1. REVISED Medicare RUGs IV Changes Aging Services of Minnesota District Meetings January 2010

2. Keys to Analyzing RUGs IV Understand the principal changes in RUGs IV Identify which residents move to a new RUG class and which do not Compare RUG IV rates to RUG III rates Calculate the days for each resident Change in SNF revenue = –# residents x change in rate x # days AAHSA calculator estimates Medicare revenue Take into account MDS 3.0 changes

3. Overview of RUGs IV Changes Major shift of $ from therapy to nursing care System to be budget neutral for Medicare Higher indices for nursing; lower for therapy New indices based on STRIVE study Elimination of three “loopholes”

4. Overview of Changes (cont.) New short-stay therapy payment calculation New domain—Special Care split into two Shifting of some services to different RUGs Most domains have changes in qualifiers 13 new RUGs (total of 66) Changes in ADL index [Index maximization continues, so you get the highest rate the resident qualifies for]

5. New Rates for Selected RUGs RUGs III RUGs IV Extensive Services –SE3$352.23ES3$587.05 –SE1$270.66ES1$411.15 Special Care –SSC$266.21HE2$398.58 –SSC$266.21LE2$362.28 –SSA$248.42HB1$293.87 –SSA$248.42LB1$249.20 Clinically Complex –CC2$264.73CE2$323.19 –CA1$208.37CA1$198.94

6. Therapy Rates Therapy rates will go up, but... RUX720 Min$646.57$808.91 RUL720 Min$578.35$789.36 RHX325 Min$404.68$658.51 RHL325 Min$395.78$583.02 RUC720 Min$562.03$603.68 RUA720$499.74$497.58 RVC500 Min$439.87$517.63 RVA500$385.00$443.64 RHC325 Min$375.02$451.89 RHA325$337.94$354.16 RMC150 Min$343.20$398.46 RMA150$328.37$302.12

7. Loophole #1: Estimated Therapy No more estimated therapy (section T) –Only therapy actually provided will count –GAO found that one fourth of residents did not receive the amounts of therapy estimated in section T Check each resident’s actual therapy minutes against the estimate in section T If you contract for therapy, you may need to revise your contract.

8. Loophole #2: Concurrent Therapy Limit will be 2 residents per therapist Separate calculations for PT, OT, SLP For each one, count 1.All minutes of individual therapy 2.One-half of minutes of concurrent therapy 3.All minutes in group therapy, subject to limit of 25% of total therapy minutes 4.If 25% limit applies, then (#1 + #2)*1.33 for adjusted therapy minutes.

9. NEW: Short-Stay Therapy ! Divide total therapy minutes (previous slide) by number of days of therapy = Ave. Therapy Minutes Must meet six qualifiers –Assessment is a Start of Therapy OMRA assessment –5-day or readmit/return assessment completed –ARD on or before 8 th day of Part A stay –ARD on Start of Therapy OMRA is on last day of Part A –Therapy started during last 4 days of Part A stay, including weekends –At least one therapy continued through last day of Part A stay

10. Short Stay Therapy Classes >=144 minutesRUX/L or RUC/B/A 100 - 143 min.RVX/L or RVC/B/A 65 - 99 min.RHX/L or RHC/B/A 30 - 64 min.RMX/L or RMC/B/A 15 - 29 min.RLX or RLB/A ADL splits for Rehab + Extensive Services –11-16 = X2-10 = L (except RLX, 2-16) ADL splits for Rehab –11-16 = C6-10 = B0-5 = A –Except RLB/A 11-16 = B 0-10 = A

11. Loophole #3: Look Backs Elimination of hospital “look back” periods –Affects five services: IV Feeding in last 7 days IV meds, Ventilator/respirator, Tracheostomy, Suctioning in last 14 days –CMS found services often not provided in SNF –CMS also found that services in hospital did not predict resource use in SNF Affects residents in High Rehab classes with Extensive Services and in Extensive Services

12. Hospital Look Backs (cont.) If services provided in SNF, residents remain in RUG domain (unless they have IV meds, IV feeding, or suctioning) –ES3: Trach & ventilator/respirator –ES2: Trach or ventilator/respirator –ES1: Isolation for infectious disease If services not provided in SNF, residents move to appropriate Rehab class or lower RUG domain/class CMS says only 10% of residents will remain in Ultra High Rehab w/Ex. Serv.

13. Hospital Look Backs (cont.) Examples of Possible Reclassifications RUX720 Min$646.57$808.91 RVX500 Min$484.37$724.25 RHX325 Min$404.68$658.51 RUC720 Min$562.03$603.68 RVC500 Min$439.87$517.63 RHC325 Min$375.02$451.89 RMC150 Min$343.20$398.46

14. Services Shifted to New Classes IV feeding moves from Extensive Services to Special Care IV meds move from Extensive Services to Clinically Complex Examples: –SE3 ($331.57) to HD1 w/IV feeding ($312.02) –SE3 ($331.57) to CD3 w/IV meds ($323.19) –SE1 ($270.66) to HC1 w/IV feeding ($296.67) –SE1 ($270.66) to CD1 w/IV meds ($282.71)

15. New Special Care Classes/Domains Two domains: –Special Care High Includes comatose, septicemia, diabetes w/injections, quadriplegia, COPD, fever with pneumonia or vomiting or weight loss or feeding tube, IV feedings, respiratory therapy for 7 days 8 classes (HE2 - HB1) –Special Care Low Includes cerebral palsy, multiple sclerosis, Parkinson’s, respiratory failure with oxygen, pressure or veinous ulcers, foot infections, radiation therapy, dialysis 8 classes (LE2 - LB1) End splits are ADLs and signs of depression

16. New Clinically Complex Classes Currently six classes (CC2 - CA1) Will be 10 classes (CE2 - CA1) Some change in clinical qualifiers –Some current qualifiers move to higher domain (e.g., dialysis, septicemia) –Some qualifiers drop out (e.g., internal bleeding) Will also include residents that qualify for higher domains except for their very low ADL score Note: Impaired Cognition and Behavior Problems (8 classes) merge into Behavioral Symptoms and Cognitive Performance (4 classes, BB2 - BA1)

17. CMS Utilization Projections RUGs IIIRUGs IV Rehab + Ext 36.49% 3.82% Rehab only 51.75%75.93% TOTAL 88.23%79.75% Extensive 4.26%1.04% Special Care 3.03%10.11% Clin. Complex 3.22% 5.58% TOTAL 10.51%16.73%

18. Key Steps for 2010 Learn the RUG IV classes and their definitions Learn the new MDS 3.0 Master the new ADL index Work with your vendors Staff training, staff training, staff training

19. Questions: DARRELL SHREVE, vice president of health policy dshreve@agingservicesmn.org JEFF BOSTIC, director of data analysis jbostic@agingservicesmn.org

20. With support from: