Kindred Regulatory Update

By Kindred Healthcare

In recent weeks, the Centers for Medicare and Medicaid Services issued several final regulations that included Medicare payment updates for fiscal year 2014, which begins on October 1, 2013. Three of the final rules addressed updates to the long-term acute care hospital, inpatient rehabilitation facility and skilled nursing facility prospective payment systems (PPS).

Long-Term Acute Care Hospital FY 2014 Update

In the final LTAC hospital payment update, CMS announced that for fiscal year 2014 Medicare payments will increase by 1.3 percent, which includes a 2.5 percent market basket update offset by outlier payments, the  second installment of the budget neutrality adjustment, and productivity adjustments.

The rule also included several regulatory changes including the full implementation of the 25% Rule beginning on October 1, 2013 and new measures that will be added to the LTAC hospital Quality Reporting program in FY 2017 and FY 2018.

With respect to changes to patient criteria, it is important to note that CMS did not formally propose patient/facility criteria – and there will be no material changes for FY 2014. Within the rule, CMS stated that they plan to propose new patient criteria within the FY 2015 rulemaking process. In this context, the agency is continuing to study the creation of new chronically critically ill/medically complex (CCI/MC) subcategory of patients to define the LTAC hospital level of care.

At Kindred, we will continue to advocate on behalf of our profession for what we believe is more appropriate patient/facility criteria such as was included in the AHA endorsed proposed legislation, the Long-Term Care Hospital Improvement Act.


CMS Issues FY 2014 Medicare IRF Final Rule

On July 31, 2013, the Centers for Medicare and Medicaid Services (CMS) issued the final 2014 Medicare payment and regulatory update for Inpatient Rehabilitation Facilities, which includes a 2.3 percent increase in Medicare payments effective on October 1, 2013. The final rule also included several updates including changes to the list of diagnosis codes that are used to determine presumptive compliance with the “60 Percent Rule,” changes to the IRF Patient Assessment Instrument (IRF-PAI), and revised quality measures and reporting requirements.

Kindred Regulatory Update and other stakeholders provided. While we had specifically advocated CMS withdraw the proposed changes to the presumptive compliance criteria methodology, we also commented that if CMS decided to move forward with the changes, it should allow providers adequate time for implementation, establish modifiers for arthritis conditions, appropriately target record review, and preserve certain codes. In an improvement over the proposed rule, and consistent with RehabCare’s comments, CMS has removed fewer codes than originally proposed from those that may count toward presumptive compliance of the 60% Rule threshold. Additionally, this portion of the update will not take effect until October 1, 2014, which gives providers more time to prepare. 

The proposed changes to the IRF-PAI and the IRF quality reporting program were also finalized in the rule and will take effect on October 1, 2014.  RehabCare will be providing ongoing and comprehensive training to our programs in the upcoming months to ensure they are prepared to implement the changes detailed in the final rule.      


SNF Final Rule Includes Changes to Distinct Therapy Days

The same day CMS issued the final IRF rule, it issued the SNF Medicare PPS update for FY 2014. In large part the final rule was in line with our expectations and close to the proposed rule issued earlier this year. The final rule includes a 1.3 percent Market Basket Increase for SNF Medicare payments beginning October 1 as well as several regulatory changes including the reporting of distinct therapy days on the MDS and the requirement to report therapy co-treatment minutes on the MDS.

Regrettably, CMS ignored much of the stakeholder comments and will require new reporting through item O0420 to the MDS 3.0 to capture distinct therapy days provided by all the rehabilitation disciplines to a beneficiary over the seven-day look-back period. CMS asserts that there was no change in policy, but is rather merely adding an item to the MDS to enable the agency to implement and track existing policy.

Our therapists 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.  We are working with our technology and software partners to ensure that we have the best tools and programs in place prior to October 1, 2013, to enable our therapists and customers to easily and appropriately implement the new requirements.


SNF Final Rule Includes Requirement to Report Co-treatment Minutes Provided by Therapy

Co-treatment minutes are currently captured and reported on the MDS but not as a separate item. Co-treatment is a technique where two therapists from two different disciplines treat the patient at the same time.

RehabCare currently records this treatment as part of documentation in the medical record. Reporting of this as a new item on the MDS is expected to be managed through our software vendors. CMS is expected to release specifications in the MDS 3.0 RAI manual.