Regulatory Review – A View into 2014

By RehabCare

The nation’s post-acute care system continues to be highly scrutinized within the context of access, quality outcomes, efficiency and reimbursements. In order to provide context to factors related to the provision of care and rehabilitation across the entire continuum, RehabCare has compiled the following regulatory review to help provide clarity for 2014.

Rehab Therapies in Skilled Nursing Facilities

  • CMS SNF Rule for FY 2014: On October 1, 2013, the CMS Medicare final rule for Skilled Nursing Facilities went into effect for the fiscal year. The final rule includes a 1.3 percent Market Basket Increase for SNF Medicare payments as well as several regulatory changes including the reporting of discreet therapy days on the MDS and the requirement to report therapy co-treatment minutes on the MDS. At RehabCare, we have been tracking distinct calendar days for therapy as part of our protocol for a long time and ensuring the needs of our patients are met remains our primary objective. Continued compliance will require close attention to detail in order to ensure that patients remain in the appropriate RUG that accurately best represents their medical and rehabilitative needs rather than changing based solely on an arbitrary day count and a rolling 7-day calendar. Additionally, the SNF rule will require the reporting of co-treatment minutes as a separate item on the MDS.
  • MedPAC Proposals: Adding to the pressure, the Medicare Payment Advisory Commission (MedPAC) staff has once again – as they have since 2008 - recommended that the PPS be revised to discourage the provision of “unnecessary rehabilitative therapy services.” In fact, the Commission continues to recommend revising the PPS to “raise payments for medically complex care (and the SNFs that provide it) and lower payments for high-intensity therapy (and the SNFs that provide it).” These staff recommendations will be officially voted on by the Commissioners in January and submitted to Congress in March as their official recommendations on changes to Medicare policy – though it is important to recall that MedPAC has no weight of law, just the ability to submit recommendations to lawmakers.

Medicare Changes for Inpatient Rehabilitation Facilities

On October 1, 2013, the CMS final rule for the IRF prospective payment system went into effect for all exempt-bed acute rehabilitation facility discharges occurring on or after October 1, 2013. Key provisions include:

  • Medicare Reimbursement Changes: The final rule contained multiple routine revisions to the current payment system including: revised base rate, updated wage indexes, updated CMG weights, updated CMG lengths of stay, and an updated outlier threshold. Generally, we estimate the overall impact of the rule to be favorable in comparison to the current base rate which went into effect October 1, 2012; however, the impact to specific individual units varies.
  • Tweaks to the “60 Percent Criteria:” The CMS rule imposes changes to the way inpatient rehabilitation facilities comply with the 60% Rule – specifically changing the way that a hospital meets “presumptive compliance.” After these changes go into effect on October 1, 2014, it is anticipated that some IRFs may no longer meet the presumptive compliance threshold and therefore will be automatically subject to the medical review methodology which will increase the administrative burden to providers and MACs.
  • Quality Reporting: Beginning in October 1014, new elements on the IRF-PAI will allow for risk adjustment of the current pressure ulcer measure and allow for a new measure to track the percent of IRF patients given the seasonal flu vaccine. Two new, non IRF-PAI related quality measures will be added including rehospitalization within 30 days of discharge and percentage of staff receiving the flu vaccine.


The 2014 U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) work plan is scheduled to be published in January of 2014. The OIG is tasked to “protect the integrity of HHS programs and operations and the well being of beneficiaries by detecting and preventing fraud, waste, and abuse; identifying opportunities to improve program economy, efficiency, and effectiveness; and holding accountable those who do not meet program requirements or who violate Federal laws.”

The current work plan continues to focus on timely submissions of the Inpatient Rehabilitation Facility Patient Assessment Instruments (IRF-PAIs) and the examination of the level of therapy being provided in IRFs and the appropriate utilization of concurrent and group therapy in the IRF setting. Additionally, the current work plan will focus on identifying and pursuing questionable billing patterns for Part B covered services – including rehabilitative therapies – during a nursing home stay.

We expect that the 2014 plan will continue to pursue its 2013 work plan and build upon it with its revised 2014 plan. RehabCare will continue to monitor for the revised work plan and provide timely updates.

Additionally, in 2014, we expect to see the increased scrutiny and overall activity seeking improper Medicare payments to post-acute care providers – including activity by RACs, MACs and ZPICs.

Legislative Activity

With 2014 already set to continue a trend of increased regulatory activity regarding the provision of rehabilitative care in a whole host of settings, it is also speculated that as Congress addresses a permanent “Doc Fix” and the potential for comprehensive post-acute care payment and delivery reform, they will touch on issues of critical importance to our service line. RehabCare will continue to closely monitor and report any and all legislative activity as it relates to the provision of medically necessary therapy care.

By RehabCare