Skilled Nursing Facility PPS Final Rule - Fiscal Year 2019 · • Applies to freestanding SNF’s,...

Skilled Nursing FacilityPPS Final Rule - Fiscal Year 2019

Payment / Regulatory Updates &

Patient –Driven Payment Model (PDPM)© 2018 Dixon Hughes Goodman LLP. All rights reserved.

Agenda• FY2019 PPS Regulatory Updates

(Effective October 1, 2018)

– PPS Payment Adjustments– Quality Reporting Program (QRP)– Changes and clarification on Value Based Purchasing (VBP) and

SNF Readmission Measures (SNFRM)

• Recap and Clarification of the Patient Driven Payment Model (PDPM) (Effective October 1, 2019)

– Payment Components– Changes from the Proposed Rule– Key Elements of Calculation– Preparing for implementation

© 2018 Dixon Hughes Goodman LLP. All rights reserved.

FY19 PPS Regulatory Changes&

Payment Adjustments


FY19 PPS Regulatory Changes

Medicare PPS Rates - 2.4% Market Basket Industry Increase

– Effective 10/1/2018– Equates to $820M Increase in PPS Payments for the

Industry ($30M less than projected in proposed rule)– Bipartisan Budget Act of 2018 specified that the net Market

Basket Increase would be 2.4%. – The actual Market Basket Increase would have been 2.0%

• Market Basket - 2.8%• Multifactor Productivity Adjustment - (0.8%)• Net Market Basket = 2.0%

WIN for the Industry of +0.4%


Medicare PPS Rates – FY18 and FY19 Compare

Nursing – Case Mix Therapy – Case‐Mix Therapy – Non‐Case‐mix

Non‐Case‐Mix

FY2018 $177.26 $133.52 $17.59 $90.47

FY2019 $181.44 $136.67 $18.00 $92.60

Unadjusted Federal Rate Per Diem - URBAN

Unadjusted Federal Rate Per Diem - RURALNursing – Case Mix Therapy – Case‐Mix Therapy – Non‐

Case‐mixNon‐Case‐Mix

FY2018 $169.34 $153.96 $18.79 $92.14

FY2019 $173.34 $157.60 $19.23 $94.31

*Note: above rates are before any adjustment for case-mix, wage index, QRP or VBP


Medicare PPS Rates – Wage Index• Multiple Public Comments re: Wage Index (Both For and Against SNF-Specific Wage

Index)

• Currently the Wage Index is based on the IPPS Hospital Wage Index Calculations (pre-reclassified and without the Occupational Mix adjustment)

• CMS stands by their opinion that not enough data (or accurate data) exists to develop a SNF-specific Wage Index by using similar data elements as that of the IPPS Wage Index

• CMS states that with 3,300 hospitals and 15,000 SNF’s, the significant audit resources needed to verify the quality of the SNF data would be too great a burden on CMS/MACs

Debatable !!…CMS would have several options- S-3 Part V of the Medicare Cost Reports for RN/LPN/CNA/Therapy wages- Payroll Based Journal (PBJ) submission


SNF Quality Reporting Program (QRP) Measures

• Mandated by the IMPACT act of 2014

• No new measures proposed – Measures remain both MDS Assessment & Claim Based

• Changes to public reporting on nursing home compare

• FY2019 Payments to be reduced by 2% if not in compliant with reporting mandates (MDS & Claim-based – applies to market basket calculation – facilities not in compliance will only receive .4% increase as opposed to 2.4%)

• If you are reporting and completing assessments correctly, nothing to worry about on this



Changes on the CMS Side:

• Changes in the ultimate calculation on CMS side. Added an 8th removal element factor – “The costs associated with a measure outweigh the benefit of its continued use in the program.”

• Expanded methods of how CMS will notify SNF’s of (1) non-compliance with SNF QRP for a program year as well as (2) final decision regarding any requests for reconsideration:– via a letter sent through at least one of the following methods: QIES

ASAP system; United States Postal Service; or via an email from the MAC.

• Public Data Display – Updates to the information displayed on the Nursing Home Compare website: – Discharge to the Community and Medicare Spending per Beneficiary

(Change from 1 year to 2 years of data – CY2019 will be based on discharges from October 1, 2016 through September 30, 2018)



Changes on the CMS Side Continued:

• Finalized proposal to begin publicly displaying data in CY2020 on the following four assessment-based measures:– Application of IRF Functional Outcome Measures:

• (1) Change in Self-Care Score for Medical Rehabilitation Patients (NQF #2633)

• (2) Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634)

• (3) Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635)

• (4) Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636)

• SNF’s are required to submit data on these four measures with respect to admissions and discharges occurring on or after October 1, 2018


Value Based Purchasing (VBP) – Re-Admissions

• Estimated $211M Reduction in PPS Payments for the Industry

• Applies to freestanding SNF’s, SNF’s affiliated with acute care facilities, and all non-CAH swing-bed rural hospitals

• 2% Medicare rate cut (automatic reduction) with the ability to earn back all (or more) of the 2% reduction

• CMS estimates SNF’s may receive percentages ranging from 0.98% to +2.33% on a net basis.

• SNFRM (Skilled Nursing Facility Re-admission Measure) for FY2019 (10/1/18) is based on facility-specific performance during calendar year (CY) 2015 as compared to facility-specific performance during calendar year (CY) 2017 as an improvement/performance year


Value Based Purchasing (VBP) – Re-Admissions• The higher of either (1) the SNFRM improvement from 2015 baseline to 2017 or (2) the

performance/achievement in 2017 will determine the payment adjustment factor. Facilities receive an adjustment factor of 0% to 2+% which reflects how much of the 2% cut can be earned back

• Adjustment factor will be applied to payment rate for FY19 – Claims based reduction versus lump sum

• Readmissions data is collected through Medicare hospital claims data vs. SNF claims. (No additional reporting requirements)

• SNF’s will be notified of their VBP incentive payment 60 days prior to October 1st (should be out now) through Performance Score Reports using the QIES-CASPER system

• SNF’s have 30 days from the date the report is posted on the QIES-CASPER system to submit corrections to their SNF performance score and ranking to the [email protected] mailbox


Value Based Purchasing (VBP) – Re-Admissions• “Achievement threshold” is the 25th percentile of national SNF performance on the quality

measure during the applicable baseline period. CMS believes this represents an achievable standard of excellence and will reward SNFs appropriately for their performance.

• “Benchmark” is the mean of the top decile of SNF performance on the quality measure during the applicable baseline period. CMS believes this represents high but achievable standards of excellence. This is a snapshot of the highest-performing SNF’s.

• Scoring for SNF’s will be between these two measures each year. If a SNF meets or exceeds the achievement threshold, they receive achievement points up to the benchmark.

• “Improvement threshold” is an individual SNF’s performance on the SNF readmission measure during the applicable baseline period

• SNFRM rates represent the percentage of qualifying patients in a facility who were readmitted within the risk window for the measure. As a result, the lower SNFRM rate of .14159 means approximately 14.2% of qualifying patients discharged from the SNF were readmitted during the risk window. Inverted rates are used for measures, so in this example, .85841 or 86% were NOTreadmitted during the risk window.


Value Based Purchasing (VBP) – Re-Admissions• Achievement Calculation results in a score of 0 to 100 points and is as follows:

– If a SNFRM inverted rate is equal to or greater than the benchmark, the SNF receives 100 points for achievement

– If a SNFRM inverted rate is less than the achievement threshold, the SNF would receive 0 points for achievement

– If a SNFRM’s inverted rate is equal to or greater than the achievement threshold, but less than the benchmark (most providers), the SNF would receive between 0 and 100 points according to the following formula:

SNF Achievement Score 9 .

)]+.5)x10

• Improvement Calculation results in a score of 0 to 90 points and is as follows:– If a performance period SNFRM score is equal to or lower than its improvement threshold, the

SNF would receive 0 points for improvement– If a performance period SNFRM score is equal to or higher than the benchmark, the SNF would

receive 90 points for improvement– If a performance period SNFRM score is greater than its improvement threshold, but less than the

benchmark, the SNF would receive between 0 and 90 points for improvement according to the following formula:

SNF Improvement Score 10 .

)]+.5)x10



Measure ID Measure Description Achievement Threshold Benchmark

SNFRM SNF 30‐Day All‐Cause Readmission Measure (NQF #2510)

.80218 .83721

Final FY 2020 SNF VBP Program Performance Standards



.79476 .83212

Final FY 2021 SNF VBP Program Performance Standards



.79590 .83601

Baseline: CY2015 and Performance Period: CY2017Final FY 2019 SNF VBP Program Performance Standards

Baseline: FY2016 and Performance Period: FY2018

Baseline: FY2017 and Performance Period: FY2019



• SNF’s with insufficient baseline period data (<25 Medicare Part A stays in a 12 month period), but sufficient performance period data, will only receive an achievement score (no improvement score as the baseline period is insufficient and the calculation takes the higher of the two calculations)

• SNF’s with insufficient performance period data (<25 Medicare Part A stays in a 12 month period), will be assigned a performance score based on the average of all SNF scores

• SNF’s with observed readmission rates of zero may receive risk-standardized readmission rates that are greater than zero due to risk adjustment

• Extraordinary Circumstances Exceptions policy now adopted by CMS will exclude data from the extraordinary circumstances period from their measurement rate calculations. Can be natural or manmade disasters such as hurricanes, fires, terrorism, etc. that is outside a facility’s control and may affect the ability to provide high-quality health care.


Medicare PPS Rates – Summary

2% Sequestration

Wage‐mix adjusted for geographical areas

Case‐mix adjusted into RUGs

Unadjusted Federal Rate (Urban or Rural)

QRP applied to market basket update

SNF PPS Rates pre 10/1/2018

2% Sequestration

Wage‐mix adjusted for geographical areas

Case‐mix adjusted into RUGs

SNF VBP Adjustment

Unadjusted Federal Rate (Urban or Rural)

QRP applied to market basket update(Full 2.4% vs 0.4%)

SNF PPS Rates 10/1/2018


SNF PAYMENT REFORM

PATIENT-DRIVEN PAYMENT MODEL (PDPM)


SNF PPS Payment Reform – History / Timeline

• 2013 CMS contracts with consulting group - Acumen, LLC to identify potential alternatives to the existing methodology used to pay for services under the SNF PPS (RUGs IV)

• Acumen reviewed previous research and policies related to SNF PPS therapy payment and potential options for replacing the current system of paying for SNF services – with a focus on therapy utilization. (Report issued in April 2014)

• Second Phase (Current) - Acumen uses findings from the Phase 1 Summary Report to identify potential alternative payment models (Summary Reports Issued February 2015 – for further analysis)– Outcomes: RCS-1 (2017 ANPRM), PDPM (2018 Proposed & Final Rule)


SNF PPS Payment Reform – History / Timeline• 2013 – Present CMS contracts with Acumen to research and model alternatives to

the current PPS / RUG IV reimbursement structure

• May 2017 – Advanced Notice of Proposed Rulemaking for Resident Classification System (RCS-1) issued for Public Comment

• June 2017 – Public Comment period extended until August

• August 2017 – CMS releases all public comments relative to RCS-1 Payment Methodology

• April 27, 2018 – SNF Proposed Rule for FY2019 introduces Patient Driven Payment Model

• June 2018 – Public Comment period for PDPM

• July 31, 2018 – CMS issues Final Rule with PDPM implementation date of 10/1/2019


Public Comments on Proposed Rule:Theme of the Final Rule Language from CMS:

“Thanks for the feedback….but we’re just going to do it our way”

Examples:- PDPM Calculations are based on Historical Data with no adjustment

for behavioral patterns

- There is no provision for a phase-in which would lessen the burden on the negatively impacted providers

- If the system creates the desired outcomes (i.e. LOS reduction and decreased MSPB in the post-acute setting) then it would create a decrease in SNF payments (Not Budget-Neutral)

Link to all 294 Public Commentshttps://www.regulations.gov/docketBrowser?rpp=50&so=DESC&sb=commentDueDate&po=0&dct=PS&D=CMS-2018-0051


Differences: Final Rule vs. Proposed Rule

…Not Much!!

- Interim Payment Assessment (IPA) changed from a mandatory assessment to optional

- MDS Coding Element for PT & OT component - (Section J [procedure category] vs. Section I

[ICD-10 Procedure Code])

- “Scoring” elements of Section GG tweaked for final rule


Patient-Driven Payment Model – Key Aspects Re-Cap

• Provides additional payments for beneficiaries needing extensive services (i.e. ventilator, respirator, infection isolation), as well as those diabetes, wound infections, IV medication needs, bleeding disorders, behavioral issues, chronic neurological conditions, and bariatric care.

• Establishes a payment for each component based on predicted care needs associated with patient characteristics and assessment data.

• Variable per-diem payment adjustments to track changes in care needs over the SNF length of stay (PT, OT, Non Therapy Ancillary)

• Promotes consistency with other Medicare payment settings by basing resident classification on objective clinical information while minimizing the role of volume-based service provision in determination of payment


Patient-Driven Payment Model – Key Aspects

• Removes therapy minutes as the basis for therapy payment

• Establishes separate component for Non Therapy Ancillary services (adjusted by case-mix)

• Nursing Component is based multiple clinical attributes rather than therapy minutes and functional status

• Separates the current therapy component into three separate case-mix-adjusted components: PT, OT, and SLP


COMPONENTS OF PATIENT-DRIVEN PATIENT MODEL

From Acumen PDPM Technical Report


COMPONENTS OF PATIENT-DRIVEN PATIENT MODEL

• Physical Therapy– Assigned to one of 16 case-mix groups.– Groups are determined by diagnosis coding (MDS Section I) for

the SNF stay and Functional Scores (MDS Section GG)

• Occupational Therapy– Assigned to one of 16 case-mix groups.– Groups are determined by diagnosis coding (MDS Section I) for

the SNF stay and Functional Scores (MDS Section GG)

• Speech-Language Pathology– Will be assigned to one of 12 SLP case-mix groups.– Groups are determined by diagnosis coding (MDS Section I) for

the SNF stay, presence of a swallowing disorder or mechanically altered diet (MDS Section K), comorbidity or mild to severe cognitive impairment (MDS Section C)


COMPONENTS OF PATIENT-DRIVEN PATIENT MODEL• Nursing

– Groups are determined by diagnosis coding (MDS Section I) for the SNF stay, Functional Scores (MDS Section GG), and various other patient-specific characteristics from the MDS.

• Non-Therapy Ancillary– Will be assigned to one of 6 Non-Therapy Ancillary (NTA) case-mix

groups.– Groups are determined by diagnosis coding (MDS Section I) for the

SNF stay, presence of enhanced ancillary needs (i.eenteral/parenteral/IV) (MDS Section K)

• Non Case Mix Component– Covers room and board– Administrative overhead– Capital-related costs


DETERMINANTS OF PAYMENT – FROM ACUMEN MODEL

From Acumen PDPM Technical Report


CLINICAL & PT / OT CATEGORIES

From CMS FY19 Final Rule


PDPM – Primary Sources for Calculation

PDPM Payment Component Source for CalculationMDS Item I8000 ‐ ICD‐10 Codes (Primary and Secondary Diagnosis Codes)

MDS Section GG‐ Functional Scores

MDS Item I8000 ‐ ICD‐10 Codes (Primary and Secondary Diagnosis Codes)

MDS Section GG‐ Functional Scores

MDS Item I8000 ‐ ICD‐10 Codes (Primary and Secondary Diagnosis Codes)(Specifically Co‐Morbitities related to Speech Therapy needs)

MDS Section C ‐ Cognitive Impairment / BIMS Score

MDS Section K ‐ Mechanically Altered Diet and/or Swallowing Disorder

MDS Item I8000 ‐ ICD‐10 Codes (HIV Positive: Yes/No)

MDS Section K ‐ Enteral / Parenteral / IV Feeding Needs

MDS Item I8000 ‐ ICD‐10 Codes: Secondary Codes relevant to Non‐Therapy Ancillary Needs

MDS Section GG‐ Functional ScoresMDS Item I8000 ‐ ICD‐10 Codes (Primary and Secondary Diagnosis Codes)Other MDS Items (Section C, E, H, K, M, O)

Non Case Mix Everyone receives the Same

OT

PT

SLP

Non Therapy Ancillary

Nursing


Variable Per-Diem Adjustment Factors (VPDA)

VPDA translates to a sliding scale for reimbursement based on length of stay


INCREASED IMPORTANCE ON MDS DOCUMENTATION

Pay close attention to…


INCREASED IMPORTANCE ON MDS DOCUMENTATION

Section GG has been applicable since October 2016 as part of the requirements for the Improving Medicare Post-Acute Care Transformation Act of2014 (IMPACT Act).

Section GG = Comprehensive Measure of Functional Ability

Get Good at This!!BONUS – It is a “Two-Fer” since QRP is also based heavily on Section GG


Interim Payment Assessment (IPA)• What is it? IPA = Interim Assessment that recognizes a change in patient condition

that warrants a different rate

• Proposed Rule had the IPA as a requirement. Final rule changed this interim assessment to an optional assessment.

• Public Comment – Providers were concerned about the compliance risks if these were not performed both timely and accurately.

• Providers will determine if and when complete an IPA.

• CMS will be revising the Assessment Reference Date (ARD) criteria and the underlying rules. The ARD will be the date the SNF completes the interim assessment NOT the date of the triggering event.

• Payment based on the IPA will begin the same day as the ARD.

• Unfortunately, the sliding scale rate calendar does not start over with the IPA (UNFAIR???)


MDS Schedule – From FY19 CMS Final Rule

Notes:‐ No Change of Therapy‐ No End of Therapy‐ No Standard Interim Assessment Reference Dates


MDS Changes Effective October 1, 2018• J2000 New item

– Did the resident have major surgery during the 100 days prior to admission? Y/N

– Surgical Procedure Category

• Sections I & GG – Significant Changes to these sections. – Enhanced focus on both Functional Abilities (GG) and ICD-10

diagnosis coding (I)

• Numerous Other Changes

Most Recent Data Sets from CMShttps://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Downloads/MDS-30-Item-Sets-v1-16-0R-DRAFT-Revised-for-October-1-2018-Release.zip


PDPM – Summary• Implementation Date of October 1, 2019 (could this change???

Perhaps, but definitely don’t count on it.)

• PDPM Gives increased weight to Nursing Services over Rehab

• Sliding scale for Reimbursement – Days 1 – 20 would ideally be “profitable” to the provider. After day 20, the per diems decrease to a level expected to be less than the underlying costs (= Financial Loss).

• Significant Changes to the MDS Schedule– Admission Assessment– Change in Condition (Interim Payment Assessment / IPA)– Discharge


PDPM Positives?

• Proposed budget neutral implementation (although based on previous years’ data, so very hard to validate

• Potential facility overhead reductions – CMS estimates $2 billion cost savings over ten years– Documentation Streamlining– MDS function– Care management

• Simplification of the PPS MDS schedule– Elimination of therapy assessment requirements – Admission, Discharge, and Interim Change Assessments


PDPM – Not so Positive???

• Therapy Delivery – 25% ceiling on combined Group and Concurrent Therapy (RCS-1 proposed 25% for each setting – Total 50%)

– Contrary to the spirit of “Patient-Driven”...Takes the care delivery out of the providers’ (and therapists’) hands.

– Ultimately should be what’s best for the resident….not what CMS thinks should be best.

• Implementation Date– October 1, 2019?– VERY Aggressive Timeline…Lots to be done in the next 14 months– Delayed Implementation?? Don’t count on it!

• Potential Future Changes – Parity Adjustments based on Budget Neutrality Outcomes?– MDS Changes based on behavioral changes?– RAI Manual Changes?

• No Phase-In Period !


What Can You Do?• Start Planning Now!!

• Continue to vocalize your comments to your both AHCA and your State Associations as well as your local federal Legislators

• Reach out to your technology vendors to let them know you are thinking this through.

• Get really, really good at section GG of the MDS

• Get even better at ICD-10 coding. It can make or break the case mix indices that drive these rates.

• Use CMS Resources - Significant Changes on the Horizon: RAI Manual, MDS Function, Billing Procedures, Technology…Please begin “looking around the corner” and be ready for operational changes


How Can We Help?• We’re all in this together and it will take a consolidated effort to

figure this out.

• Reach out. Ask us questions. Use us as a sounding board for your questions. Not everyone has the infrastructure and/or resources to handle the strategy and implementation of a completely new system

• Understand the revenue impact to your enterprise

• Clinical / MDS Assistance during implementation

• PPS Rates available (unadjusted for QRP and VBP)

• Provider Specific data on Re-admissions within your market– SNF SAF – Medicare Claims Data


Additional CMS ResourcesPatient Driven Payment Model

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.htm

Quality Reporting Program

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Skilled-Nursing-Facility-Quality-Reporting-Program/SNF-Quality-Reporting-Program-IMPACT-Act-2014.html

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-of-2014-Data-Standardization-and-Cross-Setting-Measures.html

Value Based Purchasing

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP.html


Audience Q & A


Andy PagePartner | DHG Healthcare

(919) [email protected]

Kristi ChestnuttSenior Manager | DHG Healthcare

(919) [email protected]


Skilled Nursing Facility PPS Final Rule - Fiscal Year 2019 · • Applies to freestanding SNF’s,...

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Transcript of Skilled Nursing Facility PPS Final Rule - Fiscal Year 2019 · • Applies to freestanding SNF’s,...