Updates Proposed for Prospective Payment Systems for Post-acute Care

Posted on May 09, 2018

The Centers for Medicare & Medicaid Services (CMS) recently released proposed rules to update the Medicare prospective payment systems (PPSs) for fiscal year (FY) 2019 for several post-acute care settings. They include inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs) and skilled nursing facilities (SNFs). Unless otherwise noted, provisions of the proposed rules take effect Oct. 1, 2018.

Highlights of the IRF proposed rule include:

  • A net rate increase of 1.15 percent after the 2.9 percent marketbasket update is adjusted for the Affordable Care Act (ACA)-mandated reductions and budget neutrality. IRFs that do not successfully participate in the IRF quality reporting program (QRP) are subject to a 2 percentage point reduction to the marketbasket update.
  • A slight decrease to the labor-related share of the standard operating rate from 70.7 percent to 70.6 percent for FY 2019. This change will result in a small increase to IRFs with a wage index less than 1.
  • A 21 percent increase in the outlier threshold from the current $8,679 to $10,509 for FY 2019, which will result in fewer cases qualifying for an outlier payment.
  • Removal of the uniform data system for medical rehabilitation patient assessment instrument (PAI) and associated function modifiers beginning in FY 2020; many of the function modifiers overlap with data items collected in the quality indicators section of the IRF-PAI.
  • Recognition of the post-admission physician evaluation as one of the required face-to-face physician visits beginning in FY 2019. Currently, the rehabilitation physician must conduct face-to-face visits with patients at least three days per week during the patient’s IRF stay, and the patient must have an additional post-admission physician evaluation that meets specified requirements, including the 24-hour timeframe within which it must be completed.
  • Removal of the National Healthcare Safety Network Facilitywide Inpatient Hospital-onset Methicillin-resistant Staphylococcus Aureus Bacteremia Outcome Measure (NQF # 1716) from the IRF QRP beginning in FY 2020. In addition, beginning in FY 2021, the proposal would remove the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680) from the IRF QRP.

Highlights of the IPF proposed rule include:

  • A net rate increase of 1.4 percent after the 2.8 percent marketbasket update is reduced by the ACA-mandated adjustments and budget neutrality for IPFs that successfully participate in the IPF QRP. IPFs that do not successfully participate in the IPF QRP are subject to a 2 percentage point reduction to the marketbasket update.
  • A slight reduction from 75 percent to 74.8 percent to both the labor-related share of the IPF per diem base rate and the electroconvulsive therapy base rate in FY 2019. This change would provide a small increase in payments to IPFs with a wage index less than 1.
  • A 13 percent increase in the IPF outlier threshold from the current $11,425 to $12,935, which will reduce the number of cases eligible for an outlier payment.
  • The removal of eight measures from the IPF QRP for FY 2020 and subsequent years.

Highlights of the SNF proposed rule include:

  • A net 2.4 percent marketbasket update, as mandated by the Bipartisan Budget Act of 2018.
  • A slight decrease to the labor-related share of the SNF rate from 70.8 percent to 70.7 percent.
  • Replacement of the current resident classification system, the resource utilization groups model (RUGs-IV), with the patient-driven payment model (PDPM) resident classification system, version I (RCS-I), effective Oct. 1, 2019. In the proposed PDPM, the CMS would classify all residents into one of 16 physical and occupational therapy case-mix groups for each of the two components, one of 12 speech-language pathology groups, one of 25 nursing case-mix groups and one of six nontherapy ancillary groups.

In the next few weeks, the MHA will provide members with facility-specific impact analyses of the proposed rules. In addition, the association will make its draft comments available and encourages members to submit their comments to the CMS on each proposed rule by the June 26 deadline. Members with questions should contact Vickie Kunz at the MHA. 

Tags: Medicare, proposed rule, IPF, PPS, SNF, IRF, inpatient rehabilitation facilities, skilled nursing facilities, inpatient psychiatric facilities

Posted in: Member News

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