IRF PPS FY 2014 Update Now & Later - Expectations

Darlene D’Altorio-Jones, PT, MBA-HCM

Senior Consultant, Strategist

Agenda

• IRF Payment (Excluded Bed Status)

– Quick Review IRF PPS Tool & Payment Factors

• FY 2014

– October 1st, 2013 Changes vs. October 1st, 2014 (Reprieve)

• IRF 2014 Standard Payment Updates

• Presumptive Compliance

• Presumptive Diagnosis changes to meet 60% Rule Changes (2014)

• Quality Initiatives – Types and Schedule

• IRF PAI Data Field Change Review

– Quality & Non-Quality Related Changes

• Other 2014 Discussions - (CFR updates)

• Financial Analysis and Impact Highlights / Review

CMS – 1448 – F (Final Rule)

• An excluded bed is a bed that is NOT paid (carved out) from the Acute Care IPPS – Diagnostic Related Group prospective payment method.

• Inpatient Rehab and Psychiatric services were ‘excluded ‘ from a standard DRG payment methodology (early 1980’s) because they provided UNIQUE and special care for specific populations of patients.

• EXCLUDED units - follow very specific federal guidelines to be paid for services provided to Medicare patients.

• Code of Federal Regulations (CFR) outlines these laws; • Not optional standards,

• Minimum requirements that must be followed to demonstrate worthiness of payment for (medically necessary) services at an IRF level of care.

Excluded Bed?

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IRF PPS = IRF PAI Data Set Guides Payment

IRF PAI DATA TOOL – Drives THE CMI DETERMINATION

Impairment Group

Codes (Condition)

Special Codes that identify the main reason for rehab clinical

condition – subsets of RIC

Rehabilitation

Impairment Categories

(RIC)

21 - Major Diagnostic Divisions of which 13 have capacity to declare

REHAB intensive resource worthiness (60% rule). There are 87

‘levels’, each with 4 tiers that reflect resource expectations to manage

the pt. Eg., stroke 10 levels each with 4 tiers = 40 different payment types.

LEVELS equate to Case Mix Groups (CMG) – 353 including the 5 special

CMG’s. Together (tier + CMG) = HIPPS code. This code with date of

transmission to CMS is transferred to the UNIFORM BILL.

Functional

Measurement &

Assignment of Case Mix

Groups

Functional assessment based on 17 of the 18 items measured –

determined within 3 days of admission (excludes tub/shower

transfers); 85% of CMG acuity (Case Mix Index – CMI) is driven by

MOTOR SCORE alone, some reference age &/cognition to drive

payment.

Co-morbidities

(4 Tiers)

A condition secondary to principal diagnosis; represents resource

costs to manage patient above & beyond expected conditions within

that level.

5 SPECIAL CMG’s Special conditions / short stays – patient expiration codes

Historical Standard Payments

• Regulatory driven rates published in IRF rule that affects each Oct 1st FY start.

• A combination of the acuity (CMI) x this standard rate is the baseline to applying the facility adjuster formula for actual payments received.

Payment Component Impacts • CMG Acuity multiplied by the Federal ‘STANDARD RATE’ begins formula

value.

• Facility and FEDERAL Adjustments (Subject to Statutory Annual Changes)

• Case Mix Indices (historical & cost report derivatives – (2014 reflects 2012 Cost Reports)

• Wage, Labor Share

• Budget Neutrality

• Rural or Urban Location Status

• ACA Amendments (Accountable Care Act Amendments) & other rules

• LIP Adjustments

• Teaching Status

• An 11 to 16 step process to determine Facility Level Payment depending if teaching

based facility.

• Acknowledge variations in costs of care that is not specifically represented in IRF PAI

data aggregation alone.

• ACKNOWLEDGE that if you did NOT submit Quality Data (voluntary for 2013); you

will see a reduction of 2.0% in the market basket formula for this fiscal year.

2014 FORMULA – Standard Payment

Impact for Non-Participation QRP • Non-

Participant in Quality Reporting Fiscal Year 2013.

• 2% Payment Reduction

• $291 < per 1.0 CMI treated.

1.018 - .02 = .998

Standard Payment & Facility Adjustment Formula

• Special CMG’s & Transfer Payments

• Short Stay – Three Days or Less

CMG 5001 Includes a patient

admitted that did not meet intensity of

therapy care within first 7 days of

service since ‘ramp up of 10 days’ no

longer permitted.

• Death - CMGs 5101 – 5104

• Transfer Rule (Another Medicare

paid level of care) prior to

achieving the CMS ALOS.

• Payment is (CMG Payment/

CMG ALOS) x actual LOS +

50 % of Per Diem amount)

Special Payment Types

• Outlier threshold is $9,272 • Maintain payments at approximately 3 percent of total estimated

aggregate IRF payments for FY 2014. (2013 was $10,466)

• CMS calculates the estimated cost of a case by multiplying the IRF’s overall cost to charge ratio by the Medicare allowable covered charge.

• If the estimated cost of the case is higher than the adjusted outlier threshold, CMS makes an outlier payment for the case equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold.

Outlier Payments – Far Exceeds CMG $ Amt.

Late Transmission Penalty – CR 3885

• Under the IRF PPS regulations, if the actual transmission date is

later than 10 calendar days from this mandated transmission date

(day 17), the IRF-PAI data is considered late.

• The IRF receives a payment rate that is 25 percent less than the

payment rate associated with the case-mix group (CMG).

Consequently, if the IRF transmits the patient assessment data 28

calendar days or more from the date of discharge, the penalty is

applied.

• Revisions to the list of diagnosis codes that are used to determine presumptive compliance under the “60 percent rule” are applicable for compliance review beginning October 1st, 2014. Through COMMENT some originally proposed for removal WERE RETAINED. SEE TABLE 8. Not Retained TABLE 9. (9 pages)

Presumptive Compliance Dx Codes – Delay to 10/2014

Arthritis Codes

• Arthritic Presumptive list revealed utilization patterns that indicated that some arthritic codes were used far more frequently than CMS anticipated. Those codes also did not provide any information as to whether the patients met the severity and prior treatment requirements for the medical conditions that may be counted toward an IRF’s compliance % under presumptive compliance methodology.

• Additional information beyond the presence of the code is necessary to determine if the medical record would support inclusion of individuals with the arthritis and arthropathy conditions. These will be removed – MAC’s will perform manual review to meet conditions required for presumption.

Codes Removed Discussion

• Beneficiaries with some congenital anomalies diagnosis likely would not be expected to actively participate in an intensive rehabilitation program, CMS does not believe such cases should automatically be included in an IRF’s presumptive compliance percentage.

• What may happen in congenital deformity codes that are removed when present in a patient?

• “If a patient with one of these conditions were able to participate in the intensive rehabilitation services provided in an IRF, then the MAC would be able to count that case toward an IRF’s 60 percent rule compliance percentage upon medical review.”

Presumptive – Congenital Anomalies

• Removal of certain ICD-9-CM codes for unilateral upper extremity amputations from the presumptive methodology list.

• Expect some patients with these upper extremity amputations will not require close medical supervision by a physician or weekly interdisciplinary team conferences to achieve their goals, while others may require these services.

• As long as the patient does not have any other comorbidities that have caused significant decline in his or her functional ability that, in the absence of the unilateral upper extremity amputation, would require treatment in an IRF, we do not believe that the patient could be presumed to meet the regulatory requirements for inclusion in an IRF’s 60% compliance threshold.

Unilateral Upper Extremity Amputations Diagnosis Codes

• Some TB codes, Post-herpetic polyneuropathy, Louping ill (not endemic to U.S.), Brain Death, Myasthenia gravis without (acute) exacerbation, Other specified myotonic disorder, Periodic paralysis, Brachial plexus lesions, Other nerve root and plexus disorders (be specific), some burns, deep necrosis, unspecified hemiplegias, some late effect CVA disease codes, some skull fx’s (unspecified types), some unspecified levels of SCI when with closed fractures were also deleted from PRESUMPTION. CMS declined adding Parkinsons.

• GOING FORWARD – specificity is key and rationale must always defend primary purpose in absence of the primary diagnosis for any of these to count if medical review of the chart was performed.

Misc. Dx Codes Removed

• CMS added 348.31—Metabolic encephalopathy-- to the list with the other toxic encephalopathy codes to ensure that IRFs can code to the highest level of specificity.

Added Code

• Since the publication of the CY 2013 OPPS/ASC final rule, the NHSN CAUTI measure has not changed.

• CMS has not removed, suspended, or replaced this measure; it remains an active part of the IRF QRP.

• IRFs should continue to collect and submit pressure ulcer measure data during the first three quarters of CY 2014 using the IRF-PAI released on October 1, 2012 for the FY 2016 IRF PPS annual increase factor. CMS is not making any changes to the application of measure #0678 finalized in the CY 2013 OPPS/ASC final rule for the FY 2015 and FY 2016 IRF PPS annual increase factors.

• CMS has delayed public reporting of pressure ulcer measure RISK ADJUSTED data until they amend the IRF-PAI to add the data elements necessary for risk-adjusting NQF #0678. Once this is completed, CMS will adopt the NQF endorsed version of the measure covering the IRF setting through rulemaking.

2014 Quality Initiatives - One change

• In the FY 2014 IRF PPS proposed rule (78 FR 26880), CMS proposed to adopt the CDC developed Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) measure that is currently collected by the CDC via the NHSN.

• Reduced morbidity and mortality related to influenza virus infection among patients, aligning with the NQS’s aims of better care and healthy people/communities.

• IRFs will submit their data for this measure to the NHSN. (Like CAUTI)

• NHSN will submit data to CMS on behalf of the facility. THE FY 2016 IRF PPS annual increase factor data collection will cover the period from October 1,2014 (or when the vaccine becomes available) through March 31, 2015. Required ONE TIME report @ end of season with a numerator/denominator - 3 required categories of staff as defined by the NHSN protocol, including payroll employees, licensed independent practitioners, and students/trainees/volunteers.

2014 Quality Initiatives – One Change

2014 Quality Initiatives – One Change

Recall the CMS fiscal years begin OCT 1st each year.

Quality Initiatives – Delayed > 10/2014

http://www.cms.gov/Outreach-and-education/outreach/OpenDoorForums/ODF_Hospitals.html

The Centers for Medicare & Medicaid Services (CMS) is seeking input from providers related to the implementation of the new Inpatient Rehabilitation Facility Quality Reporting Program (QRP) established in the Patient Protection and Affordable Care Act, also known as The Affordable Care Act,

Section 3004. Therefore, Health Care Innovation Services, (HCIS), is seeking the voluntary assistance of providers to participate in a brief interview on behalf of CMS, to help us better understand the burdens imposed on providers, how providers ensure accuracy of data, how the QRP has impacted

patient services and outcomes, and what CMS can do in the future to improve the program, and processes. We believe that this process, and the information gathered, will provide valuable information for CMS as it continues to develop this program and is essential to guiding the development of the quality reporting program. We believe that a partnership will continue to facilitate an important process in which provider input is shared with CMS so that we are able to identify strengths, weaknesses, priorities, and how the program might be improved.

If you are interested in participating, please contact Pat Hanson at phanson@hcareis.com.

Quality Initiatives – Beyond 2015

NON-Quality related IRF PAI changes – Effective October 1st, 2014

The following will be amended items in the IRF-PAI:

● Item 15A: Admit From (Formerly item 15)

● Item 16A: Pre-Hospital Living Situation (Formerly item 16)

● Item 44D: Patient’s Discharge Destination/Living Setting

(Formerly item 44A) Each will be the following listed options:

● 01- Home (private home/apt., board/care, assisted living, group home)

● 02- Short-term General Hospital

● 03- Skilled Nursing Facility (SNF)

● 50- Hospice

● 62- Another Inpatient Rehabilitation Facility

● 63- Long-Term Care Hospital (LTCH)

● 64- Medicaid Nursing Facility

● 65- Inpatient Psychiatric Facility

● 66- Critical Access Hospital

● 99- Not Listed

IRF PAI Data Field Changes – Delayed 10/2014

• In addition to finalizing the proposed status code changes, we will also add the following status code options, which are identical to the options on the UB-04 claim form to items

15A: Admit From; 16A: Pre-hospital Living Setting; and 44D:

Patient’s discharge destination/living setting:

• 04- Intermediate Care Facility

• 06- Home under care of organized home health service organization

• 51- Hospice (Institutional Facility

• 61- Within institution to swing bed

IRF PAI Data Field Changes – Delayed 10/2014

Item 20 A & 20 B: Primary and Secondary Source of Payment -

● 02- Medicare- Fee for Service

● 51- Medicare- Medicare Advantage

● 99- Not Listed

Following Items Added:

● Item 25A: Height (To make presumptive compliance BMI decision based on IRF PAI)

● Item 26A: Weight (To make presumptive compliance BMI decision based on IRF PAI)

● Item 24: Comorbid Conditions (15 additional spaces) And ICD-10 compliant.

● Item 44C: Was the patient discharged alive?

● Signature of Persons Completing the IRF-PAI

IRF PAI Data Field Changes – Delayed 10/2014

To delete the following items from the IRF-PAI:

● Item 18: Pre-Hospital Vocational Category

● Item 19: Pre-Hospital Vocational Effort

● Item 25: Is patient comatose at admission?

● Item 26: Is patient delirious at admission?

● Item 28: Clinical signs of dehydration

Technical corrections at items 44D, 44E and 45 to conform to the additions above. We believe that adding language to these items indicating that the question can be skipped depending upon how item 44C is answered, will help reduce submission errors for

providers when filling out the IRF-PAI.

Quality vs Non-Quality IRF PAI Changes – Oct 2014

Quality vs Non-Quality IRF PAI Changes – Oct 2014

• Signature page for person preparing/entering data onto the IRF PAI Document.

• Unhealed Ulcers

• Stage I

• State 2

Quality Related IRF PAI Changes

• Unhealed Ulcers

• Stage 3

• State 4

Quality Related IRF PAI Changes

• UnStageable

• Dressing

• Slough

• Deep Tissue Injury Suspected

Quality Related IRF PAI Changes

• Pressure Ulcer RISK FACTORS PRESENT

• PVD

• PAD

• DM

• Diabetic Retinopathy

• Diabetic Nephropathy

• Diabetic Neuropathy

• Patient offered Influenza Vaccinations

Quality Related IRF PAI Changes

Disaster Waiver Request Process - QRP

• In the original rule establishing a prospective payment system for IRF Medicare payment stated that that there would be no administrative or judicial review, under sections 1869 and 1878 of the Act or otherwise, of the establishment of case-mix groups, the methodology for the classification of patients within these groups, the weighting factors, the prospective payment rates, outlier and special payments and area wage adjustments.

• The regulatory text has been at times improperly interpreted to allow review of adjustments authorized to IRFs.

• CMS is clarifying regulation text at §412.630 by deleting the word “unadjusted” so that the regulation will clearly preclude review of “the Federal per discharge payment rates.” This clarification provides for better conformity between the regulation and the statutory language regarding IRF reimbursement.

Other CFR Discussions – 412.630

According to the regulations at §412.29(d), to be excluded from the inpatient prospective payment system (IPPS) and instead be paid under the IRF PPS, a facility must “have in effect a preadmission screening procedure under which each prospective patient’s condition and medical history are reviewed to determine whether the patient is likely to benefit significantly from an intensive inpatient hospital program.

• However, in §412.622(a)(4)(i)(D), we specify that this requirement applies to patients “for whom the IRF seeks payment” from Medicare. We believe that the analogous requirement in §412.29(d) should also clearly state that it applies only to patients for whom the IRF is seeking payment directly from Medicare.

• CMS requires rehabilitation physician review and concurrence of a patient’s preadmission screening prior to the IRF admission only for Medicare Fee-For-Service Beneficiaries.

• Final Decision: Based on consideration of the comments received on the proposed change to §412.29(d), we are finalizing this change, effective for IRF discharges occurring on or after October 1, 2013.

• CMS will require that the basic preadmission screening procedure requirement remain in place for all patients regardless. Criteria worksheet for IRF may be amended.

Other CFR Discussions – 412.29 Clarity

• Requirements at §412.25 (at §412.25(a)(1)(iii)) is that the institution of which the IRF unit is a part must have “enough beds that are not excluded from the prospective payment systems to permit the provision of adequate cost information, as required by §413.24(c) of this chapter.” Previously CMS had not specified how many beds.

• The institution of which the IRF unit is apart must have at least 10 staffed and maintained hospital beds that are not excluded from the IPPS, or at least 1 staffed and maintained hospital bed for every 10 certified IRF beds, whichever number is

greater.

• Review YOUR Provider number – are you viewed by CMS as a UNIT? If so do you pass this test?

Other CFR Discussions – Non-Exclusion Beds

• Provider Numbers – IRF Provider numbers are 6 digits.

• The 3rd digit of a unit provider is a zero replaced by a letter. A Free standing hospitals 3rd digit is a # ‘3’.

• Budgeting factors:

• Possible change in bed # licensure as IRF qualified beds if at some point your were a ‘unit’ and there was a change in location/owner or other factors that could impact status given the minimum number beds NOT satisfied.

Non-Exclusion Beds / IRF UNIT Status

• Presently there are 234 Free Standing Rehab Hospitals listed in the CMS rate setting file.

• 216 Urban; 18 Rural. There are 1,134 IRF’s in total.

• CMS is implementing this change effective for IRF discharges occurring on or after October 1, 2014 (a one-year delay in the effective date) to give IRFs affected by this change adequate time to comply with state certificate of need or other state licensure laws.

• How else might this impact you? • Medical Director for Rehab Unit = 20 hours

• Medical Director for a Free Standing Rehabilitation Hospital = 40 hours. • Essentially all other mandates are equivalent.

Non-Exclusion Beds / IRF UNIT Status

Financial Analysis / Impact Highlights

• CMS estimates that 363,629 cases or 98.7% will have less than a 5% CHANGE either way. The values for the remainder 1.3% are shown in table 2.

CMS states that CMG relative weight revisions in a budget-neutral manner (as described in the rule), total estimated aggregate payments to IRFs for FY 2014 will not be affected as a result of the CMG relative weight revisions.

Cases - Distributional Change Effect

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2013 to 2014 Standard Rate Stroke Compare

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2013 to 2014 Standard Rate Compare LE Replacement

Affects By RIC /CMG Breakdown

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• CMG Weights & ALOS Table • Relative Weights for 353 CMG’s:

• 174 or 49% of cases weighted more than 2013 Rates

• 179 or 51 % of cases weighted less than 2013 Rates

• Affect of Standard Payment @ $14,846 rate vs $14,343

• 316 or 90 % Standard Payment > 2013 Standard

• 37 or 10 % Standard Payment < 2013 Standard

• ALOS (Transfer Rule) Compared to previous rule:

• 169 or 48 % LOS < 2013 Published Rule

• 68 or 19 % LOS has not changed from 2013 Rule

• 116 or 33% LOS > 2013 Published Rule

1448-F / Financial Analysis Impact Discussion

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Comparing 2013 to 2014 Published Values - Stroke

Comparing 2013 to 2014 Published Values Replacement LE

• A near even split in the split of higher vs. lower published CMI by Tier Level for all RIC Levels.

CMI Changes 2014 by Tier

After Applying Facility Adjusters

After Facility Adjusters Applied

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How Inpatient Rehab Providers Are Paid

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http://mediserve.com/resources

Wage Index

Disproportionate Share

Rural or Urban

Teaching Status

Outlier Payments

Short Stays

Expired Patients

http://mediserve.com/resources

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• Timely IRF PAI assessment is critical to confirm appropriate Case Mix Index (CMG) being applied.

• Validation and completion of functional measurement and admit PAI items guide expectations towards clinical resource needs and utilization.

• Staff must understand the importance of accurate measurement as it leads to appropriate payment to match the intensity/care cost burden required at the individual patient level.

Scoring Accuracy Paramount

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• We will continuously be expected to provide more for same or less compensation.

• Transparency and continued focus on Quality Indicators will grow more specifically to the PAC patient audience. Patients will be driven to the provider level that demonstrates greatest outcomes for best VALUE.

• Improved communication and FOCUS on the specific POC for the individual patient based on their needs will drive the most margin and patient satisfaction.

• Keep focus on impending barriers and the teams ability to eradicate those that stand in the way of the discharge plan.

• Focus at this level always meets the individuals needed LOS rather than predetermined averages that are suppose to be used for TRANSFER RULE specifically.

• Time value of money / outcomes = Focus

Challenges

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• Review facility ability to meet discharge expectations against YOUR own outcomes.

• Do you manage well to individual patient expectations/abilities?

• Do you have the tools and are you using the tools you may have to guide best performance for patients and your facility?

• Coverage Criteria (2010 Rules) will not go away!

• Getting paid and keeping payment requires leadership vigilance.

• MAC & RAC audits look very specifically toward regulatory mandates.

• PREPARATION vs. REACTION is the best policy to reduce surprises.

Challenges

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• Keep your hard earned cash!

• Know your numbers and continually audit for coverage criteria compliance.

• Margins can only be managed well when communication and expectations are clearly defined from front to end in the patients’ experience.

• Accountability / benchmarks toward expected is a continuous process.

Monitor & Correct

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Questions?

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