Medicare PPS Rates

Final Rule Ensures Cuts for Most Ohio SNFs

On August 11, 2009, the Centers for Medicare & Medicaid Services (CMS) published the SNF Prospective Payment System and Consolidated Billing final rule effective October 1, 2009. The published rule finalized most of the provisions of the proposed rule, which will result in an overall reduction in SNF payments. As in prior years, the federal rates will be updated by an annual market basket increase of 2.2%, which will provide an additional $690 million in funding for skilled nursing facilities.

However, despite widespread industry concern, CMS proceeded with the proposed recalibration of the nursing index of each RUG payment category. The recalibration was the result of a projection error that occurred when CMS added 9 new RUG categories on January 1, 2006. The addition of these categories was intended to be budget neutral, but has actually resulted in a significant increase in Medicare payments to SNFs. CMS had originally forecasted that approximately 19% of residents would be classified into the 9 new RUG categories. However, actual data has shown that residents are being grouped into these categories more than 30% of the time. The recalibration results in a 3.3% reduction, or $1.05 billion, in the federal rates, yielding a net reduction of approximately 1.1%, or approximately $360 million.

Unfortunately, the pain does not stop there for most skilled nursing facilities in Ohio. With a few exceptions, most Ohio counties will also see a decrease in the wage index that is applied directly to approximately 70% of the federal rates. The combination of these three factors will result in many facilities seeing Medicare rates for FY2010 lower than those of FY2008 for some RUG categories. Therefore, it is more important than ever to ensure that all services being provided are properly captured and included on the MDS assessment.

To illustrate the potential impact of the changes on each Ohio CBSA, we've included a chart comparing the average FY 2010 (10/1/09 to 9/30/10) rates to the average FY 2009 (10/1/08 to 9/30/09)rates using the 2008 Ohio statewide average RUG assessment breakdown. Please click here to see the comparison: Rate Chart Comparison

The FY2010 rule also includes a number of provisions related to FY2011, which begins October 1, 2010. Among these provisions are the introduction of MDS 3.0 and a new RUG-IV classification system. RUG-IV will increase the number of case-mix groups from 53 to 66. The new classification system splits the Special Care category into High and Low categories and combines Impaired Cognitions and Behavioral Problems into one category, Behavioral Symptoms and Cognitive Performance. RUG-IV also makes a number of adjustments to the scale for measuring Activities of Daily Living (ADLs).

In addition, the look-back period to a resident’s hospital stay will be eliminated so only services provided in a SNF can be included on the MDS assessment. CMS determined, as a result of the STRIVE time study, that resource utilization for residents that received a service in the hospital were similar to residents that never received the service.  Therefore, they felt that pre-admission services were not a good measure of the complexity of a resident’s medical needs.  As a result, any services provided in a hospital setting will no longer qualify a resident for the Extensive Services categories, which could significantly impact a facility’s reimbursement.

We will continue to keep you updated as additional information and resources become available regarding MDS 3.0, RUG-IV and other issues regarding Medicare reimbursement. We are prepared to help you protect and maximize appropriate Medicare reimbursement with the latest in educational seminars, staff training and tools designed by our skilled professionals.

The rates for all Ohio CBSA's effective 10/1/2009 are available in the links below:

Ohio CBSA PPS Rates FY10

Ohio CBSA PPS Rates FY10 AIDS

The links in the list below provide the detailed calculations of the PPS rates, including the breakdown by therapy, nursing, and non-case mix components, for each of the 17 CBSAs in Ohio.  Please select the CBSA from the list below in which your county resides to open a printable PDF file.  If you are not sure which CBSA to choose, please click the first link to open a crosswalk between the county names and the CBSA names.

Crosswalk Between Ohio Counties and CBSA Names

DETAILED CALCULATIONS BY OHIO CBSA NAME

 

These rates are subject to change based on any Correction Notices that are issued by CMS.  If a Correction Notice is issued that affects any Ohio counties, we will update these links with the new rates.

 

If you would like the rate calculations for a CBSA in any other state, please feel free to contact any of our HW Healthcare Advisors or submit your questions below.

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