Medicare Part A SNF Payment System Reform: Introduction to Resident Classification System - I ZIMMET HEALTHCARE 2018

Transcription

1 Medicare Part A SNF Payment System Reform: Introduction to Resident Classification System - I

2 Introduction to the Resident Classification System - I Concepts Structure Implications

3 RCS is NOT the Unified Post-Acute Payment System IMPACT Act mandated MedPAC to outline a unified payment system that would replace the four current post-acute care Medicare payment systems (SNF, HHA, IRF, LTCH) Objective is to base payment on patient characteristics rather than setting or amount of therapy furnished (significant redistribution of PAC dollars) IMPACT Timeline: Propose system by 2023, then implement MedPAC demonstrated that the system is highly feasible & accurate; recommends implementation in 2021 with 3-year optional phase-in See June 2017 MedPAC Report to Congress, chapter 1 for details

4 About RCS-I Advanced Notice of Proposed Rulemaking (5/4/17; CMS-1686) Public comment period extended from 6/26 to 8/25/17 and left open ended Based on extensive research and TEPs (possible refinements) Target date is October 1, 2018 Likelihood of implementation? Budget Neutrality assumed (Parity adjustments) No mention of phase-in / blend-in but possibility Improvement over RUGs? Shift from Volume to Patient Characteristics as $ driver

5 About RCS-I NO CHANGE IN MEDICARE CLINICAL / TECHNICAL ELIGIBILITY REQUIREMENTS Focus on reducing administrative burden for providers MDS remains basis for rate setting, but 5-day sets the Composite score for the entire benefit period (assuming no discharges or sig. changes) Remaining PPS MDS schedule is eliminated, including COTOs Sets up benchmarking mechanism from admission discharge Recognizes disproportionate costs during first days of stay Frequency / Amount of therapy does not impact reimbursement Therapy is just another component of the care plan Nursing acuities, Diagnosis coding & certain Ancillaries drive revenue

6 RCS Structure RUG-IV contains 3 rate components: Therapy, Nursing (including NTAs) and Overhead Blended into one of 66 distinct per diem rates RCS includes 5 distinct, (4 variable) rate components: PT/OT (30 categories) SLP (18 categories) Nursing (43 RUGs) Non-Therapy Ancillaries (6 levels) Overhead / Non-Case Mix Adjusted (1 rate) How many possible combinations??? N T O Per Diem RUG 1 of of 18 Composite 1 of 43 1 of 6

7 Possible RCS Rate Combinations PT/OT: 30 SLP: 18 Nursing: 43 NTA: 6 Overhead: 1 While there are technically 139,320 possible composite combinations, many are mutually exclusive 139,320

8 PT/OT SLP Nrsng NTA OH 30 categories 18 categories 43 RUGs 6 groups 1 CBSA RCS Composite RCS: Where Do We Start? One step at a time Each component has its own grouping process using different variables and scoring methodologies

9 Why is the Patient Here? 10 Clinical Categories capture the range of general resident types found in SNFs MDS Section I: ICD-10 code Primary reason for SNF stay DRG Mapping Major Joint Rep. or Spinal Surgery Non- Orthopedic Surgery Acute Neurologic Non-Surgical Orthopedic/ Musculoskeletal Orthopedic Surgery (Except Major Joint) Cancer Acute Infections Pulmonary Cardiovascular & Coagulations Medical Management

10 The 10 categories are collapsed into 5 for PT/OT Major Joint Rep. or Spinal Surgery Non- Orthopedic Surgery Acute Neurologic Other Orthopedic Medical Management Major Joint Rep. or Spinal Surgery Non- Orthopedic Surgery Acute Neurologic Non-Surgical Orthopedic/ Musculoskeletal Cancer Orthopedic Surgery (Except Major Joint) Acute Infections 2 for SLP Acute Neurologic Non- Neurologic Medical Management Pulmonary Cardiovascular & Coagulations

11 Physical / Occupational Component Calculation Clinical Category (5) Functional Score (3) Cognitive Impairment (2) Major Joint Rep. or Spinal Surgery Other Orthopedic Non-Orthopedic Surgery Acute Neurologic Medical Management Intact or Mildly Impaired Moderately or Severely Impaired Clinical: MDS Section I8000 / I0020 Primary reason for SNF stay (ICD-10) Functional: G Trans, Eating, Toileting: Self Perf only Cognitive: C Cognitive Function Scale All patients score in one PT/OT group no matter if they receive therapy (or how much)

12 PT/OT Functional Score RCS PT/OT scoring differs from RUG-IV ADL system Transfers, Eating and Toileting Self-Performance scores only Each ADL scored on a 0 6 scale; (v. 4 in RUG-IV) 0 18 point range Unlike RUGs, higher point totals represent lower dependence; Fully functional residents are reimbursed at the highest rates Greater need reduces PT/OT rate but increases RCS Nursing RUG The difference in net impact varies for each component score Nursing increase may or may not exceed PT/OT increase Any inflexible capture strategy may be counter-productive

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14 RCS: PT/OT Functional Score v. RUG-IV: Self-Performance Scale RCS-I Scoring

15 PT/OT Case-Mix Classification Groups See handout for complete listing of case-mix groups

16 Speech Language Pathology Component Calculation Clinical Category (2) Swallowing Disorder or Mechanically- Altered Diet (3) SLP Related Comorbidity or Mod. to Severe Cog Imp (3) Acute Neurologic Non- Neurologic Both Either Neither Both Either Neither MDS Section Clinical: I8000 Sw Dis: K0100Z MA Diet: K0510C2 Comorb: Misc. Cognitive: C (CFS) All patients score in one SLP group no matter if they receive therapy (or how much)

17 SLP Related Comorbidities

18 SLP Case-Mix Classification Groups See handout for complete listing of case-mix groups

19 PT/OT & SLP: Cognitive Function New cognitive measure: Cognitive Function Scale (CFS) Combines Brief Interview for Mental Status (BIMS) and Cognitive Performance Score (CPS) into one scale Note: Impairment reduces PT/OT but increases SLP component. PT/OT rate reduction exceeds SLP enhancement (almost always).

20 43 nursing RUGs Nursing Case-Mix Classification RUG-IV Reimbursement drivers, ADL scoring & splits and hierarchy remain intact Minus Rehab RUGs Reweighted indices 19% HIV/AIDS rate enhancement only applies to this component Triggered by ICD-10 code B20 on the UB-04 See handout for complete listing of case-mix groups and comparison of RUG-IV to RCS CMI weights

21 NTA Group Classification Non-Therapy Ancillaries Based on the number of services and conditions Hospital look-back as allowed in RUG-IV Greatest rate impact for days 1-3 See handout for complete listing of NTA service / condition drivers and related Points

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23 RCS Rate Composite Calculation 5-day MDS (ARD 1 8) establishes Composite for the entire benefit period with limited exceptions Significant Change / Readmissions Each component has a Base Rate adjusted by CBSA Multiply each Base Rate by respective CMI weight Variable Per Diem Adjustment Factors PT/OT and NTA components decrease as the benefit period progresses (see handout for detail on Base Rates & VPDA)

24 Significant Change Assessments / Readmissions SCSA would change the resident s RCS-I classification but NOT reset Variable per diem adjustment schedule Interrupted Stay Policy: Resident discharged from SNF and returns to same SNF within 3 calendar days: Stay is treated as a continuation for purposes of RCS classification and VPDA Resident readmitted to the same SNF more than 3 calendar days after discharge, or in any case where resident is readmitted to a different SNF: Resident receives a new 5-day; RCS and VPDA are reset to Day 1 PPS Discharge Assessment required (CMS to add items to track therapy minutes over the course of a resident s stay)

25 Possible RCS Audit Scope Technical & Clinical Eligibility (7 day/week Nursing, 5/Therapy) No therapy levels to audit cannot be excessive Rationing therapy (too little?) Nursing RUG drivers and end splits Lock & Drop patterns ADL scoring NTA drivers Medical necessity, method of administration, supporting documentation Justification for Significant Change assessments DRG ICD-10 assignment ( Mapping )

26 DRG Mapping 757 active MS-DRGs in 2017 Medicare Severity Diagnosis Related Group: The system of clinically classifying a Medicare patient s hospital stay into groups in order to set payment Diagnoses drive variable RCS components Link to MDS: ICD-10 Coding Section I: Primary reason for SNF stay Secondary & Tertiary codes DRG ICD-10

27 RCS Operations Implications Admissions decisions Profitability profiles change Target length of stay Billing and corrections; time limitations? Financial modeling / revenue projections Revenue allocations Impact on managed care contracts / rates / APMs Hospital-based resurgence? Assessment burden MDS staffing & qualifications No margin for error on 5-day We need New Analytics

28 Therapy Implications No treatment minimums, but ANPRM specifies limits of 25% each for Concurrent and Group of whatever formal therapy is provided No RUG / COTO management Department staffing requirements and ratios (% Assistants, Techs) Development of therapy-centric programs under the direction of licensed staff (Activities, Restorative Nursing) Alternative modalities (Acupuncture, Therapeutic Massage, Chiropractic) Outsource v. In-House management considerations: Pricing therapy component: no direct link to reimbursement may incentivize over/under-utilization depending on contract structure Reconciling Dx to need, inverse ADL / Cognitive revenue issues

29 RCS Reimbursement Implications Facility-specific revenue transition analysis: Budget neutral redistribution creates Winners & Losers Comparison to RUG-IV transition projections Changes in Provider behavior Parity adjustment / Recalibration risk Relative values among rate components Realizable value of non-therapy payment drivers Reimbursement-sensitivity & documentation requirements Diagnosis mapping & coding Understanding NET revenue impact of ADL & Cognition coding Timing of NTA drivers

30 Simplified examples using 2017 NYC rates RCS rate simulator available at zhealthcare.com Non-medically complex post-knee replacement Moderate ADL assistance No co-morbidities or NTA services 2 hours of therapy per day, 6 days per week RUG-IV score = RUB $730.96

31 Simplified examples using 2017 NYC rates RCS rate simulator available at zhealthcare.com Dialysis Moderate ADL assistance Wound, IV meds, Transfusion 65 minutes of therapy per day, 5x per week RUG-IV score = RHB $491.79

32 Simplified examples using 2017 NYC rates RCS rate simulator available at zhealthcare.com Impact of capturing Respiratory Therapy and Depression

33 Medicare Data Analysis Market Analysis DRG 194 DRG 247 DRG 870 DRG 373 DRG 292 DRG 190 DRG 470 Hospital Medicare Claims Submitted Facility CBSA ,191 1,214 1,545 37% 35% 33% 31% 29% 27% Medicare Advantage Penetration 34.9% 32.2% 26.1% DRG 872 DRG 291 DRG 871 1,875 1,913 2,150 25% County State Nation 238,056 FFS BENEFICIARIES Market Saturation and Utilization, by Facility County 10,879 SNF USERS 88 SNF PROVIDERS AVG. USERS PER PROVIDER 4.6% USERS OF FFS BENEFICIARIES

34 Medicare Data Analysis Hospital Referral Sources Hospital Referrals to ABC Care Center 250 $3,500, $3,000,000 $2,500, $2,000, $1,500,000 $1,000,000 $500,000 0 Hospital 1 Hospital 2 Hospital 3 Hospital 4 Hospital 5 $0 Referrals Medicare Payments

35 Medicare Data Analysis SNF Part A Referrals by Hospital SNF Referrals (#) Referrals (%) ALOS Cost per Admit 5 Star Re-Hosp (%) D/C Community (%) Facility # % 31.5 $20,349 **** 23.5% 58.2% Facility # % 33.6 $21,874 *** 18.2% 60.5% Facility # % 27.1 $17,615 ***** 17.9% 61.4% Facility # % 28.9 $19,508 ** 22.5% 57.6% Facility # % 30.2 $19,328 ***** 21.0% 60.1% Facility # % 34.6 $22,075 *** 20.4% 59.7% Facility # % 35.7 $23,276 **** 17.7% 57.9% Facility # % 28.1 $18,518 *** 18.9% 52.2% Facility # % 30.9 $19,745 * 26.4% 54.5% Facility # % 36.9 $24,871 *** 23.4% 57.8%

36 Medicare Data Analysis Referring Hospital Pain Points XYZ Hospital DRG Volume & Re-Hospitalization Rate 1,400 1,200 1, ,156 1, DRG 871 DRG 291 DRG 470 DRG 190 DRG 373 DRG 194 DRG 885 DRG % 30% 25% 20% 15% 10% 5% 0% Medicare Claims Re-Hospitalization

37 Medicare Data Analysis Episodic Cost Competitive Analysis Facility Episodic Cost Competitor Episodic Cost Respiratory Episodic Cost Comparison Facility Competitor Clinical Category Episodes Episodes Pneumonia Sepsis 75 $14, $15,874 AMI Major Joint 68 $8, $9,254 UTI CHF 64 $11, $13,654 Stroke Stroke 62 $17, $16,958 CHF UTI 55 $14, $17,878 Major Joint AMI 49 $10, $12,568 Sepsis Pneumonia 46 $12, $12,085 Respiratory 41 $13, $11,097 $0 $3,000 $6,000 $9,000 $12,000 $15,000 $18,000 Competitor Episodic Cost Facility Episodic Cost