274.76
44.5%
$166.10
49.5%
$263.09
42.6%
$90.04
26.8%
$79.22
12.8%
$79.22
23.6%
$617.07
100.0%
$335.36
100.0%
$80.54
9.3%
$80.54
18.5%
$869.42
100.0%
$434.73
100.0%
$80.54
11.2%
$80.54
20.2%
$722.05
100.0%
$399.34
100.0%
RUG-IV (FY 2011)
RUX
RMC
$566.57
65.2%
$288.81
66.4%
$222.31
25.6%
$65.38
15.0%
HR-III (FY 2011)
RUX
RMC
$374.03
51.8%
$227.26
56.9%
$267.48
37.0%
$91.54
22.9%
23
Assessment Window Alert
• Resident Therapy Delivery and the Assessment Window
• CMS’s concern:
– MDS does not accurately reflect the services needed by and
provided to the resident
• CMS’s guidance:
– “Therapy definitions and limitations must be applied
consistently whether or not the resident is in the assessment
window”
– “The therapy mode definitions must always be followed and
apply regardless of when the therapy is provided in
relationship to all assessment windows (i.e. applies whether
or not the resident is in a look back period for an MDS
assessment)”
24
Assessment Window Alert
• Issues:
– Possible inconsistency in therapy service delivery
between the MDS and medical record
– Invites medical review by MACs, RACs, surveyors
– Would there be overpayment recovery and
sanctions?
25
MDS 3.0 and Operational Issues
Joy Morrow, RN, PhD
Senior Clinical Consultant
Hansen, Hunter, & Co., PC
26
How long it takes to do MDS 3.0
• We believe published information is
inaccurate
• From our in the field practice the process is
longer
• BUT 3.0 is better
• Nurses like the relevance
• Residents like it
• Families like it
• I felt that I really knew the resident
27
Residents Must Be Interviewed
• Most residents will be able to be
interviewed
• Do not inaccurately presume that
resident cannot be interviewed without
a professional attempt
• This compliance issue will be surveyed
28
Presumption of Coverage
• The original material from Baltimore
sounded as if presumption of coverage
was gone
• Not true – we still have the presumption
with physician order for skilled service
that resident is skilled until day 8 of
skilled stay or ARD of 5-day assessment
whichever occurs first
29
Hospital Observation Issues
• Lack of 3 day qualifying stay
• SNFs have difficulty discerning observation
vs. inpatient
• Elderly are often not ready to be
discharged home and…
• They are not eligible for SNF Part A
• Hospitals not always forthcoming with
correct information re: observation stays
Most Beneficiaries Who Have Met
Qualifying Hospital Stay Criteria
• Meet the criteria for skilled care
• Administrative criteria – complexity of nonskilled conditions…
• Safety and stability…
• Need for skilled professional nursing care
• RUG IV qualifiers
• Skilled nursing facility that provides some rehab
• “Rehab facility” that rarely provides skilled
nursing
Look Back
• The questions that include look backs longer
than admission forward are for information
and care planning and overall clinical care
• They are not for reimbursement related to
services prior to the SNF admission
• Most look backs are 7 days unless designated
otherwise
• The top nine RUG categories will likely have far
fewer days
32
Extensive Services
• Since admission – trach and vent care
• Isolation for active infective respiratory
infection
• ADL score 2 or more
• Alone or combined with Rehab – not too
likely in most of our facilities
33
Setting the ARD
• MDS nurse must know the facility
payment rates
• Some nursing categories have better
payment than therapy categories
• All patient/residents do not need
therapy
• Enhance your skilled clinical nursing
services
34
Skilled Nursing
• Staff nurses must understand the clinical
services that they provide
• Accurate clinically appropriate
documentation is a must
• Skilled prompts & check list programs are
helpful IF the nurse is using clinical
thinking while documenting
35
Critical Clinical Thinking
• What services am I providing that require
skilled professional knowledge?
• What are the immediate health and
safety needs of this patient/resident?
• What are the co-morbidities that I must
consider and monitor?
• Does my documentation reflect these
professional considerations?
36
Default Payment Exceptions
• Remain in effect for allowed circumstances:
– Resident discharged during 1st 8 days
– Late assessment – default up to ARD
37
More Assessments – Quite a Few More
• Some assessments will require
sophisticated thinking to ensure
appropriate reimbursement
• Combined assessments will need careful
thought
• Split RUG assessments
38
Start of Therapy (SOT) OMRA
• Optional (even though called “required”)
• May be needed to get appropriate
reimbursement
• Is used to qualify resident for rehab RUG
• MDS will be rejected if the MDS does not
calculate to rehab category
39
SOT Details (cont.)
• Facility clinical management needs to
manage types of MDSs and communicate
with therapy
• The SOT assessment is shorter assessment
• Payment starts on first therapy day even
when only one therapy is starting
40
End of Therapy OMRA
• Required – establishes non-therapy RUG
when therapies are discontinued
• But skilled care continues.
• ARD must be set 1-3 days after all therapies
dc’d
• Payment is adjusted to non-therapy
• Which ARD you pick will NOT affect
payment
• Payment changes as of last day of therapy
41
Short Stay Policy
• Therapy is pro-rated based on average
daily therapy minutes actually provided
• Therapy minutes are divided between
the days that treatment minutes were
provided
• Treatment minutes must still meet the
15 minutes per day requirement
42
Short Stay Policy Includes 8 Requirements
for the Start of Therapy MDS
• It requires a competent MDS nurse who
considers the RUG categories
• Assesses the payment for each category
• Short stay policy may work best for stays
that are only 4 days or less
• Latest news from 3.0 facility practice…
43
Biggest Decision For CEO/DON
• Do I have the right person in the right job?
• Is each MDS nurse competent – exhibiting
critical clinical thinking?
• Is he/she willing to embrace the culture change
and really interview and examine each resident?
• Is each MDS nurse able to examine and interpret
RUG rates considering resident needs and
appropriate reimbursement?
• Does facility need to reassign some roles/tasks?
44
CEO/DON Must Understand
•
•
•
•
•
Complexity of 3.0
Transition time needed
Importance of performing job correctly
Correct number of MDS nurses
Difference between Medicare MDSs and
non-Medicare MDSs
• Considerations for case-mix states
45
Always Have Manual Open
•
•
•
•
Use the RAI manual with every MDS
Read the instructions
Read the MDS form instructions
Have a facility policy/guideline that
requires MDS nurses to use the RAI
manual
46
Concerns
• Since the SOT OMRA is optional, nurses
may tend to not do them
• We believe that more often than not this
will be detrimental to facility
reimbursement
• It is essential that you learn how to
combine the SOT OMRAs with the
regularly scheduled PPS assessments
47
The New Interviews Are Validated
• They are excellent tools
• You may need to look at competency of
staff to decide who should perform these
specific interviews.
• MSW vs. RN vs. well-trained social worker
with B.S. degree, etc.
• Do not rush resident to answer – let them
process the question – allow at least 30
seconds
48
Changes to ADL Scoring
• Must we verify 3 occurrences?
• If so, how should this be done?
• Will more effort be required re: ADLs
and documentation?
• (Rule of 3 does not apply to bathing)
49
ADL Documentation
• ADL flow sheets ???
• Computer programs – very good but training
and review are needed
• Interviews with direct care givers including
documentation of interview is very good
• Daily Part A documentation sheet with limited
important prompts might be a good tool
ADL Assistance does not include:
• Family
• Ambulance staff
• Wording has changed to state “staff”
51
Facility Responsibility Regarding
Therapy Services
• Facility must oversee therapy services
• That is, make sure that all medical comorbidities are being considered…
• …that the resident can tolerate the
length and duration of therapy
• That individual & other therapy is
performed appropriately
• That therapists are timing each
individual residents therapy time
• DON often performs this task
52
Concurrent Therapy (Sept 2010)
• The therapy mode definitions (individual,
concurrent, group), must always be
followed and provide regardless of when
the therapy is provided in relationship to
all assessment windows (i.e. applies
whether or not the resident is in a look
back period for an MDS assessment
• What does this mean?
53
Therapy Aides and Students
• Aides cannot provide skilled services
• Only the time an aide spends on set-up
for skilled services may be coded on the
MDS (i.e., set up the treatment area for
wound therapy) &
• This set up must be directly supervised
• Therapy students must have line-of-sight
supervision of the professional therapist
54
Determining Therapy Minutes
• Treatment starts when resident begins
first treatment activity or task
• Treatment ends when resident finishes
with last apparatus or intervention/task
• Count the total minutes including time
spent for a therapeutic purpose
• Do not include any other type of break in
the total minutes
• Do not round to nearest 5th minute
55
Restorative Nursing Program
• The Part A program is underutilized
• Appropriate for some at discharge from
hospital
• Very good for some who have completed
their more intensive therapy program…
• But needs further care to ensure safety &
stability prior to moving to a lower level of
care (assisted living, home, etc)
• (Transfers, toileting etc… round the clock)
56
Culture Change
• No more one hour comprehensive
assessments behind closed doors
• No more 5 minute or “no” minute resident
interviews
57
The MDS Assessment Is To Be Completed…
• …by face-to-face interview with resident
• …by face-to-face interview with staff &
family
• …by review of record
• An MDS may not be generated after the
resident is discharged (unless sudden death,
discharge)
• An MDS may not be generated from only a
review of the record
58
Care Tool (of the future)
• Standardized assessment across all
disciplines
• MDS will no longer be used
59
Latest News
• After “press” time
60
Life is Change …Growth is Optional
• Sophisticated, educated companies will
do alright with regulatory changes
61
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
Patricia Newberry
Executive Director of Clinical Reimbursement
UHS – Pruitt Corporation
62
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
RUG assignment
does not mean
skilled care criteria are met
63
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
RUG IV: 8 Classifications, 66 Groups
–
–
–
–
–
–
–
–
Rehabilitation Plus Extensive Services (9)
Rehabilitation (14)
Extensive Services (3)
Special Care High (8)
Special Care Low (8)
Clinically Complex (10)
Behavioral Symptoms and Cognitive Performance (4)
Reduced Physical Function (10)
64
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
• Key Changes:
– Change in Nursing Extensive and Rehab +
Extensive
– Hospital Look Back: Eliminated for all
except IV Fluids/Feeding
– Therapy Delivery System
– ADL Index: Level across each group
– Addition of Higher Nursing Acuity
65
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• Change in Nursing Extensive and Rehab +
Extensive
–
–
–
–
–
Ventilator / Respirator
Tracheostomy Care
Isolation for Infection Diseases – per CDC regulation
% of Rehab + Extensive service will drop to < 2%
Rates for these categories have increased
significantly
66
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• Hospital Look Back:
– Eliminated for all except IV Fluids/Feeding
pre admission
– All special services can be captured if
provided post admission: in house, ER, MD
office
67
Operationalizing MDs 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• Therapy Delivery System
– Individual – Group – Concurrent
• Impact on RUG level as well as increase in needed
rehab staff and clinical appropriateness of time in
Rehab
– Example: 50% Concurrent; 25% Group; 25% Individual
• RUG level RUB, 25%+ increase in staff time and resident in
rehab in active treatment 5 hours per day at 6 X week
– Example: 60% Individual; 20% Group; 20% Concurrent
• RUG level RUB, 10-15% increase in staff time and resident in
rehab in active treatment 3 – 3.5 hours per day at 6X week.
68
Operationalizing MDs 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• Assessment Changes
– Start of Therapy OMRA
– End of Therapy OMRA
– Short Stay
69
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• ADL Index: Level across each group
• Impact on Rehab RUGs:
– Nursing resources RxA vs RxB.
– Recognition of additional nursing resources
needed
70
Operationalizing MDS 3.0 and RUG-IV:
Realizing Opportunities
Key Changes:
• Addition of Higher Nursing Acuity
– COPD & SOB while lying flat
– DM and insulin orders and insulin injections
– Special Care High Categories
71
What’s Ahead For
SNF Reimbursement
Peter Gruhn
Director of Research
American Health Care Association
72
SNF PPS: What’s Ahead
• The Market Basket and Productivity
Adjustments
• The Market Basket and IPAB
• Recalibration (Future budget neutrality
forecast error projection)
• Part B Therapy Caps
• Non-Therapy Ancillary Services Index
• Wage Index
• Pay-For-Performance
73
Market Basket
• Market Basket
– Full market basket set in statute
– Could only be changed by Congress
– But PPACA allows IPAB to change starting in
fiscal year 2015
• Market Basket “Forecast Error”
– Applied when actual market basket index
and projected market basket index is 0.5%
or more different
74
PPACA Productivity Adjustment
• 10-year moving average of changes in the
annual economy-wide private nonfarm business
multi-factor productivity (as projected by the
Secretary for the 10-year period ending with the
applicable fiscal year, year, cost reporting
period, or other annual period)
• The most recent data from the Bureau of Labor
Statistics would indicate a 1.4% productivity
adjustment for skilled nursing facilities.
75
Productivity Adjustment
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Skilled nursing facilities – fiscal year 2012
Inpatient acute hospitals - 2012
Long-term care hospitals – rate year 2012
Inpatient rehabilitation facilities – fiscal year 2012
Home health agencies - 2015
Psychiatric hospitals – rate year 2012
Hospice care – 2013
Dialysis – 2012
Outpatient hospitals – 2012
Ambulance services – 2011
Ambulatory surgical centers – 2011
Laboratory services – 2011
Certain durable medical equipment – 2011
Prosthetic devices – 2011
76
Independent Payment Advisory Board
(IPAB)
• Develops and submits detailed proposals to Congress
and the President to reduce Medicare spending
• First set of recommendations due in 2014 for 2015
implementation
• HHS Secretary must implement IPAB’s proposals to
achieve savings unless Congress adopts alternative
proposals with equivalent savings
• IPAB must submit drafts of its proposals to MedPAC
and HHS for their review prior to submission to
Congress
• IPAB must engage in regular communications with
MACPAC.
77
IPAB’s Reach
• Can recommend payment adjustment only
for provider categories not already hit in
PPACA with market basket adjustments for
the given year
• For example, inpatient hospitals (DRG)
already have prescribed market basket hits
in addition to productivity adjustments for
several years – thus, IPAB has no authority
to adjust their rates
78
Recalibration
• In 2006, CMS refined the SNF PPS CMIs to better
account for resource use of medically complex patients
(RUG-53) using 2001 data
• CMS adjusted the nursing weights so that payments
under RUG-44 and RUG 53 would be the same
• In the FY2010 SNF PPS NPRM, CMS reported that
Medicare expenditures were higher under RUG-53
than they would have been under RUG-44 based on
actual 2006 data
• For FY 2010 CMS recalibrated the nursing weights such
that payments would be the same
• Payments for FY 2010 were estimated to decline by
$1.05 billion (about $16 ppd)
• Recalibration for RUG-III/RUG-IV transition in FY 2013?
79
Part B Therapy Caps
• PPACA of 2010 extended therapy caps exceptions
process through December 31, 2010
• Cap applies to OT services, and PT and SLP services
• CY 2010 cap: $1,860
• CY 2011 cap: TBD (Medicare Physician Fee Schedule)
• Will the exceptions process be extended?
80
Part B: Proposed MPPR Policy
• CY 2011 Medicare Physician Fee Schedule
(MPFS) notice of proposed rulemaking
(NPRM)proposed to expand the multiple
procedure payment reduction policy
(MPPR) to Part B therapy services
• CMS proposed to apply a 50 percent
payment reduction to the practice expense
(PE) component of the second and
subsequent therapy services for multiple
“always” therapy services furnished to a
single patient in a single day
81
Part B: Proposed MPPR Policy
• Issues and concerns:
– Inadequate notice and regulatory impact analysis
(insufficient information on methodology and data were
made available in the NPRM)
– CMS analysis flawed
• No data from institutional settings was used by CMS
– Underestimation of impact overall and on institutional
settings
– Incorrect insights on patterns of service delivery
• Duplication analysis flawed (RVU construction issue)
• PE and speech therapy
• Operational (billing and claim processing issues)
• Substantial advocacy effort by AHCA and other assoc
• Stay Tuned: CY 2011 MPFS final rule expected by Nov 1
82
Part B: Therapy Cap Alternatives
• CY 2011 MPFS NPRM asked for comment on
three potential alternatives to capping therapy
services
– Option 1: Collect better data on functional status and
severity of patient needs
– Option 2: Arbitrary caps coupled with denial of
payment
– Option 3: New intervention and complexity based
payment system
• AHCA submitted comments on the 3 options and
asked CMS to also examine a new episodic-based
PPS for Part B therapy services
83
Wage Index Reform
• Tax Relief and Health Care Act of 2006 (TRHCA)
mandated a revision to the IPPS wage index
• MedPAC made recommendations on an
alternative wage index methodology (2007)
• CMS contractor Acumen LLC evaluated and made
recommendations on revision/alternative
• CMS FY2011 IPPS NPRM requested comments on
Acumen recommendations
• CMS will take into account comments as it
evaluates recommendations/next steps
• Revised wage index for FY 2012? Stay tuned
84
Nursing Home Value Based Purchasing
(NHVBP) Demonstration
• 3 year demonstration to test whether a
performance-based reimbursement system can:
– Improve the quality of nursing home care
– Without increasing Medicare expenditures
• Demonstration offers financial incentives to
participating nursing facilities that demonstrate:
– The ability to provide high quality care and/or
– Improve the level of care they provide
• Demo began July 1, 2009
• Contactor: Abt and Associates
85
NHVBP Demonstration Update
• Demo must be budget neutral
• Incentive pool to be created from Medicare
savings achieved through higher quality care
• Eligible for incentive payments if have high
performance and/or show significant
improvement in the quality of care
• Savings computed at the state level
• Incentive payments to be distributed based on the
number of Medicare resident days
• If no savings, no incentive payments
86
NHVBP Demonstration Update
• Performance Measures
– Nurse staffing (level and turnover)
– Hospitalization rates
– MDS outcomes
– Survey deficiencies
87
NHVBP Demonstration Update
• Status:
– The Demonstration received approval in
November 2008 and is underway
– Data collection phase began in July 2009
– Baseline analysis complete
– Year 1 data collection complete
• 177 participants (38 AZ, 78 NY, 61 WI)
• Participation is voluntary
– Evaluation of Year 1 expected Summer 2011
– Data collection phase ends June 2012
– Final report due June 2013
88
NHVBP Demonstration Update
• Section 3006 of the ACA requires the Secretary
to develop a plan for a VBP program for SNFs
and HHAs
• Plan shall consider:
–
–
–
–
Selection of quality measures
Reporting, collection and validation of quality data
Structure of payments
Methods of public disclosure
• Report to Congress due October 1, 2011
89
Critical Current Billing Issues
and More
Bill J. Ulrich
President/CEO
Consolidated Billing Services, Inc
90
Summary of Current Events
• MDS Transition Billing
• PPS and Part A Billing
– 3 – day Qual hospital stay
– No pay billing
– MACs
• Allow Medicare Bad Debt
• SNF ABN
• Updated Medicare Cost
Report
• Timely Billing
• RAC Audits
– What’s hot
• Therapy Caps
• Enrollment 855
• Consolidated Billing
– Facility Fee
– Under Arrangement
Agreement
91
MDS Transition Billing
92
MDS Transition Billing
• Transition applies to only those residents
who have covered Part A days in
September and October 2010
• When RUG assignment from one SNF
PPS assessment covers days in
September and October
93
Transition Billing
• RUG-III can be calculated from MDS 2.0
and MDS 3.0
• RUG-IV can’t be calculated from MDS 2.0
– Require MDS 3.0 to calculate RUG-IV
• Assessments will be rejected
– MDS 2.0 ARD 10/01/10 or later
– MDS 3.0 ARD 09/30/10 or earlier
94
Transition Billing
• In order to receive payment for covered days
in September 2010 must have a RUG-III
– MDS 2.0 or MDS 3.0
• In order to receive payment for covered days
in October 2010 must have a RUG-IV
– Need an MDS 3.0
95
Transition Billing - Options
• Options
– May opt for default payment under specific
circumstances (in addition to current policy)
– May opt to complete MDS 2.0 and MDS 3.0
same type –MDS 2.0 in September and MDS
3.0 early October
– May opt to “substitute” MDS 3.0 for
previous type of MDS 3.0
– May opt to “substitute” MDS 3.0 for same
type of MDS 2.0
96
Transition Billing
• Transition does not apply
– When payment ends 09/30/10 or sooner
• Medicare stay ends 09/30/10 or sooner
• SNF PPS payment for assessment ends 09/30/10
– When payment begins 10/01/10 or later
• Medicare care stay begins 10/01/10 or later
• SNF PPS payment for assessment begins 10/01/10
Transition Billing
• Transition does not apply
– Medicare Start Dates
•
•
•
•
07/03/10 => Day 90, 9/30 is last paid day for 60-day
08/02/10 => Day 60, 9/30 is last paid day for 30-day
09/01/10 => Day 30, 9/30 is last paid day for 14-day
09/17/10 => Day 14, 9/30 is last paid day for 5-day
• Must have MDS 2.0 for September
payment days and MDS 3.0 for October
payment days
Default
• When a resident Part A stay ends
10/01/10 –10/04/10
– May opt to not complete applicable PPS
assessment
– Required to complete discharge assessment
(OBRA rules apply)
– Expectation is that this will be rare event
Billing Transition on UB-04
• Example – option 2
– Substitute MDS 3.0 60 day for MDS 30 day
• Continue Rev Code 0022
– May need additional row
• Use correct ARD / HIPPS Combination
ARD
10/12/10
10/12/10
Days
22
9
HIPPS
RUC/
RUC/
Comment
60 days used for 30 day
60 day MDS
100
PPS & Part A Billing Issues
3-day stay, No Pays, MACs
101
Observation Stay
• Three day inpatient stay is limited by observation
days
• Observation Stay
– A well defined set of specific, clinically appropriate services,
which include ongoing short term treatment, assessment and
reassessment that are furnished while a decision is being
made regarding whether a patient will require further
treatment as hospital inpatient.
– Medicare manual provisions suggest than an observation stay
should not last more than 24 to 48 hours.
– Beneficiaries are often not aware that observation stays may
limit their access to the post acute care benefit.
102
Qualifying Hospital Stay
• Do not bill Span code 70 on claims when 3 day
transfer criteria is not met
• If Medicare beneficiary dis-enrolls from MA Plans
– During SNF Stay
• 3 day stay waived if qualifies for covered service on effective date
• Eligible for number of days remaining that would not have been
used
– If after SNF discharge
• Must have 3 day stay
• 30 day transfer rule does not apply
103
No Pay Billing
Medicare Skilled
• Submit monthly
covered claim
Not Medicare Skilled
• If patient came in not
skilled
– Do not submit claim
– Benefits exhaust
– Remain in certified bed • If patient came in skilled
– Submit no-pay claim
• CMS = if not in certified
with discharge status
bed, patient should
when patient leaves
certified bed
return
104
Billing Benefits Exhaust
• Benefits exhaust claim with a drop in level of care
within the month
– Patient remains in the Medicare-certified area of the facility
after the drop in level of care
• Use appropriate bill type 212 or 213
– Bill types 210 or 180 should not be used for benefits exhaust
claims submission).
• Occurrence Code 22
• Covered Days and Charges = Submit all covered days
and charges as if the beneficiary had days available up
until the date active care ended.
• Patient Status Code = 30 (still patient).
105
Billing For Denial Notice
• Patient previously dropped to non-skilled care. Provider needs
Medicare denial notice for other insurers
– Bill Type = 210 (SNF no-payment bill type)
• Statement Covers From and Through Dates
– days provider is billing, which may be submitted as frequently as
monthly, in order to receive a denial for other insurer purposes
– No-payment billing shall start the day following the date active care
ended.
• Days and Charges = Non-covered days and charges beginning
with the day after active care ended
• Occurrence Span Code 74 = include the statement covers period
of this claim.
• Condition Code 21 (billing for denial).
• Patient Status Code = Use appropriate code.
106
Bed Hold Payment
Nursing Home
• Pub 100-04
• Claims Process
Manual
• Trans 1522
• CR 6030
• Date: 5/30/08
• Effect: 6/30/08
• Imp: 6/30/08
• Charges to the Beneficiary for admission
or readmission are not allowable.
• When temporary leaving the resident can
choose to make a bed hold payment.
• What is bed hold payment?
– Already been admitted to facility
– Has established living space
– More than simple agreement to allow readmission
– Maintain personal effects in a particular
living space.
107
Revised Reporting of Assessment
Dates [ARD] on UB-04
• Pub 100-04
• Claims Process
Manual
• Trans 2011
• CR 7019
• Date: 7/30/10
• Effect: 1/1/11
• Imp: 1/3/11
• Currently ARD is reported in F.L. 45
• Implements new occurrence code 50 for
reporting of ARD
• For DOS on or after January 1, 2011
• Must include an occurrence code 50 for
each revenue code 0022
– Code 50 = ARD
– Not required for default HIPPS
• HIPPS must be in the order the
beneficiary received that care
108
Allowable Bad Debt Write-offs
109
Medicare Bad Debt
• Allowable bad debt
– Dual Eligible – Paid at 100%
– Private – Paid at 70%
• Medicare Advantage
– Not an allowable Medicare bad debt
•
•
•
•
Reasonable Collection Effort
Use of collection agencies
120 day rule
Must bill policy for Dual Eligible
110
Collecting Co-Pay & Deductible
• Provider may bill beneficiary for the following
items:
– Part A or B deductible
– Part A or B co-insurance
– Services that are not covered by Medicare
• Provider may request and/or collect:
– Part A co-insurance on or after the day in which it applies
– Part B deductible or co-insurance on or after the provision
of service to which it applies
– SNF may require, request and accept a deposit or other
payment for services if it is clear the services are not
covered by Medicare
111
Medicare Advantage
Co-insurance
• Most Medicare Advantage plans have a co-pay
• Uncollected co-pay is not a Medicare allowable Bad Debt
• This leaves Provider at risk of bad debt for Medicaid dual
eligible residents
• Recommend
– Re-negotiate with Medicare Advantage
– Some plans will pay co-pay if Provider can show Medicaid will not
– Send claim to State Medicaid plan
• Once it is denied send claim to Medicare Advantage plan asking for
payment
112
SNF ABN 10055
113
SNF ABN – CMS 10055
• Pub 100-04
• Claims Process
Manual
• Trans 1983
• CR 6987
• Date: 6/11/10
• Effect: 6/11/10
• Imp: 7/12/10
• Clarifies the use of Notices of noncoverage and denial letters by
skilled nursing facilities.
• SNFs may continue using either
the notice of non-coverage or the
SNFABN for items and services
expected to be denied under
Medicare Part A
114
Revised SNF ABN
• Use for both Part A and Part B
• ABN is not required for care that is excluded by Statue or
fails to meet technical benefit requirement
– See voluntary uses
• Mandatory uses
– Not reasonable and necessary
– Custodial care
• Voluntary
– Care that fails to meet the definition of Medicare benefit
– Care that is explicitly excluded from coverage under the social
security act
• Routine eye care, routine foot care
115
Medicare Cost Report Updates
116
Medicare Cost Report Update
• CMS Transmittal 18
• Date 9/8/10
• Provider
Reimbursement
Manual
• Updates Chapter
35
• Skilled Nursing
Facility Complex
Cost Report
• A full cost report is required.
Simplified method cost report is
not allowed after July 1, 1998
• Modification of S-7 to allow New
RUG effective October 1, 2010.
• Worksheet B Part III and B-1, Part II
are eliminated
• Changes to electronic reporting
specifications for CR Ending on or
after October 1, 2010
117
Timely Billing
118
Timely Claims Filing
•
•
•
•
•
•
•
Pub 100-20
One Time Notice
Trans 697
CR 6960
Date: 5/7/10
Effect: 1/1/10
Imp: 10/4/10
• Reduces maximum filing
timeframe for Medicare claims
• Claims with DOS prior to 10/1/09
– Use old rule [due 12/31/10]
• Claims with DOS 10/09 to 12/09
– Must be billed by 12/31/10
• Claims with DOS after 1/1/10
– Must be billed within 1 calendar year
• One exception 42 CFR 424.44(b)(1)
– Error or misrepresentation by
designated official
119
Timely Claims Filing
•
•
•
•
•
•
•
Pub 100-20
One Time Notice
Trans 734
CR 7080
Date: 7/30/10
Effect: 1/1/11
Imp: 1/3/11
• Updates CR 6960 to ensure
standards are established related
to dates of service
• Institutional claims – use claim
through date in determining
timeliness.
• For physician and suppliers, use
the “from” date in determining
timelines.
• UB-04 should be based on
“through date for both A and B.
120
RAC Audits
121
RAC Audits of Nursing Facilities
• Section 302 of the Tax Relief and Health Care Act of 2006 made
the RAC Program permanent and required the Secretary to
expand the program to all 50 states by no later than 2010.
• Four Regions
–
–
–
–
Region A: Diversified Collection Services
Region B: CGI
Region C: Connolly, Inc.
Region D: Health Data Insights, Inc
• Phase-In strategy by Provider Type
– RAC audits are not to start until outreach has occurred for that
Provider type in that state.
• All Issues review by the RAC must first be approved by CMS and
posted to the RAC website
122
What is a RAC?
Mission
• The RACs detect and correct past improper
payments so that CMS and Carriers, FIs, and
MACs can implement actions that will prevent
future improper payments:
• Providers can avoid submitting claims that do not
comply with Medicare rules
• CMS can lower its error rate
• Taxpayers and future Medicare beneficiaries are
protected
123
RAC Audits of Nursing Facilities
Document Limits / Self Disclosure
• Additional Document Limits for SNF
– 10% of the average monthly Medicare claims (max
200) per 45 days per NPI
• Provider Self Disclosure
– If a provider does a self-audit and identifies improper
payments, the provider should report the improper
payments to their claim processing contractor.
– If the claim processing contractor agrees that they are
improper, the claims will be adjusted and no longer
available for RAC review (for that issue).
124
Type of RAC Reviews
• Automated Review
– Black and white issues
– No prior contact
• Automated Review Coding Erorrs
– NCCI Edits
• Complex Review for Coding Errors
– Request Medical Records
• Complex Review for Medical Necessity
– Request for Medical Records
125
RAC Audits
Prepare for Medical Record Request
• Tell your RAC the precise address and
contact person they should use when
sending Medical Record Request Letters
• When necessary, check on the status of
your medical record (Did the RAC receive
it?)
126
Appeal RAC Finding When Necessary
• The appeal process for RAC denials is the
same as the appeal process for
Carrier/FI/MAC denials
– Do not confuse the “RAC Discussion Period”
with the Appeals process
– If you disagree with the RAC
determination…Do not stop with sending a
discussion letter
– File an appeal before the 120thday after the
Demand letter
127
Redetermination [1st level] and
Reconsideration [2nd level]
• Limitation on Recoupment extends to the 1stand
2ndlevel appeal ONLY.
• Medicare will not begin recoupment of
overpayments (or will cease recoupment that has
started) when it receives notice that the provider
has requested a redetermination (first level
appeal) or a reconsideration second level appeal
at the Qualified Independent Contractor(QIC).
• After the QIC determination, Medicare will begin
to recoup on any remaining outstanding over
payment.
128
RAC Review Hot Issues [SNF]
• Region D
– Part B – Duplicate payment [Automated]
– Ambulance during inpatient stay
– Ambulance SNF to SNF transfer
– Part B NCCI Edits
– SNF Consolidated Billing
– Excessive units for untimed codes
129
Enrollment 855
130
Enrollment Revalidation
•
•
•
•
•
•
•
Pub 100-20
• CMS will being limited
Provider revalidation
One Time Notice
• Focus on top 50 skilled
Trans 558
nursing facility billers
CR 6486
– By State
Date: 9/14/09
Effect: 10/23/09
Imp: 10/23/09
131
SNF Consolidated Billing
Facility Fee, Under Arrangement
132
Facility Services billed by Ambulatory
Surgical Centers
• New edit will prevent separate
• Pub 100-04
payment for facility costs billed
• Claims Processing
by ASC for Part A SNF Stays
Manual
• Ambulatory surgeries performed
at an outpatient hospital are
• Trans 1911
excluded from SNF CB
• CR 6702
• This exclusion does not apply to
facility services provided by
• Date: 2/5/10
freestanding ASC
• Effect: 1/1/08
– New edit assures that CMS bundles
these services back to the SNF.
• Imp: 7/6/10
133
Physician Office Visit
• When the physician visits patient in the hospital
• Hospital is billing SNF for a room charge, technical
component of 99214 (rev code 510)
• 99214 does not have a technical / professional
component designation
• SNF help files indicates this is not a bundled code
• At least one FI is indicating that the code is bundled
back to the SNF
• CMS is in the process of reviewing the issue
• Recommendation – Don’t pay the code
134
Health Care Reform
and the Future of SNFs
Jill Mendlen
President and CEO
Family Choice of New York
LightBridge Hospice & Palliative Care
Vice-Chair, Finance Committee, AHCA
135
CMS Launches a New Approach to Health Care
Triple Aim
Population
Health
Experience
of Care
Integrated CareJourneys not Fragments
Patient centered
Prevention Reduction of medical errors/
patient safety
Based on best science
available
Per Capita
Cost
Cost ReductionSpecifically NOT by
withholding or reducing care
136
Change is Underway
• Managed Care
• Center for Medicare and Medicaid Innovations:
– Bundling Payment Pilot- 2013
– ACOs – 2012
– Pay for Performance (Value Based Purchasing)-2011
• Demos Began 2009
– 20 Payment and Delivery Models for Innovation
– Medical Homes -2010
• Federal Coordinated Health Care Office
137
Current System
Payment and Delivery Silos
Inpatient
Hospital
Medicare
Medicaid
Managed Care
Long Term
Hospital
Inpatient
Rehab
Physicians
SNF
Home Health
138
Future Payment and Care
Management Models
Medicare
Medicaid
Dual Care
Models
Medical Homes
ACOs
Bundled Payors
Managed Care
139
Complex Universe for SNFs
Hospitals
ACO’s
Bundled
Payers
SNF
Medical
Home
Managed
Care
140
Managed Care
141
Implications for Managed Care Plans
• Government payments to managed care plans
moving toward parity with fee-for-service
Medicare
• Increased regulatory and compliance scrutiny
• Plans may choose to make up any losses from
payment cuts by increasing premiums or costsharing or reducing negotiated rates with
providers
• SNP contracts with states will expand
Medicaid managed care
• Increased focus on transitions, quality
outcomes, and beneficiary satisfaction
• 36 million baby boomers will become
Medicare beneficiaries in the next 10 years
142
Bundling
143
Theory of Bundling
• Combining payments, ordinarily paid to multiple
providers to treat a given patient, into a single,
“bundled” payment
• Providing providers with an incentive to
cooperate with one another and coordinate care
throughout the entire episode of a patient’s
illness
• The theory -- Providers who have shared financial
incentives via bundling will work together to
optimize both the services they provide and their
reimbursement
• As with capitation, this creates a significant risk
that providers could stint on the care that’s
needed in order to maximize their reimbursement
144
National Pilot Program on Payment Bundling
Section 3023
• The Secretary shall develop a pilot program for
integrated care during an episode of care
provided to an applicable beneficiary around a
hospitalization
• Implementation not later than January 1, 2013
• Duration of pilot – 5 years
• Secretary to submit plan for implementation of
an expansion of the pilot program no later than
January 1, 2016
• May expand the program after January 1, 2016 if
it reduces spending and either does not reduce
quality of care or improves quality of care
145
Statutory Components That
Must Be Addressed
1.
2.
3.
4.
5.
6.
Scope of services
Duration of episode
Selection of patient assessment instrument
Method of payment
Selection of bundler or accountable entity
Selection of quality and outcome metrics
146
Additional Components
1.
2.
3.
4.
Patient choice
Selection of risk or case mix adjustment
Liability
Medicare benefit changes, e.g.
copayments, deductibles, 3-day stay
147
1. Conditions and Services
• Ten conditions to be selected for the pilot program
• Services that can be covered:
– Acute care inpatient hospitalizations
– Physician services delivered inside and outside of
the acute care hospital setting
– Outpatient hospital services, including emergency
department visits
– Post-acute services including home health,
skilled nursing, inpatient rehabilitation, long
term care hospital; and other services that the
Secretary determines appropriate
148
2. Episode of Care
• To start 3 days prior to a qualifying admission
to the hospital
• And span the length of the hospital stay and 30
days following the patient discharge
• The Secretary may determine that another
time frame is more appropriate for purposes of
the pilot
• The Secretary may waive such provisions of
Title 18 as may be necessary to carry out the
pilot program.
149
What Happens After the 30th day?
The Secretary shall establish procedures, in the
case where an applicable beneficiary requires
continued post acute care services after the last
day of the episode of care, under which payment
for such services shall be made.
150
3. Selection of Patient Assessment
Instrument
• The Secretary shall determine which patient assessment
instrument (such as the Continuity Assessment Record
and Evaluation (CARE) tool) shall be used under the pilot
program to evaluate the applicable condition of an
applicable beneficiary for purposes of determining the
most clinically appropriate site for the provision of postacute care to the applicable beneficiary.
151
4. Method of Payment
• The Secretary shall develop payment methods
for the pilot program for entities participating
in the pilot program.
• Such payment methods may include bundled
payments and bids from entities for episodes
of care.
• The Secretary shall make payments to the
entity for services covered under this section.
• Appears to be budget neutral, i.e. can’t cost
any more than would have w/o pilot
152
Method of Payment continued…….
• Shall include payment for the furnishing of
applicable services and others such as care
coordination, medication reconciliation,
discharge planning, transitional care services,
and other patient-centered activities as
determined appropriate by the Secretary.
• A bundled payment shall be comprehensive,
covering the costs of applicable services and be
made to the entity which is participating in the
pilot program.
153
5. Who Holds The Bundle?
• Not specifically determined by the legislation
• “An entity comprised of providers of services
and suppliers including a hospital, a physician
group, a skilled nursing facility and a home
health agency may submit an application to
the Sectary to provide applicable services.”
• Requirement for entities to participate in the
pilot program shall ensure that beneficiaries
have an adequate choice of providers
• Separate bundle for continuing care hospitals
154
6. Quality Measures
• Process, outcome and structure and include:
–
–
–
–
–
–
–
–
Functional status improvement.
Reducing rates of avoidable hospital readmissions.
Rates of discharge to the community.
Rates of admission to an emergency room after a
hospitalization.
Incidence of health care acquired infections.
Efficiency measures.
Measures of patient-centeredness of care.
Measures of patient perception of care.
• Secretary would have authority to delete,
revise, and add quality measures
155
Related CMS Initiatives To Date
• CMS is testing the CARE Tool under the Post Acute Care
(PAC) Payment Reform Demonstration to standardize
patient assessment information in post acute settings
• CMS is promoting better alignment of financial
incentives among providers with the following:
– Acute Care Episode (ACE) Demonstration
• CMS is engaged though contractors with extensive
research on:
– Development of episode groupers
– Determination of episode costs
– Development of episode pricing
156
Accountable Care Organizations
“Shared Savings Program”
“ACOs”
Medicare Program Must Be
established by January 1, 2012
157
PPACA Definition of an ACO
• An organization whose primary care
physicians are accountable for
coordinating care for at least 5,000
Medicare beneficiaries
– Having a hospital or specialist in the ACO
is optional
– Patients assigned to ACO using primary
care claims
158
ACO Requirements
• Required capabilities:
– Distribute bonuses
– Define processes to promote evidence-based
medicine
– Report on quality and cost measures
– Be patient-centered
• The beneficiary can still choose any
provider inside or outside of the ACO
159
ACO Requirements
• Have a formal legal structure to receive and
distribute shared savings
• Have a sufficient number of primary care
professionals for the number of assigned
beneficiaries (to be 5,000 at a minimum)
• Agree to participate in the program for not less
than a 3-year period
• Have sufficient information regarding
participating ACO health care professionals to
support beneficiary assignment and for the
determination of payments for shared savings
160
ACO Responsibilities under PPACA
• Responsible for high quality and low cost
– Cost growth allowance is a fixed amount
– Quality targets must also be met, Secretary
has discretion over measures and targets
• The ACO must coordinate care. This implies
the ACO:
– Is responsible for direct communication
among providers
– Has a system for knowing when its patients
are admitted and will be discharged from
the local hospital
161
Benefits for the ACO
• Payments made to ACOs in the same
manner they are made under Part A and
Part B
• Participating ACOs that meet specified
quality performance standards eligible to
receive a share of any savings if the actual
per capita expenditures of their assigned
Medicare beneficiaries are a sufficient
percentage below their specified
benchmark amount.
162
How Could ACOs Generate Savings?
• Reduce unnecessary services
– Admissions
– Readmissions
– Other
• Switch to lower priced provider
– Lower price sector
– Lower price provider within a sector
163
Implications for SNFs
• ACOs will not be the payment source for SNFs but they will:
– Manage the care of patients across the spectrum
– Have an impact on the choice of post-acute providers
– Work to reduce costs
– Monitor Quality
• SNFs must:
– Make themselves known to ACOs
– Provide top quality care
– At a reasonable cost
164
The Medical Home
165
Definition
• A patient-centered medical home refers to
physician practices that improve patient care
through the help of health coaches, nurses,
dietitians and others, as well as with
coordinated electronic health records.
• The practices must focus on patient wellness,
chronic disease management, reducing medical
complications and improving access to care to
prevent visits to the emergency department.
166
Essential Functions of a
Patient-Centered Medical Home*
• Provide each patient with an ongoing relationship with a personal
physician who is trained to provide first-contact, continuous, and
comprehensive care.
• Provide care for acute and chronic conditions, preventive services,
and end-of-life care, or arrange for other professionals to provide
these services.
• Coordinate care across all elements of the health care
system, with coordination facilitated by the use of registries
and information technology.
• Provide enhanced access to care through systems such as open
scheduling, expanded hours, and new options for communication
between patients and the practice’s physicians and staff.
* Adapted from the American Academy of Family Physicians, the American
Academy of Pediatrics, the American College of Physicians, and the
American Osteopathic Association.
167
CMS Demonstration
• To determine if a medical home could provide better
health care at lower cost to people with Medicare.
• A 3-year project required by the Tax Relief and Health
Care Act of 2006, for rural, urban, and underserved
areas in up to eight states.
• A board-certified physician will provide comprehensive
and coordinated care as the “personal physician” to
Medicare beneficiaries with multiple chronic illnesses.
• The doctors selected will receive a care management
fee, in addition to the payments for whatever
Medicare-covered services they may provide.
• Project to be implemented in 2010.
168
Implications for SNFs
• Medical Homes will not be the payment
source for SNFs but they will:
– Manage the care of patients across the
spectrum
– Have an impact on the choice of all providers
• SNFs must:
– Make themselves known to Medical Homes
– Provide top quality care
– At a reasonable cost
169
Conclusions
• Change will take time but the pace will pick up
• SNFs must:
–
–
–
–
–
Provide cost, quality outcome and satisfaction data
Sustain and improve quality
Manage costs
Contemplate diversification
Reach out to systems, managed care plans,
bundled payers, ACOs, Medical Homes
– Offer value, good patient skilled nursing
management and good transition management
170
Questions?
171
Contact Information
Elise Smith
T: 202-898-6305, Email: esmith@ahca.org
Peter Gruhn
T: 202-898-2819, Email: pgruhn@ahca.org
William Hartung
T: 202-898-2841, Email: whartung@ahca.org
172
A Free Performance Improvement Tool
for AHCA Members
“Merging information & expertise to advance excellence”
Visit Your LTC Trend Tracker Team at
Expo Booth #1258
www.LTCTrendTracker.com
173