Patient Driven Payment Model 101

Patient Driven Payment Model 101 MARK MCDAVID, OTR, RAC-CT Presented by

Why a New Payment Model? MedPAC has raised concerns about: Provider advantage Payment inequities for different patient types Patient selection being driven by payment Concerns about overutilization of therapy MedPAC has been focused on PAC payment reform Aligning cost and payment Equitable payments across patient groups Pay for performance 2

OIG Reports Over the Years Questionable billing by skilled nursing facilities (December 2010) Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More Than a Billion Dollars in 2009 (November 2012) The Medicare Payment System for Skilled Nursing Facilities Needs to be Reevaluated (September 2015) 3

CMS Goals Limit complexity of the new payment system 66 Payment categories vs 28,800 Address financial incentives described by MedPAC, OIG, and CMS Payment model accuracy that will compensate facilities based on complexity of the patient 4

Acumen CMS Contractor Previous (current) PPS System Therapy Nursing Non-case mix Index Maximized Proposed PPS System PT Component OT Component ST Component Non-therapy ancillary component Nursing component Non-case mix component Not Index Maximized 5

Patient Driven Payment Model (PDPM) CMS Proposes Complete overhaul of the Medicare A payment system (replacing RUGs-IV) On April 27, 2018 CMS released a SNF PPS Proposed Rule for FY 2019 that included the PDPM for FY 2020 Comments were due to CMS by June 26, 2018 by 5pm 6

PDPM 6 Components CMS Proposes 5 case-mix adjusted components and 1 non case-mix adjusted component. Physical Therapy Component Occupational Therapy Component Speech-Language Pathology Component Nursing Component Non-Therapy Ancillary Component Non Case-mix Component (room and board, admin cost, capital-related costs) + wage adjustment 7

Patient Driven Payment Model PT Component SLP Component Nursing Component NTA Component OT Component Resident Non Case-Mix Component 8

Patient Driven Payment Model Note: All residents would be classified into PT, OT, and SLP classification regardless of whether they are on therapy case load (likely being assigned the lowest CMI for the these components). 9

Physical and Occupational Therapy Case-Mix Classification 10

PT and OT Components Unlike RCS-I, in the PDPM the PT and OT Components are calculated together but paid separately based on the casemix. Drivers of PT and OT component Primary reason for skilled stay Function score 11

PT and OT Components I8000 ICD-10-CM will classify the patient into one of the 4 Clinical Categories. Multiple ICD-10-CM codes will point to more than one Clinical Category In these cases, the Clinical Category will be further delineated by including the ICD-10-PCS (procedure code) on the second line of I8000 This is due to post-surgical patient needs may be much different than non-surgical patients 12

4 PT/OT Clinical Categories Major Joint Replacement or Spinal Injury Non-Orthopedic Surgery and Acute Neurologic Other Orthopedic Medical Management 13

PT and OT Functional Score CMS Proposes to use 10 Section GG items to calculate the PT and OT Function Score. This includes 4 late loss ADLs and 2 early loss ADLs Two bed mobility items Three transfer items One eating items One toileting item One oral hygiene item Two walking items GG goes from a 6-point scale (with 3 not attempted codes) to 0-4 point scale for Function Score purposes 14

PT and OT Functional Score Construction (Except walking) Responses Score 05, 06 Set-up assistance, Independent 4 04 Supervision or touching assistance 3 03 Partial/moderate assistance 2 02 Substantial/maximal assistance 1 01, 07, 09, 88 Dependent, Refused, N/A, Not Attempted 0 More Care Needed Table 16 CMS 1696-P 15

PT and OT Functional Score Construction for Walking Items Responses Score 05, 06 Set-up assistance, Independent 4 04 Supervision or touching assistance 3 03 Partial/moderate assistance 2 02 Substantial/maximal assistance 1 01, 07, 09, 88 Dependent, Refused, N/A, Not Attempted, Resident Cannot Walk* *Coded based on response to GG0170H1 (Does the resident walk?) 0 More Care Needed Table 17 CMS 1696-P 16

Proposed Section GG Items Included in PT and OT Function Measure Section GG Item Score GG0130A1 Self-care: Eating 0-4 GG0310B1 Self-care: Oral Hygiene 0-4 GG0130C1 Self-care: Toileting Hygiene 0-4 GG0170B1 Mobility: Sit to lying 0-4 (avg of GG0170C1 Mobility: Lying to sitting on side of 2 items) bed GG0170D1 GG0170E1 GG0170F1 Mobility: Sit to stand Mobility: chair/bed-to-chair transfer Mobility: Toilet transfer 0-4 (avg of 3 items) GG0170J1 Mobility: Walk 50 feet with 2 turns 0-4 (avg of GG0170K1 Mobility: Walk 150 feet 2 items) 17 Table 18 CMS 1696-P

PT and OT Case-mix Classification Groups Clinical Category Major Joint Replacement or Spinal Surgery Section GG Function Score PT OT Case- Mix Group PT Case- Mix Index OT Case- Mix Index 0-5 TA 1.53 1.49 6-9 TB 1.69 1.63 10-23 TC 1.88 1.68 24 TD 1.92 1.53 0-5 TE 1.42 1.41 Other Orthopedic 6-9 TF 1.61 1.59 10-23 TG 1.67 1.64 18 Partial Table 21 CMS 1696-P 24 TH 1.16 1.15

PT and OT Case-mix Classification Groups Clinical Category Medical Management Section GG Function Score PT OT Case- Mix Group PT Case- Mix Index OT Case- Mix Index 0-5 TI 1.13 1.17 6-9 Tj 1.42 1.44 10-23 TK 1.52 1.54 24 TL 1.09 1.11 Non-Orthopedic Surgery and Acute Neurologic 19 Partial Table 21 CMS 1696-P 0-5 TM 1.27 1.30 6-9 TN 1.48 1.49 10-23 TO 1.55 1.55 24 TP 1.08 1.09

Speech Language Pathology Case-Mix Classification 20

SLP Component 5 Characteristics that will impact the SLP Component Acute Neurologic or Non-Neurologic SLP-Related Comorbidity Cognitive Impairment Mechanically Altered Diet Swallowing Disorder 21

SLP Component Acute Neurologic or Non-Neurologic Determined by I8000 SLP-Related Comorbidity Also determined by I8000 22

SLP-Related Comorbidities Aphasia CVA, TIA, or Stroke Hemiplegia or Hemiparesis Traumatic Brain Injury Tracheostomy Care (while a resident) Ventilator or Respirator (while a resident) Laryngeal Cancer Apraxia Dysphagia ALS Oral Cancers Speech and Language Deficits Table 22 CMS 1696-P 23

Cognitive Functional C Score (CFS) CMS Proposes blending BIMS and CPS to get a CFS score CFS Cognitive Scale BIMS Score CPS Score 1. Cognitively Intact 12-15 0 2. Mildly Impaired 8-12 1-2 3. Moderately Impaired 0-7 3-4 4. Severely Impaired - 5-6 Table 20 CMS-1696 - P 24

SLP Component Mechanically Altered Diet Determined by K0510C2 Swallowing Disorder Determined by K0100Z 25

Presence of Acute Neurologic Condition, SLP-Related Comorbidity, or Cognitive Impairment 12 SLP Case-Mix Groups Mechanically Altered Diet or Swallowing Disorder Case-Mix Group Case-Mix Index None Neither SA 0.68 None Either SB 1.82 None Both SC 2.66 Any one Neither SD 1.46 Any one Either SE 2.33 Any one Both SF 2.97 Any two Neither SG 2.04 Any two Either SH 2.85 Any two Both SI 3.51 Any three Neither SJ 2.98 Any three Either SK 3.69 Any three Both SL 4.19 26 Table 23 CMS-1696-P

Nursing Case-Mix Classification Proposed 27

25 Nursing Indexes CMS Proposes to use a modified version of the RUG-IV Nursing Categories CMS reduced the number of Nursing RUGs from 43 to 25. This was accomplished by collapsing case-mix groups that have contiguous ADL scores when those RUGs were defined by similar clinical traits We will look at Table 26 in a few slides. 28

25 Nursing Indexes CMS Proposes to use a modified version of the RUG-IV Nursing Categories Nursing will also use Section GG to capture the Nursing Function Score Using the same methodology as for the PT and OT component. 0-4 point scale Average bed mobility and transfers 29

Section GG items for Nursing Section GG Item Table 25 CMS 1696-P Score GG0130A1 Self-care: Eating 0-4 GG0130C1 Self-care: Toileting Hygiene 0-4 GG0170B1 Mobility: Sit to lying 0-4 (avg of GG0170C1 Mobility: Lying to sitting on side of 2 items) bed GG0170D1 GG0170E1 GG0170F1 Mobility: Sit to stand Mobility: chair/bed-to-chair transfer Mobility: Toilet transfer 0-4 (avg of 3 items) 30

PDPM Nursing Index 25 Indexes RIG-IV Nursing RUG 31 ES3 ES2 Extensive Services Trach and Vent Trach or Vent Clinical Condition Depres sion # of Restorative Nursing Services GG-based Function Score PDPM Nursing Case-Mix Group *e.g. septicemia, respiratory therapy and more see full chart Partial Table 26 CMS 1696-P Nursing Case- Mix Index --- --- --- 0-14 ES3 4.04 --- --- --- 0-14 ES2 3.06 ES1 Infection --- --- --- 0-14 ES1 2.91 HE2/HD2 ---- Serious medical condition* Yes --- 0-5 HDE2 2.39 HE1/HD1 --- same No --- 0-5 HDE1 1.99 HC2/HB2 --- Same Yes --- 6-14 HBC2 2.23 HC1/HB1 --- Same No --- 6-14 HBC1 1.85

HIV/AIDS add-on Due to significant increase in nursing cost to care for HIV/AIDS pts, the facility will get an 18% increase in the Nursing Component This would be applied based on the presence of ICD-10-CM code B20 on the SNF claim 32

Non-Therapy Ancillary Case-Mix Classification 33

50 Conditions & Extensive Services Used for NTA Classification Condition/Extensive Services Partial Table 27 CMS 1696 - P Source Points HIV/Aids SNF Claim 8 Parenteral IV feeding: High MDS Item O0100H2 7 Special Treatments/ Programs: IV Meds Postadmit Special Treatments/ Programs: Vent or Resp Post-admit MDS Item O0100I2 5 MDS ItemO010F2 4 Endocarditis MDS Item I8000 1 34

NTA Case-Mix Classification Groups NTA Score Range NTA Group NTA Case-Mix Index 12+ NA 3.25 9-11 NB 2.53 6-8 NC 1.85 3-5 ND 1.34 1-2 NE 0.96 0 NF 0.72 Partial Table 28 CMS 1696-P 35

36 Non Case-Mix Component

Non Case-Mix Component Flat rate Non case-mix adjusted 37

Variable Per Diem Adjustment Factor 38

Variable Per Diem Adjustment Factor Adjustment Factor PT and OT: After day 20, drop 2% every 7 days. Of interest, if the patient is in the facility on days 98-100, the adjustment factor for PT and OT is 0.76. 39

NTA Adjustment Factor Medicare Payment Days Adjustment Factor 1-3 3.0 4-100 1.0 Table 31 CMS 1696-P 40

Assessments (MDS) to be completed Only three types of assessments 5-Day Scheduled Assessment Interim Payment Assessment (IPA) SNF Part A Discharge Assessment 41

5-Day Scheduled Assessment Grace Days Remove the label grace days so that the 5-day PPS schedule will be days 1-8 vs days 1-5 with grace days of 6-8. 42

Interim Payment Assessment Requirements (1) There is a change in the resident s classification in at least one of the first tier classification criteria for any of the components under the proposed PDPM (which are those clinical or nursing payment criteria identified in the first column in Tables 21, 23, 26, and 27 PT/OT, SLP, Nursing, NTA) such that the resident would be classified into a classification group for that component that differs from that provided by the 5-day scheduled PPS assessment, and the change in classification group results in a change in payment either in one particular payment component or in the overall payment for the resident; and (2) The change(s) are such that the resident would not be expected to return to his or her original clinical status within a 14-day period. 43

Interim Payment Assessment Requirements - In addition, we propose that the Assessment Reference Date (ARD) for the IPA would be no later than 14 days after a change in a resident s first tier classification criteria is identified. The IPA is meant to capture substantial changes to a resident s clinical condition and not every day, frequent changes. We believe 14 days gives the facility an adequate amount of time to determine whether the changes identified are in fact routine or substantial. - Missed or late IPAs will be treated as missed or late unscheduled assessments 44

PPS Discharge Assessment Must be completed on all PPS discharges Adding a modified Section O to this assessment 45

Modified Section O MDS Item Number O0400A5 O0400A6 O0400A7 O0400A8 O0400A9 O0400A10 Item Name Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Therapy Start Date Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Therapy End Date Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Individual Minutes Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Concurrent Minutes Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Group Minutes Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Days 46 Partial Table 35 CMS-1696-P

Decrease in Provider Burden CMS Proposes The PDPM model will save providers $200M per year or $2B over 10 years 47

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PDPM Modes of Therapy Group and Concurrent Therapy Limits to 25% combined Most services provided on an individual basis 49

PDPM Modes of Therapy Group and Concurrent minutes counted in full vs ¼ and ½ respectively CMS will use the Discharge Assessment to monitor Group and Concurrent utilization. Should a provider exceed this limitation, a non-fatal warning edit will appear on the validation report after submission to the QIES ASAP system CMS may consider future proposals to address abuses of this policy or flag providers for additional review 50

PDPM Interrupted Stays Payment calendar continues (using adjustment factors) if the resident is discharged from a SNF and returns to the same SNF within 3 midnights. Eval implications? 51

PDPM Per Diem PT and OT Rate SLP Rate Nursing Rate NTA Rate Non-Case-Mix Rate Base Rate x PT and OT CMI x Adjustment Factor Base Rate x SLP CMI Nursing Rate x Nursing CMI Base Rate x NTA CMI x Adjustment Factor Non-Case Mix Rate $$$ + $$$ + $$$ + $$$ + $$$ + $$$ 52 Total Per Diem

Hip Replacement Example Mr. B had a hip replacement and was sent for rehab at our SNF. His case-mix groups are as follows: PT and OT case-mix group TA SLP case-mix group SA Nursing PDPM case-mix group CDE2 Non-therapy ancillary NE Non case-mix flat rate 53

Hip Replacement Example Case-mix group Case-mix Index TB TB SA CDE2 NE 1.69 1.63 0.68 1.86 0.96 Urban PT OT SLP Nursing NTA Non case-mix Per diem $ 59.33 $ 55.23 $ 22.15 $ 103.46 $ 78.05x3 $ 92.63 Subtotal $ 100.27 $ 90.02 $ 15.06 $ 192.44 $ 224.78 $ 92.63 - Urban - *Note: these rates are not wage index adjusted Days Per Diem 1-3 $715.20 4-20 $565.35 21-27 $561.54 54

Hip Replacement Example Case-mix group Case-mix Index TB TB SA CDE2 NE 1.69 1.63 0.68 1.86 0.96 Rural PT OT SLP Nursing NTA Non case-mix Per diem $ 67.63 $ 62.11 $ 27.90 $ 98.83 $ 74.56x3 $ 94.34 Subtotal $ 114.30 $ 101.24 $ 18.97 $ 183.82 $ 214.73 $ 94.34 - Rural - *Note: these rates are not wage index adjusted Days Per Diem 1-3 $727.40 4-20 $584.25 21-27 $579.94 55

Joint Replacement/Medically Complex Extremely ill patient with multiple comorbidities (joint replacement, dysphagia and mech altered diet, septicemia, depressed, 0-5 on GG, 12+ on NTA): PT and OT case-mix group TA SLP case-mix group SC Nursing PDPM case-mix group HDE2 Non-therapy ancillary NA Non case-mix flat rate 56

Joint Replacement/Medically Complex Case-mix group Case-mix Index TA TA SC HDE2 NA 1.53 1.49 2.66 2.39 3.25 Urban PT OT SLP Nursing NTA Non case-mix Per diem $59.33 $55.23 $22.15 $103.46 $78.05 x3 $92.63 Subtotal $90.77 $82.29 $58.91 $247.26 $760.98 $92.63 - Urban - *Note: these rates are not wage index adjusted - Show AANAC Handout Days Per Diem 1-3 $1332.87 4-20 $825.54 21-27 $822.08 57

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Now What? Industry Changes? The usual contract therapy contract will no longer work Part B will continue as is Part A portion of contract What do we go to next? Pay contract based on hourly rate of time on-site? Same as above with productivity minimum? Pay contractor a percentage of the PT/OT and ST rates? 59

Now What? Industry Changes? Therapy utilization? Assume that therapy utilization will decrease May mean that there is a decreased demand for therapists nationwide. Therapist salaries? Is this PPS lite for the therapy portion of the industry? Could in-house therapy be an option or a reality for your facility? 60

Some Concerns About the Model Rationing of therapy. PT and OT limited clinical categories why not use comorbidities like the SLP component? PT and OT cognition removed from this calculation concerns Modified Section O on discharge assessment seen as helpful to the therapy community. How will it be handled if one discipline misses a few days? (sick therapist, holiday, staffing issues) 61

Some Concerns About the Model Use of Section GG seen as a good thing, but usual performance to drive resource allocation? PDPM is based on statistical analysis and on projection that has not been tested. Need a demonstration project and possible phased-in roll out system. Unknowns about the IPA probably won t know specifics until the draft RAI comes out in January 2019 Auditors may try to apply rules that do not apply to this model well after the fact (paid for SLP, but didn t provide it to a specific patient, auditor may try to take those funds back) 62

Who we are and who we serve: SNF Rehab Agency Legal SNF In-house Contract conversion Contract therapy company audits 63

What will PDPM look like for SimpleLTC customers? Currently reviewing PDPM details and product options SimpleAnalyzer will include PDPM views/analytics Product vision Possible RUG analytics tool (pre-pdpm) to include Case Mix Index analysis Possible cross-integration of analytics from RUG to PDPM What are my RUG reimbursements now? How might my reimbursements be different under PDPM? How will my CMI affect this? Look for product announcements coming soon

Now that we have opened Pandora s box, what questions do you have about PDPM? 21 Page synopsis on our website http:///articles/2018/4/30/patientdriven-payment-model Mark McDavid, OTR/L RAC-CT Seagrove Rehab Partners mark@ 850.532.1334 www. 65