CMS Final Payment Rules Reflect Kindred Comments

By Kindred Healthcare

In early August, the Centers for Medicare and Medicaid Services (CMS) issued several final rules regarding Medicare policies and payment rates for several post-acute care providers – including Long-term Acute Care Hospitals (LTACs), Inpatient Rehabilitation Facilities (IRFs), and Skilled Nursing Facilities (SNFs) – which go into effect at the start of fiscal year 2015 (FY 15) on October 1, 2014.

During the public comment period prior to the issuance of these final rules, Kindred took the opportunity to react to proposals within each rule and advocate the value of quality post-acute care services within our nation’s healthcare continuum.


Medicare update factor for FY 2015: 1.1% (an increase from the 0.8% update factor in the proposed rule)

Within our public comments we stated: “In light of significant changes to the LTCH payment system – patient criteria and site- neutral payments – that are scheduled to begin a two-year phase in on October 1, 2015, Kindred opposes the proposal to change the current LTCH interrupted stay policy. We believe that CMS has not conducted the necessary data analysis of LTCH claims to support the change to 30 days for all settings, and that the 30-day threshold was arbitrarily borrowed from the short-term acute care hospital readmission policy.”

In issuing the final rule, CMS responded to public comment and chose not to finalize the proposed changes to the interrupted stay policy, so for FY 2015 the current policy remains in effect.


Medicare update factor for FY 2015: 2.4% (an increase from the 2.2% update factor in the proposed rule)

Within our comments, we specifically addressed proposed changes to presumptive compliance with the so-called 60% Rule. In response to public comment from Kindred’s RehabCare Division and other stakeholders, CMS opted to delay the effective date for the revisions to the presumptive compliance codes until review periods beginning October 2015. This reflects a full year delay in implementation.

Additionally, we stated: “RehabCare supports changes to the proposed therapy data collections requirements to limit the administrative burden and more accurately define the different therapy modalities.” CMS responded to such comments, and limited the data collection requirements to the collecting of total number of minutes of therapy by mode and discipline for the first two weeks of therapy – rather than the extended reporting period in the proposed rule.


Medicare Update Factor for FY 2015: 2.0% (consistent with proposed rule)

The CMS proposed rule did not specifically make changes regarding the utilization of therapy services in SNFs, but took the opportunity to seek provider input to a recent Acumen study and discussion on the potential for future change.

In our comments to CMS, Kindred stated: “As CMS continues to evaluate the appropriate level and intensity of therapy services provided in SNFs as documented in the Acumen study, “Observations on Therapy Utilization Trends,” we urge CMS not to make broad reforms based solely on recent trend data, but to consider the cost-saving value of providing the appropriate rehabilitative services at the right time for each patient.”

We will continue to work with CMS to advocate for an approach to reforming payments for therapy provided in SNFs that preserves access to medically necessary services for Medicare patients, better aligns clinical need with services delivered, develops adequate controls and safeguards to ensure appropriate therapy utilization, and provides short-term stability for providers.

Upcoming Updates – Physician Fee Schedule and Home Health
CMS has issued proposed rules that would go into effect on January 1, 2015 for the Medicare physician fee schedule and for home health agencies. Kindred will take the opportunity to respond to these rules and provide timely updates as to CMS’ response.