Rick Mittman

On July 31, 2009, the Centers for Medicare & Medicaid Services (CMS) issued the final rule for the fiscal year (FY) 2010 prospective payment system (PPS) for skilled nursing facilities (SNFs), which also included significant changes for FY 2011.  The following is a summary of the main components of the final rule.

Provisions effective October 1, 2009

• The net impact of overall changes in rates is a 1.1% reduction in Medicare skilled nursing facility payments or $360 million compared to FY 2009, comprised of the following: 
  
  • Recalibration adjustment to correct overpayments CMS believes resulted from the implementation of the resources utilization group (RUG 53) system and nine new RUG categories (rehab + extensive), which became effective January 1, 2006.  The impact of this change is a reduction of total payments to nursing facilities of $1.05 billion, or 3.3%
  • Full market basket increase of 2.2%.  This adjustment represents a $690 million increase in aggregate SNF payments
• The 128% add-on for SNF patients with acquired immune deficiency syndrome (AIDS) remains in effect
• Core-based Statistical Area (CBSA) hospital wage index values will continue to be used in the calculation of the rates

Provisions effective October 1, 2010

• A new resource utilization-based SNF prospective classification system (RUG-IV), along with the updated Minimum Data Set (MDS) 3.0, will be used for payment purposes.  Although the impact of these changes is intended to be budget neutral, there will be a significant change in the distribution of payments across a new 66-RUG category system
• PPS hospitals operating swing bed programs will be required to complete a shorter version of the MDS 3.0 excluding clinical items not required for payment or quality measurement
• CMS will allocate resident therapy minutes between patients served during concurrent therapy sessions, as well as limit the number of patients participating in concurrent therapy sessions to two
• Revisions will be made to the RUG-IV ADL Index
• CMS will modify the look-back period for coding special treatments and procedures on the MDS to include only those services provided after admission (or readmission) to the SNF for payment purposes.  Treatments and procedures provided in the acute care setting will no longer qualify a patient for extensive services RUG categories.  Some of the current qualifiers for the extensive services category will change
• The timeframe for completing an Other Medicare Required Assessment (OMRA) will be reduced to one to three days after treatment ceases
• CMS is proposing changes to transmission of MDS data, including reducing the timeframe for transmission from 31 days to 14 days
• CMS is proposing to modify the use of Resident Assessment Protocols (RAPs)

For questions or more information, please contact your BKD advisor.  Calculations of the October 1, 2009, SNF PPS rates are available upon request.  BKD will provide additional guidance and training resources related to the FY 2011 changes as we get closer to the implementation date.