CMS ANNOUNCES MORE ACCURATE FY 2012 PAYMENTS FOR MEDICARE SKILLED NURSING
Friday, July 29, 2011
CMS ANNOUNCES MORE ACCURATE FY 2012 PAYMENTS FOR MEDICARE SKILLED NURSING FACILITIES
CASE-MIX INDEXES RECALIBRATED TO BETTER ALIGN PAYMENTS WITH COSTS
Also requires a new assessment to capture changes in therapy services, and allocation of group therapy time to ensure payment accuracy
Centers for Medicare & Medicaid Services (CMS) today announced a
final rule reducing Medicare skilled nursing facility (SNF) Prospective
Payment System (PPS) payments in FY 2012 by $3.87 billion, or 11.1
percent lower than payments for FY 2011. The FY 2012 rates correct for
an unintended spike in payment levels and better align Medicare payments
"CMS is committed to providing high quality care to those in skilled
nursing facilities and to pay those facilities properly for that care,”
said CMS Administrator Donald M. Berwick, M.D. "The adjustments to the
payment rates for next year reflect that policy.”
is now recalibrating the case-mix indexes (CMIs) for FY 2012 to restore
overall payments to their intended levels on a prospective basis.The
SNF PPS uses a resource classification system known as Resource
Utilization Groups Version 4 (RUG-IV), which assigns a patient to a RUG
group to determine a daily payment rate. Each RUG group consists of
CMIs that reflects a patient’s severity of illness and the services that
a patient requires in the skilled nursing facility (SNF). In
transitioning from the previous classification system to the new RUG-IV,
CMS adjusted the CMIs for FY 2011 based on forecasted utilization under
this new classification system to establish parity in overall
payments. SNFs have been paid under RUG-IV since Oct. 1, 2010.
found that the parity adjustment made in FY 2011, which was intended to
ensure that the new RUG-IV system would not change overall spending
levels from the prior year, instead resulted in a significant increase
in Medicare expenditures during FY 2011. This increase in spending was
primarily due to shifts in the utilization of therapy modes under the
new classification system differing significantly from the projections
on which the original parity adjustment was based.
data analyzed by CMS since publication of the proposed rule confirmed
the extent of the overpayments that have occurred since implementation
of the RUG-IV system,” said Jonathan Blum, deputy administrator and
director of the Center for Medicare. "We are also making several
improvements to our payment system to strengthen its integrity.”
2012 recalibration of the CMIs will result in a reduction to skilled
nursing facility payments of $4.47 billion or 12.6 percent. However,
this reduction would be partially offset by the FY 2012 update to
Medicare payments to skilled nursing facilities. The update — an
increase of 1.7 percent or $600 million for FY 2012 — reflects a 2.7
percent increase in the prices of a "market basket” of goods and
services reduced by a 1.0 percent multi-factor productivity (MFP)
adjustment mandated by the Affordable Care Act. The combined
MFP-adjusted market basket increase and the FY 2012 recalibration will
yield a net reduction of $3.87 billion, or 11.1 percent.
FY 2012, the recalibration will reflect the intent of the new RUG-IV
system to pay SNF providers more accurately based on the service needs
of Medicare beneficiaries in their care. The adjustment was determined
using claims and assessment data from the first eight months of FY 2011.
It will ensure that payments more accurately reflect the resources
required to provide care for the range of SNF patients, including those
requiring more medically complex care.
is important to note that this recalibration removes an unintended
spike in payments that occurred in FY 2011 rather than decreasing an
otherwise appropriate payment amount. Even with the recalibration, the
FY 2012 payment rates will be 3.4 percent higher than the rates
established for FY 2010, the period immediately preceding the unintended
spike in payment levels.
with recalibrating and updating the SNF PPS payment rates for FY 2012,
this final rule makes a number of additional revisions aimed at
enhancing SNF PPS accuracy and integrity. The rule modifies the patient
assessment windows and grace days to minimize duplication and overlap
in observation periods between assessments. The final rule also:
Clarifies circumstances when SNFs must report breaks of three or more days of therapy.
the distinction between facilities regularly furnishing therapy
services on a 5- or 7-day basis for purposes of setting the date for the
End of Therapy (EOT) Other Medicare Required Assessment (OMRA).
procedures for documenting situations involving a brief interruption in
therapy, where therapy resumes without any change in the patient’s
RUG-IV classification level.
a new Change of Therapy (COT) OMRA to capture those changes in a
patient’s therapy status that would be sufficient to affect the
patient’s RUG-IV classification and payment, even though they may not
increase to the level of a significant change in clinical status.
for the allocation of a therapist’s time for group therapy (defined in
the rule as a single therapist leading four patients in a common
activity) to ensure that Medicare payments better reflect resource
utilization and cost for these services, and specifically that the
therapist’s time is being appropriately counted and reimbursed.
the impact of certain provisions of the Affordable Care Act, and
announces that proposed provisions regarding ownership disclosure
requirements set forth in the Affordable Care Act will be finalized at a
More information on this SNF PPS final rule and other health care related news can be found at www.healthcare.gov, a new web portal made available by the U.S. Department of Health and Human Services. For further information, see www.cms.hhs.gov/center/snf.asp
. A copy of the final rule is available on the Federal Register website at: http://www.ofr.gov/OFRUpload/OFRData/2011-19544_PI.pdf