CMS Announces October 2010 Implementation of RUG IV

The Centers for Medicare and Medicaid Services (CMS) formally announced that on October 1, 2010, the agency will temporarily implement the entire RUG IV system. This action stems from the agency’s inability to implement a modified RUG III system – with the application of the MDS 3.0 system as well as changes to concurrent therapies and look back periods – on October 1, as mandated by the health care reform law.

 
In part the CMS communication states “as we continue to build the payment infrastructure needed to incorporate the combination of features mandated by [Patient Protection and Affordable Care Act] ACA, we will apply interim payment rates, effective October 1, 2010, that reflect not only the use of MDS 3.0, but also the new RUG-IV system in its entirety as finalized in the FY 2010 SNF PPS final rule (74 FR 40288, August 11, 2009).  Once the necessary infrastructure is in place, we will then retroactively adjust the rates to reflect a hybrid RUG-III (HR-III) system which incorporates RUG-IV’s specific revisions on concurrent therapy and the look-back period within the framework of the existing 53-group RUG-III system, along with the use of MDS 3.0.”

 
While this notification provides some clarification and enables member providers the ability to prepare for the payment system that will be in place on October 1, AHCA continues to work steadfastly on Capitol Hill to secure passage of a legislative fix. Later this week, the House and Senate are set to consider an “extenders package” that contains two important provisions: 1) a legislative fix to delete the RUG IV delay, thereby eliminating implementation of a modified RUG III system, and 2) a 6-month extension of the enhanced FMAP funds. 
 
We will provide ongoing updates as this issue progresses. 
The entire CMS communication transmitted via the SNF provider listserv follows:

 
ATTN:  Freestanding and Hospital-based SNFs and Rural Hospital Swing Beds
Payments Under the Skilled Nursing Facility Prospective Payment System (SNF PPS)
For Fiscal Year (FY) 2011 - Update

May 24, 2010 

Section 10325 of the Patient Protection and Affordable Care Act (ACA) includes a provision addressing Medicare payments for SNFs in FY 2011.   This section mandates a delay in the introduction of the Resource Utilization Groups, version 4 (RUG-IV) case mix classification system until FY 2012.  In addition, it requires that version 3.0 of the Minimum Data Set (MDS 3.0) Resident Assessment Instrument will be implemented as planned in FY 2011.  Finally, the section requires that certain specific components of RUG-IV, specifically, the concurrent therapy and look-back revisions, be applied in FY 2011.   While there is currently an existing grouper (the software program that uses assessment data to assign each SNF resident to the appropriate RUG) that utilizes the 53-group RUG-III system and the MDS 2.0, and a revised grouper that utilizes RUG-IV and the MDS 3.0, a grouper that incorporates the particular combination of features mandated by the statute does not currently exist.

Accordingly, as we continue to build the payment infrastructure needed to incorporate the combination of features mandated by ACA, we will apply interim payment rates, effective October 1, 2010, that reflect not only the use of MDS 3.0, but also the new RUG-IV system in its entirety as finalized in the FY 2010 SNF PPS final rule (74 FR 40288, August 11, 2009).  Once the necessary infrastructure is in place, we will then retroactively adjust the rates to reflect a hybrid RUG-III (HR-III) system which incorporates RUG-IV’s specific revisions on concurrent therapy and the look-back period within the framework of the existing 53-group RUG-III system, along with the use of MDS 3.0. 

This approach will allow CMS to make payments with the least disruption for providers and beneficiaries.   As we do every year, we will publish the specific payment rates for the upcoming fiscal year in the Federal Register, and provide additional guidance concerning implementation of the FY 2011 payments in the near future.  Finally, we note that there is legislation pending in Congress that would repeal section 10325 of the ACA, and thus eliminate the need to retroactively adjust payments.

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  Red Flag Rule to be Implemented June 1, 2010

After nearly two years of delays, the Red Flag Regulations affecting the Long Term Care Profession will go into affect on June 1, 2010.

The Red Flag Regulations have three parts, only the first two of which pertain to the health care industry. The first part, the address discrepancy portion of the Red Flag Regulations, applies to anyone who uses “consumer reports,” defined to include credit reports, and requires users of consumer reports to develop and implement reasonable policies and procedures to deal with an address mismatch.  The second part pertains to the detection, prevention and mitigation of identity theft in relation to covered accounts by “creditors or financial institutions.”  This second rule, referred to commonly as the “Red Flags Rule”  is an anti-fraud regulation, requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to the warning signs, or “red flags,” that could indicate identity theft. 

These rules became effective November 1, 2008, but enforcement of the second rule,  known as the Red Flag Rule,  delayed until May 1, 2009, again delayed to August 1, 2009, then to  November 1, 2009 and finally to June 1, 2010.   

AHCA has developed some valuable guidance materials to help you prepare. Click here for ID theft prevention programs and here for Red Flag policies and proceedures. Additional information can be found on the AHCA website. Click here for that link. You will need to log in as a member. Please contact khca@khca.org if you need log in information. 

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  Kansas Healthcare Association Welcomes Disney Institute to Wichita on July 27, 2010

Disney’s Approach to Quality Service for Healthcare Professionals – coming to Wichita on July 27th, 2010.  
 
Every hospital, clinic, group medical practice, dental practice, or freestanding medical care provider has the opportunity to distinguish themselves through the delivery of quality services.

A one-day local workshop, Disney’s Approach to Quality Service for Healthcare Professionals program will show you the importance of attention to detail in everything Disney does -- from training its Cast Members (employees) to treating every Guest (patient) as a VIP.  You will hear the stories and see how Disney best practices can be easily adapted to your healthcare delivery organization.

Professional development doesn't cost—it pays.  It pays by creating a framework of focused energy in a vacuum of uncertainty.  It pays by helping an organization gain share in a slow economy.  The long-standing reputation Disney Destinations has for incredible service and friendly employees is not magic, it is sound ideology consistently applied in business. This program is designed to help Healthcare Professionals improve their organization’s quality service by immersing themselves in the successful Disney model.

IMPORTANT: Please use the Kansas Healthcare Association promotional code KHCAMNE to receive $50 OFF PER GUEST when registering. Additional group discounts are available.

TO LEARN MORE AND REGISTER GO TO: www.keysWichita.com.

No prerequisite training required. 

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  Nursing Home Five-Star Quality Rating System

The Five-Star provider preview reports will be available no later than Tuesday, May 18, 2010.  Providers can access the report from the Minimum Data Set (MDS) State Welcome pages available at the State servers for submission of Minimum Data Set data.

Provider Preview access information:
Visit the MDS State Welcome page available on the State servers where you submit MDS data to review your results.
To access these reports, select the Certification and Survey Provider Enhanced Reports (CASPER) Reporting link located at the bottom of the login page.
Once in the CASPER Reporting system,
Click on the 'Folders' button and access the Five-Star Report in your 'st LTC facid' folder,
Where st is the 2-digit postal code of the state in which your facility is located, and
Facid is the state assigned facid of your facility.

BetterCare@cms.hhs.gov is available to address your Five Star Quality Rating system questions.

Nursing Home Compare will update with May’s Five-Star data on Thursday, May 27, 2010.
Please visit http://www.cms.hhs.gov/CertificationandComplianc/13_FSQRS.asp for the latest Five-Star Quality Rating system information.

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  AHCA Outlines Ownership Disclosure Rules

The Patient Protection and Affordable Care Act (PPACA or Health Care Reform) is bringing changes to the Ownership Disclosure Process.

Click here for a policy memo on Section 6101 of the Patient Protection and Affordable Care Act (PPACA), here for a Guidance document on the section and here for a Sample Provider Ownership and Disclosure Form.  This section is in effect immediately.   All three documents will be posted to the AHCA Website under Health Care Reform – Policy Memos. Click here for a link to AHCA's website. For help signing in, please contact us at khca@khca.org

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