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PPS for Rehabilitation ImplementationIssues November 2001 Brian Ellsworth Senior Associate Director American Hospital Association Washington Report…

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Presentation on theme: "PPS for Rehabilitation ImplementationIssues November 2001 Brian Ellsworth Senior Associate Director American Hospital Association Washington Report…"— Presentation transcript:

1 PPS for Rehabilitation ImplementationIssues November 2001 Brian Ellsworth Senior Associate Director American Hospital Association Washington Report…

2 CMS Final Rule: AHA concerns about paperwork were addressed Inpatient Rehabilitation Facility Patient Assessment Instrument (IRF-PAI)…a victory for the field MDS-PAC not implemented 2 assessments only (admission and discharge) Any clinician may complete No attestation required Reduced penalty for late completion

3 Payment methodology – original AHA concerns Medical Complexity AHA: Payment system falls short in recognizing medically complex cases CMG compression Shortfalls from transfer policy Inadequacy of outlier payment

4 Payment methodology: AHA concern & CMS response CMG Compression AHA: Remedy compression of the case mix weights CMS: Added 10% to payments CMI > 1 Adjusted for multiple co-morbidities using a 3-tiered approach Offset by reduced payment to cases with CMI < 1, short stay outliers, and 4 CMGs for deaths

5 Payment methodology: AHA concern & CMS response Transfers AHA: Eliminate (or narrow the scope of) the transfer policy, particularly with respect to medically complex patients At a minimum, pay 150 percent for the first days care under any transfer policy CMS: No change in policy on scope First day payment at 150% per diem

6 Payment methodology: AHA concern & CMS response Disproportionate Share Payments (DSH) AHA: Revise DSH policy and formula to avoid wide payment variations CMS: New formula results in smaller adjustments No threshold established to qualify for payments Average adjustment < 20% Relabeled Low Income Patient Adjustment (LIP)

7 Payment methodology: AHA concern & CMS response Outlier Policy AHA: Change outlier in sync with recommendations on medically complex CMS: Outlier set at 3% of total pool Outlier threshold increased from $7066 to $11,211 Payment set at 80% of threshold (after adjustments) Payment for the short-stay outlier CMG (less or equal to 3 days) reduced from.1908 to.1651

8 Payment methodology: AHA concern & CMS response AHA: Interrupted stay policy too broad CMS: No policy change Patient who returns to rehab within 3 days of acute care stay will result in a single CMG case payment Acute care hospital eligible for DRG if patient stays longer than 1 day

9 Other Payment System Features Impact estimated to cost CMS $70 million over two years. No future estimates of net effects. CMS Projected Impact of Fully Phased-In PPS Facility Type# of cases # of facilities New payment to current payment ratio All Facilities347, 8091,0241.00 Freestanding hospital114,3761680.96 Unit of acute hospital233,4338561.02 Large urban163,9704891.01 Other Urban152,6473920.99 Rural31,1921431.00 Mid-size Teaching Program15,741380.97

10 Final Rule: Other Payment System Features Conversion factor/standardized amount increased from $6024 to $11,838 Behavioral Offset increased slightly from.064 to 1.16 Labor-related share (for wage index adjustments) increased slightly from to from 71% to 72.4% Rural adjustment increased from 15% to 19% No IME adjustment

11 Other Policy Issues No change in 75% rule for admissions falling into top 10 diagnoses No waiting period for SNF conversions (unlike 12-month wait for acute care facilities) Not incorporating recent wage area geographic reclassifications

12 Payment methodology: issues for the future Comorbidities vs. complications Will payment be adequate for really high cost cases? – outliers, compression Error rates on RICs, patients with multiple RICs Use of not observed code (0) Presence of upcoding Impact of medical education programs on costs per case Interrupted stays, transfers

13 Developments Since the Final Rule OMB approved the IRF-PAI on September 13, 2001 AHA had submitted two comment letters on assessment instrument Questioned intended uses of non-payment items OMB limited its approval to those items with a demonstrated use Implementation schedule announced Training Interim training manual Field-testing of billing system

14 Inpatient Rehabilitation Facility – Patient Assessment Instrument Interim Training Manual released Changes to be made in final version of the manual comorbidities (question 24) to be coded as secondary condition at or after admission (except last two days) complications (question 47) to be coded as secondary condition after admission (except last two days) Medical Needs and Quality Indicators sections are voluntary until further notice

15 Interim training manual… known changes (continued) Impairment groups (Appendix B of the manual) not consistent with Chart 5 of the final rule – will be modified Comorbidities list (Appendix C of training manual) – not complete in manual, refer to Appendix C of final rule for complete list Program interruption dates – check final rule preamble for CMS policy CMS will clarify sources of information for IRF- PAI Privacy and confidentiality

16 IRVEN: CMS Data Entry Software www.hcfa.gov/medicare/irven.htm IRFs may use IRVEN Beta Version 1.0 or use private vendor software that meets updated CMS data submission specifications www.hcfa.gov/medicare/irfpai-draftspecs.htm www.hcfa.gov/medicare/irfpai-draftspecs.htm All IRFs must submit Medicare patient assessment data starting January 1, 2002, regardless of PPS start date – new admits and existing caseload

17 Patient assessment Employee or or contracted employee of IRF, trained in completion of the PAI More than one clinician may be involved Patients must be informed of rights in advance, if refusal…clinician may obtain information from other sources and has discretion to document source of information (a good idea)

18 New terminology for admissions and discharges… Observation period Assessment reference date (ARD) – last day of observation period Completion date Encoded date - entered into software Locked date – successfully passed CMS system edits Transmission date – sent to CMS

19 Billing – unchanged requirements under PPS Provider classification Bill types Ancillary services Leave of absences Adjustments (changes to HIPPS codes allowed with verifiable info.) Timeliness standards FI/CWF processing

20 Billing – new rules Claim length – one claim for entire stay, including interrupted stays – 60 day interim bill allowed Type of bill Revenue code 0024 – IRF PPS indicator HIPPS codes – combination of CMG (95 groups) and comorbidity code New patient status codes

21 Patients under care when IRF transitions to PPS Perform assessment based on patient characteristics at admission Claims allowed to cross over the date of the transition because payment is based on the discharge date No special coding required on a crossover claim

22 Short stays and deaths handled by the pricer Short stays less than 3 days – handled automatically at FI by pricer Deaths (patient status code 20) placed automatically by pricer into one of 5 groups based on length of stay and RIC

23 Option to bypass blending of TEFRA and PPS rates Written notice must be received by FI no later than 30 days prior to start of cost report period Facility must estimate case mix index for next year in order to complete calculation Compare estimated PPS to TEFRA


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