AMRPA Magazine September 2017 by AMRPA

September 2017 â&#x20AC;¢ Vol. 20, No. 9

COLLABORATION VS. COMPETITION IN HEALTHCARE

Volume 20, Number 9

Contributors Bruce Gans, MD Chair, AMRPA Board of Directors, Executive Vice President and Chief Medical Officer, Kessler Institute for Rehabilitation, and National Medical Director for Rehabilitation, Select Medical Martha Kendrick, JD Partner, Akin Gump Strauss Hauer & Feld LLP Peter Thomas, JD Counsel to the AMRPA Consumer and Clinical Affairs Committee, Principal, Powers Pyles Sutter & Verville, PC Lisa Werner, MBA, MS, SLP Director of Consulting Services for FlemingAdvanced Outcomes Design Carolyn Zollar, MA, JD Executive Vice President for Government Relations and Policy Development, AMRPA

Letter from the Chair........................................................................................... 3 AMRPA Legislative Update................................................................................. 4 Medicare Trust Fund Will Remain Solvent Through 2029, Trustees Says....... 8 CMS Proposes Major Changes to the Medicare Home Health Payment System......................................................................... 10 FAIR Fund Launches Membership Drive to Commemorate 10 Years of Legal Advocacy on IRF Medicare Audits and Appeals............... 14 CMS Transmittals of Interest for Medical Rehabilitation Providers .............. 18 When Does a Physician Become a Rehabilitation Physician?........................ 20 CMS Issues FY 2018 SNF PPS Final Rule......................................................... 23

Jonathan M. Gold, JD Regulatory and Government Relations Counsel*, AMRPA

NIH Funded Study Supports Link Between Cognition and Vascular Health ........................................................................ 25

Mimi Zhang Policy and Research Associate, AMRPA

MedPAC Issues 2017 Data Book on Medicare Utilization and Spending Trends ....................................................................................... 26

Lovelyn Robinson Editorial and Research Assistant, AMRPA

Robotic Ankle Rehabilitation Improves Post-Stroke Recovery ..................... 29

*Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

Hospitals Are Not Supporting Patients with Quality Information on Skilled Nursing Facilities at Discharge, Report Says ............................... 30

AMRPA Magazine, Volume 20, Number 9.

Inpatient Rehabilitation Has Significant Improvements for MFS Patients, Study Finds .............................................................................. 32

AMRPA Magazine is published monthly by the American Medical Rehabilitation Providers Association (AMRPA). AMRPA is the national voluntary trade association representing inpatient rehabilitation hospitals and units, hospital outpatient departments and settings independent of the hospital, such as comprehensive outpatient rehabilitation facilities, rehabilitation agencies and skilled nursing facilities. SUBSCRIPTION RATES: Member institutions receive the AMRPA magazine as part of their membership dues. Individuals who are employees of member institutions may subscribe to the magazine for $100 annually. Nonmember individual subscriptions are $500 per year. Send subscription requests to AMRPA, 529 14th Street, NW, Washington, DC 20045 USA. Make checks payable to AMRPA. ADVERTISING RATES: Full page = $1500; Half page = $1000; Third page = $750. Ads may be B&W or full color. Contact Ryan Foster, rfoster@kellencompany.com for additional specs and acceptable submission format. Advertising Contact: Rachel Koresky, AMRPA, 529 14th Street, NW, Washington, DC 20045 USA, Phone: +1-202591-2469, Email: rkoresky@amrpa.org

CMS FY 2018 IRF PPS Rule Contains a Few Pleasant Twists ........................ 33 Proposed Rule for Physician Fee Schedule Includes Updates to Therapy Codes, Request for Information .................................. 37 Inpatient Prospective Payment System and Long-Term Care Hospital Payment Policies Finalized for FY 2018 ................................. 39 AMRPA Issues Statement to Committee Record of the Oversight Subcommittee Hearing on Efforts to Combat Waste, Fraud and Abuse in the Medicare Program ................................................... 41

Statements of fact and opinion are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of AMRPA. All content ÂŠ2017 by American Medical Rehabilitation Providers Association. All rights reserved. Materials may not reproduced in any form without written permission. Design and layout services provided by Kellen Company. POSTMASTER: Send address changes to Kellen Company, Attn: AMRPA Magazine Circulation 529 14th Street, NW, Suite 750, Washington, DC 20045

AMRPA Magazine September 2017

LETTER FROM THE CHAIR

Letter from the Chair Bruce M. Gans, MD, Executive Vice President and Chief Medical Officer, Kessler Institute for Rehabilitation and National Medical Director for Rehabilitation, Select Medical bgans@kessler-rehab.com

Collaboration vs. Competition in Health Care

ost of us work in health care enterprises designed to care for seriously injured or ill individuals. We struggle on a day-to-day basis to make clinical or business decisions, take actions, and do the “stuff” of work in health care to make good things happen for people with terrible problems. Part of our roles includes protecting the organizations we lead or work for in today’s competitive world. Who are your competitors — other rehab facilities, providers, referral sources, payers, alternative medicine practitioners, competing networks, systems, or just belief systems? How do you respond to these competitors; compete back, engage in a “medical arms race,” advertise, promote your organization on social media, and/or try to find a competitive edge to succeed at the expense of those competing? What if we change the paradigm by saying, “We can’t afford — and patients don’t need — competitors in health care. We need collaborators to work together in the best interests of the patient and our society.” Can we win by cooperating rather than competing? AMRPA believes it is at least worth a try. The AMRPA-proposed Continuing Care Hospital (CCH) model in the Affordable Care Act has never been tested. This would have transformed institutional post-acute providers into collaborators,

working together in a single care delivery enterprise to promote optimal post-acute care for patients in need. Now, AMRPA is engaged with Healthsperien in creating a comparable care delivery and payment model for managed care plans (Medicare in particular) that is being called the Continuing Care Network (CCNet). The idea is to have AMRPA facilitate a robust care delivery collaborative of providers across the post-acute continuum to work with insurance plans in a partnership to develop and operate idealized post-acute care clinical models that work well for patients and also optimize the costs of providing just the right care at the right time in the right setting. As you might imagine, this is a pretty complicated endeavor (who knew how complicated health care could be?) and it is consuming a great deal of time and attention from AMRPA leadership, Board members, volunteer membership, staff, and our other advisors. While great progress is being made with the concept, it is taking a lot of effort to get it “right” and to find the best markets, insurers, and AMRPA members to be early adopters of the CCNet model. Over the coming months, you will see and read more about this activity, which we hope can be a real “game changer” for all of post-acute care. In the near term, I urge that you look in your own settings for opportunities to re-invent health care as a collaboration rather than a competition among providers, facilities, patients, and payers.

AMRPA LEGISLATIVE UPDATE

By Martha M. Kendrick, Esquire, Partner, Akin Gump Strauss Hauer & Feld LLP

Senate Health Reform Bill n the early morning of July 28, the Senate voted on the “skinny” version of an Affordable Care Act (ACA) repeal and replacement bill as an amendment to the underlying House bill, the American Health Care Act. The Senate had rejected several other amendments over previous days on other versions of a modified bill, including the Better Care Reconciliation Act (BCRA)

• • • •

September. Senators Cassidy (R-LA) and Graham (R-SC) are floating a proposal to provide block grants to state governments to either continue ACA-related programs in their states or craft an entirely separate health care system. The House bipartisan Problem Solvers Caucus also has a plan to soothe insurance markets, and House Conservatives have also confirmed they are working on proposals that stabilize

Senate fails to pass a “repeal and replace” health care bill before the August recess, and Congress has renewed focus on market stabilization policies. Post-August recess agenda includes focus on passing a FY 2018 Budget Resolution with tax reform reconciliation instructions, as well as FY 2018 Omnibus, Medicare extenders package, and debt ceiling legislation. Final IRF PPS regulation finalizes 1 percent payment bump for rehab hospitals and facilities. CMS announced decision to cancel the proposed Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model and the Comprehensive Care for Joint Replacement (CJR) model expansion, as well as reduce the number of mandatory participants and allow voluntary participation going forward.

and the Obamacare Repeal Reconciliation Act. The “skinny” version was seen as the last opportunity to pass a bill. The Health Care Freedom Act includes a repeal of the individual and employer mandate, provides states flexibility in pursing 1332 Waivers, increases contributions for Health Savings Accounts (HSAs), a repeal of the medical device tax, and funds for the community health centers. The Senate failed, by a vote of 49 to 51, to pass the “skinny” version with Republican Senators McCain (R-AZ), Collins (R-ME) and Murkowski (R-AK) joining all Democrats in voting against it. Sen. McCain, who was recently diagnosed with brain cancer, urged the Senate to return to regular order with Committee discussion and 4

consideration of legislation. Senate Majority Leader McConnell (R-KY) took to the floor after the vote and returned the underlying bill (H.R. 1628) to the Senate legislative calendar, postponing further consideration of the Reconciliation legislation indefinitely. Despite ongoing pressure from the Trump Administration in the days following the failed vote, Senate Republican leaders indicated that, until legislators can craft a

package that garners 50 Republican votes, the Senate will move on to other business.

the exchanges and fund the cost-sharing reduction (CSR) payments.

Whether this is truly the end of efforts to repeal and replace the ACA are yet to be seen but it is difficult to see where Senate Republicans go following this vote. Both sides called for bipartisanship after the failed vote to work on legislation to stabilize the health care exchanges and make bipartisan changes to the ACA. Senate Health, Education, Labor and Pensions Chairman Alexander (R-TN), with support of Ranking Member Murray (D-WA), announced his intention to hold hearings to field proposals for short-term market stabilization plans, with plans to release a package in late

On August 16, the Administration indicated it will make CSR payments to insurers for yet another month. Following the Senate’s failure to pass an ACA repeal bill, President Trump threatened to end the payments. Chairman Alexander and other lawmaker called on President Trump to fund the CSRs through September. This mid-August announcement comes on the heels of an August 15 Congressional Budget Office (CBO) report on the estimated effects of ending the ACA’s CSR payments. CBO expects the following overall effects if the payments are terminated: The portion AMRPA Magazine September 2017

of people living in areas with no insurers offering non-group plans would be greater during the next two years and about the same starting in 2020; gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020— boosting the amount of premium tax credits according to the statutory formula; most people would pay net premiums (after accounting for premium tax credits) for non-group insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years; Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026; and the number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.

boost for a total of $35.2 billion, $8.6 billion above the President’s Budget request. Before departing for the August recess, the House Leadership advanced a “minibus” appropriations package including the Defense, Energy-Water, Legislative Branch and Military Construction-VA spending bills, despite policy concerns raised by the conservative Freedom Caucus and Democrats. Shortly after their recess departure, House Republicans announced their intent to bring a 12-bill appropriations package to the floor in early September, made up of the four-measure “minibus” passed last month plus the eight remaining fiscal 2018 spending bills. The legislation is likely unpassable by the Senate, where Democratic support would be required to advance an appropriations bill due to Democrat’s ability to filibuster the legislation.

Medicaid Services (CMS) released the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Final Rule for FY 2018. CMS finalized the 1.0 percent market basket update, as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Overall, IRFs can expect a $75 million payment increase for the upcoming fiscal year. The Final Rule includes elimination of a 25 percent payment penalty for late transmissions of the IRF patient assessment instrument (IRF-PAI). CMS also finalized updates with how ICD-10 codes are used toward an IRF’s presumptive compliance with the “60 percent rule.” CMS finalized several other proposed changes, including those coding issues related to traumatic brain injury (TBI) and hip fracture condition, as well as updated the quality reporting program. However, the final rule did not adopt new standardized patient assessment data elements under the IMPACT Act domains of Cognitive Function and Mental Status; Special Services, Treatments, and Interventions; and Impairments.

FY 2018 Budget and Appropriations Bills Gain Traction in the House On July 20, the House Budget Committee approved a Fiscal Year (FY) 2018 Budget Whether this is truly the end of Resolution, titled “Building a efforts to repeal and replace the ACA The agency also finalized the Better America” that reduces Skilled Nursing Facilities (SNFs) the deficit by $6.5 trillion are yet to be seen but it is difficult Final Rule. SNFs will see a over 10 years, and includes to see where Senate Republicans go $370 million overall increase Reconciliation instructions in Medicare payments, and six for tax reform. Centrist following [the July 28] vote. new quality measures that will to House Republicans, including be reported on Nursing Home Members of the Tuesday Compare by fall 2018. CMS also Group, are railing against began finalizing elements of the SNF ValueWays and Means Health Subcommittee the draft Budget, saying the spending Based Purchasing (VBP) program that will Announces New Medicare Initiative cuts are “not practical” and may endanger commence in 2019. On July 24, House Ways and Means Health tax reform efforts. The Budget assumes Subcommittee Chairman Pat Tiberi (Renactment of the House-passed American CJR Bundled Payment Demonstration OH) announced the “Medicare Red Tape Health Care Act and therefore, reforms Cut Back and Expansion Canceled Relief Project,” a new initiative to deliver Medicaid financing into a per capita cap On August 15, CMS released a proposed relief from unnecessary and burdensome model. Further, the Budget calls for a regulation to cancel the Episode mandates that impede innovation, drive new Medicare option that allows seniors Payment Models (EPMs) and the Cardiac up costs, and ultimately stand in the way to choose between traditional Medicare Rehabilitation (CR) incentive payment of delivering better care for Medicare coverage or private plans. model, which were scheduled to begin on beneficiaries. The Committee encourages January 1, 2018. The proposed rule would doctors, hospitals, nurses, and other health Meanwhile, House Appropriators are also reduce the number of mandatory care providers — those who provide care moving forward on a number of individual geographic areas participating in the to Medicare patients — to submit their spending bills, largely ignoring the levels Comprehensive Care for Joint Replacement feedback to the Committee. The Committee proposed in the President’s Budget (CJR) model from 67 to 34. CJR participants will use stakeholder comments to identify request. Several of the FY 2018 bills have in the 33 remaining areas would now be opportunities to reduce legislative and been marked up by the Appropriations allowed to participate on a voluntary regulatory burdens on Medicare providers, Committee, including the FY 2018 Laborbasis. Additionally, CMS proposes to make improving the efficiency and quality of the HHS spending measure, which proposed participation in the model voluntary for Medicare program. $77.6 billion for HHS, a decrease of $542 all low-volume and rural hospitals. CJR, million below last year’s enacted level and which was proposed under the Obama FY 2018 IRF and SNF PPS Final Rule $14.5 billion above the President’s budget Administration, was the first mandatory Released request. The bill also provides the National bundled payment demonstration. As a On July 31, the Centers for Medicare and Institutes of Health with a $1.1 billion funding 5

former member of Congress, Health and Human Services (HHS) Secretary Tom Price is on the record as strongly opposing the mandatory components of both of these models. The Proposed Rule noted that CMS may still test these models in the future, and consider altering the design. CMS also confirmed that it mistakenly did not reimburse providers part of the demonstration for care provided via telemedicine and proposed using “facility practice expense RVUs” to account for telemedicine use. Comments are due on October 16, 2017. CY 2018 Home Health PPS Proposed Rule Released On July 25, CMS issued the long-awaited proposed Calendar Year (CY) 2018 Medicare payment rates and wage index for home health agencies (HHAs) Proposed Rule, which projects Medicare payments to HHAs would be reduced by .4 percent ($80 million). CMS proposed to adopt the following three new measures, as required by the IMPACT Act: Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury; Application of Percent of Residents Experiencing One or More Falls with Major Injury (NQF # 0674); and Application of Percent of Long-term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631). CMS also proposed to implement the Home Health Grouper Model (HHGM) in 2019, using a 30-day episode of care, rather than 60-day periods. CMS states it would put more emphasis on clinical characteristics and other patient information in order to place patients into more meaningful payment categories. The overall impact of this proposed model, if budget neutral, is estimated to be a $950 million reduction in CY 2019 payments. Comments on the Proposed Rule are due on September 25, 2017. This proposal also includes a Request for Information (RFI) from the Agency to submit ideas for regulatory, subregulatory, policy, practice and procedural changes to better accomplish a more effective, simple and accessible health care system. FY 2018 Hospital IPPS and LTCH PPS Final Rule Released On August 2, CMS released its Fiscal Year (FY) 2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Final Rule. The Final Rule updates Medicare payment 6

and policies when patients are discharged from hospitals from October 1, 2017, to September 30, 2018. CMS projects that the rate increase, together with other changes to IPPS payment policies, will increase IPPS operating payments by approximately 1.3 percent and that changes in uncompensated care payments will increase IPPS operating payments by an additional 0.7 percent. Other additional payment adjustments will include continued penalties for excess readmissions, a continued 1 percent penalty for hospitals in the worst performing quartile under the Hospital Acquired Condition Reduction Program, and continued upward and downward adjustments under the Hospital Value-Based Purchasing Program. CMS projects that total Medicare spending on inpatient hospital services, including capital, will increase by about $2.4 billion in FY 2018. CMS is increasing the amount of uncompensated care payments made to acute care hospitals by $800 million to approximately $6.8 billion for FY 2018. Post-Recess Agenda When Congress returns September 5 from August recess, lawmakers will face a host of unresolved agenda items and impending deadlines. Congress is likely to pass a shortterm Continuing Resolution to keep the government funded past September 30. As noted previously, the House will also likely considering a 12-bill Omnibus package, including the four-bill “minibus” passed in July. With a recent announcement from Senate Majority Leader McConnell that Republicans will seek to go it alone on a rewrite of the tax code, Congress will need to agree to a unified Budget Resolution for Fiscal Year (FY) 2018 that includes Reconciliation instructions for tax reform. House Leaders are looking to hold a vote on an FY 2018 Budget Resolution shortly upon returning to Washington in September. Senate Budget Chairman Mike Enzi (R-WY) plans to follow suit with a mark-up of a FY 2018 Budget Resolution after the August recess. Congress will need to address several other “must pass” agenda items this fall. Children’s Health Insurance Program (CHIP) funding expires September 30. The Senate Finance Committee will hold hearings on CHIP funding the week of September 4, but at this point it is unclear if this could be a vehicle or companion for other legislation. Medicare extenders with varied expiration dates from September 30, 2017 – January

1, 2018, including Outpatient Therapy Caps, which are due to lapse on December 31, 2017, will also need to be considered. Committee staff have been working on the individual extenders for several weeks now and we expect a variety of extension dates, and potentially concerning health care offsets. Congress must also pass an increase to the debt ceiling. The White House and Republican Leadership are pushing for a “clean” debt limit increase, which would face opposition from Conservatives but could pass with Democratic support. The latest news from CBO is that Treasury’s “extraordinary measures” to push off the actual default date will expire sometime in early to mid-October, later than the September window that was reported early in the summer. *** As Members of Congress return to DC, we encourage you to voice concern for the needs of the elderly, disabled and vulnerable patients whom rehabilitation hospitals and units serve. Lawmakers will be very busy this fall while in DC but are only scheduled to be in town for 12 legislative days in September. Therefore, many members while in their districts will likely have open office hours, community town hall meetings, and also have the ability to make visits to your rehabilitation hospital and/or facility within their districts and states. Please take the time now to request that members of Congress visit you and get a chance to see the meaningful impact your services are having on patients’ lives! We fully expect the House Ways and Means Committee to turn to post-acute care (PAC) value-based purchasing proposals in the near future. Therefore, we must continue to educate our Members of Congress that the current bill under consideration is unacceptable and will harm patient access to all PAC providers. Please be in touch if we can help you in any way in your advocacy outreach. With thanks for all you do, Regards, Martha M. Kendrick

AMRPA Magazine September 2017

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MEDICARE TRUST FUND WILL REMAIN SOLVENT THROUGH 2029, TRUSTEES SAY

ach year the Board of Trustees (the Trustees) issues its annual report to Congress on the current status and projected condition of Medicare’s two trust funds over the next 75 years. The Hospital Insurance (HI) Trust Fund (Part A), which finances inpatient hospital and related care, and the Supplementary Medical Insurance (SMI) Trust Fund (Part B), which finances physician and outpatient care and Part D, which pays for prescription drugs.

•

The HI Trust Fund now has a projected 75-year actuarial deficit equal to 0.64 percent of payroll compared with last year’s estimate of 0.73 percent. This is much less than the 3.88 percent of payroll that the Trustees estimated before the ACA became law. The Trustees project that Medicare’s costs (for both the HI and SMI Trust Funds) will grow from 3.6 percent of gross domestic product (GDP) in 2017 to 5.6 percent of GDP in 2041. This increase occurs because the number of people receiving benefits will grow as the baby boom generation retires. Thereafter, Medicare’s costs are projected to grow more slowly, reaching 5.9 percent of GDP in 2091. Again, these increases are lower

premium for 2018 is projected to be $134, which is the same as the 2017 amount. However, many beneficiaries are currently paying a lower premium due to the hold harmless provision in the law that protected their Social Security benefits from being reduced in the past few years when there was no COLA, or the COLA was not large enough to cover the increase in the Part B premium.

Higher-income beneficiaries (incomes exceeding $85,000 for an individual and $170,000 for a couple) pay larger In 2016, the Medicare program provided income-related monthly premiums, health insurance coverage to 56.8 which are projected to range from million beneficiaries and total Medicare $187.50 to $428.60 in 2018, the same expenditures were $679 billion and income as in 2017. However, because the was $710 billion. Medicare and CHIP Reauthorization Act (MACRA) lowered certain The 2017 Trustees Report income thresholds used for shows that since the enactment determining the incomeof the Affordable Care Act related monthly adjustment (ACA), the Medicare Trust Fund The Trustees project that Medicare’s amounts to be paid by will remain solvent through beneficiaries in 2018, a greater 2029. Medicare’s financing has costs for the HI and SMI Trust Funds number of beneficiaries will be shown improvement due to the will grow from 3.6 percent of GDP in paying higher amounts. The implementation of payment annual deductible is projected and delivery system reforms 2017 to 5.6 percent in 2041. to remain at $183 for all that emphasize coordinated beneficiaries in 2018. care especially for persons with multiple chronic conditions than what was projected before the (MCC), incentives to reduce the rate of Medicare Part D enactment of health care reform when hospital readmissions, and a reduction • Part D expenditures as a percent of Medicare’s costs were projected to in the rate of increase in payments to GDP are expected to increase from grow from 3.5 percent of GDP in 2009 hospitals and private Medicare plans. 0.5 percent in 2016 to 1.17 percent to 11.3 percent of GDP in 2083. in 2090. The average annual increase • Costs for Part B (SMI) are growing due in expenditures for Part D is projected Financial Outlook of the Medicare to the aging population and rising to rise to 6.4 percent over the next Program health care costs. Part B spending, five years — compared to 5.2 percent • The Medicare Part A (HI) Trust Fund which was 2.1 percent of GDP in 2016, growth for the overall U.S. economy. will be solvent until 2029, which is is projected to increase to 3.4 percent one year later than was projected in 2037 and to 3.7 percent in 2091. The average Part D monthly premium last year. Solvency has improved These increases are lower than those is $35.63 in 2017, and is estimated by 12 years from the date that was projected before enactment of the to be $37.54 in 2018. In 2017, Part D projected before the ACA enactment, Affordable Care Act — i.e., that costs enrollees with incomes exceeding the which improved Medicare’s financing threshold of $85,000 for an individual by reducing the rate of increase in would rise to 4.5 percent of GDP in 75 and $170,000 for a couple are paying provider payments, phasing out years. an income-related monthly adjustment overpayments to Medicare Advantage amount in addition to their normal (MA) plans and increasing Medicare Medicare Part B Premium and plan premium, ranging from $13.30 to payroll taxes for high-income Deductible $76.20 per month. This is estimated to individuals and couples. • The Part B standard monthly 8

AMRPA Magazine September 2017

increase to $14.00 to $80.60 in 2018. The Part D annual deductible, which is $400 in 2017, will be $405 in 2018. Part B and Part D accounts in the SMI trust fund are expected to be adequately financed as premium income and general revenue income are reset each year to cover expected costs. However, this financing would need to increase faster than the economy to cover expected expenditure growth. Parts B and D Out-of-Pocket Costs • The Medicare Trustees project that by 2091, Parts B and D out-of-pocket costs — premiums and cost-sharing amounts — will consume 33 percent of the average Social Security check compared to 25 percent in 2017.

In 2016 the Medicare program provided health insurance coverage to 56.8 million people — 47.8 million were aged 65 and older. Over 32 percent have chosen to enroll in Part C private health plans that contract with Medicare to provide Part A and Part B. Conclusion Total Medicare expenditures were $679 billion in 2016. The Board projects that expenditures will increase in future years at a faster pace than either aggregate workers’ earnings or the economy overall and that, as a percentage of GDP, they will increase from 3.6 percent in 2016 to 5.9 percent by 2091 (based on the Trustees’ intermediate set of assumptions).

adequacy or their test of long-range close actuarial balance. Therefore, the Trustees concluded that there is a need for considerable steps to address these challenges. It encouraged early introduction of reforms to increase the time available for health care providers and beneficiaries to adjust. The Trustees recommend that Congress and the executive branch work closely together to address the depletion of the HI trust fund and the projected growth in HI and SMI expenditures. For the complete report please see: https://www.cms.gov/Research-StatisticsData-and-Systems/Statistics-Trends-andReports/ReportsTrustFunds/index.htm

The HI trust fund did not meet either the Trustees’ test of short-range financial

THINK ABOUT IT…

Are you receiving your Off the Record (OTR), Action Alerts and other email from AMRPA? On January 1, AMRPA changed vendors for the distribution of its Off the Record, Action Alerts, and other email communication and we want to make sure you aren’t missing these important messages. Our email analytics show that a few institutions’ servers are blocking AMRPA email, probably without knowing it. Don’t miss important deadlines, events or AMRPA news, whitelist (or add to your safe sender list) the following elements to ensure AMRPA email gets to you. • Whitelist the return email address: info@amrpa.org • Whitelist these domains: @informz.net and @informz.ca (Informz is our new email system) • Whitelist the IP address that these emails are coming from: 64.128.232.14 If you know there are multiple AMRPA contacts at your institution, ask your IT staff to help you do this whitelisting at the institutional level so that your colleagues can receive the same benefit! Keep your membership up to date – current members receive AMRPA magazine, the weekly enewsletter and other benefits – renew today if you haven’t already.

CMS PROPOSES MAJOR CHANGES TO THE MEDICARE HOME HEALTH PAYMENT SYSTEM

n July 28, 2017, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule (CMS-1672-P) that updates the home health prospective payment system (HH PPS) payment rates, including the national, standardized 60day episode payment rates and the national per-visit rates, effective for home health episodes of care ending on or after January 1, 2018. The proposed rule also makes case-mix methodology refinements, and changes the unit of payment from 60-day to 30day episodes of care, to be implemented for home health services beginning on or after January 1, 2019. The proposed rule would also change the Home Health Value-Based Purchasing (HHVBP) Model and the Home Health Quality Reporting Program (HH QRP). CMS solicited comments which are due on September 25, 2017.

benefit without Congressional directives. Preliminary analysis suggests that if finalized as proposed, the home health benefit would cater to a more intensive short-term patient at the expense of beneficiaries with chronic illnesses and disabilities of long-term or permanent duration. This may lead to greater rates of discharge from the acute care hospital directly to home health, bypassing inpatient hospital rehabilitation and skilled nursing facility care. Medicare beneficiary organizations believe that the impact on those whose outcomes do not necessarily improve with home health, but still need skilled services to remain functional and independent, will lose access to care over time.

The Coalition to Preserve Rehabilitation (CPR), a rehabilitation access coalition to which AMRPA belongs, will file comments on CMS’ refinement of its Home Health Groupings Model (HHGM), namely the change in the length of the episode of care from 60-day to 30-day episodes of care, and this change’s implications on the Jimmo v. Sebelius decision, which states that skilled services are covered under the Medicare home health benefit even if the patient does not show signs of improvement. It is the standard that allows coverage for skilled therapy and nursing services that maintain and prevent deterioration of function. These issues are discussed further below.

Reduced Reimbursement Rates Follow Recent Trend, Effect Providers and Care The proposed rule plans to cut reimbursement for home health agencies (HHAs) by $80 million for FY 2018, which represents a 0.4 percent decrease from the previous fiscal year. Payments were cut in FYs 2014 (by $200 million), 2015 (by $60 million), 2016 (by $260 million), and 2017 (by $130 million). CMS proposes that the future cuts proposed would garner $950 million in savings for calendar year 2019. Some industry estimates suggest the cuts would be much deeper. While CMS asserts that these cuts will not affect access issues, more than 900 home health providers have left Medicare within the last three years, according to a July article in Modern Healthcare. Furthermore, Medicare-enrolled HHAs are expected to drop by 7.8 percent, from CMS’ 2014 estimate of 11,781, to the proposed rule’s estimate of 10,860 for calendar year 2019.

Initial Reaction from the Home Health Community Both provider and patient organizations have serious concerns with the proposed rule. Many believe the significant structural changes to the regulatory framework exceed the authority the Department of Health and Human Services has to regulate the home health

Existing Home Health Prospective Payment System Currently under the HH PPS, Medicare pays home health payments on the basis of a national, standardized 60-day episode payment rate that is adjusted for the applicable case-mix and age index. The national, standardized 60day episode rate includes the six HH

disciplines (physical therapy, speechlanguage pathology, occupational therapy, skilled nursing, home health aide [HHA], and medical social services). Payment for non-routine supplies (NRS) is not included, nor is durable medical equipment. (The proposed rule does not affect the requirements or policies relating to durable medical equipment or furnishing negative pressure wound therapy using a disposable device.) Medicare pays under the home health benefit if a physician certifies that the services are medically necessary, and submits a plan of care. If the physician finds it medically necessary, the patient can be recertified for an additional 60 days. There are currently no limits on recertifications of home health

ABOUT THE AUTHORS

Peter W. Thomas Principal, counsel to the AMRPA Consumer and Clinical Affairs Committee

Steve Postal Director, Health Policy, Powers Law Firm AMRPA Magazine September 2017

services. Under the current HH PPS, the average payment is $2,961.38. Freestanding HHAs average 17.2 percent profit margin under the current model, according to the proposed rule, which has drawn significant attention from the Medicare Payment Advisory Commission (MedPAC) and CMS. CMS Proposes Change from 60-Day Billing to 30-Day Billing In the proposed rule, CMS proposes to include non-routine supplies in the base payment rate, which will mean that wageindex adjustments will apply to non-wage related costs. CMS proposes to change the unit of payment from 60-day to 30day episodes of care. CMS stated in the proposed rule that when it examined the resources used within a 60-day episode of care, it identified differences in resource utilization between the first and second 30-day periods within the 60-day episode. CMS noted that there were on average more visits, and higher costs, during the first 30 days. There were more visits for not only skilled nursing and home health aide services, but physical

therapy, occupational therapy, and speech language pathology as well. CMS thus reasoned that dividing a 60-day episode into two 30-day periods would more accurately apportion payments. In fact, CMS found that approximately 25 percent of episodes were 30 days or less in length, and therefore a second 30-day payment period would not be needed for these cases. CMS also proposes a switch to a 30-day payment period to align with other Medicare settings such as hospices and SNFs. This proposed change accounts for a large percentage of the cost savings expected from this proposal. Truncating payment periods to 30day episodes will likely provide access issues for Medicare beneficiaries who need ongoing or long-term home health services to meet the needs of their chronic condition or disability. The majority of home health episodes are still greater than 30 days in length. Shifting to a 30-day payment period would likely create an undue administrative

burden for HHAs, and these providers may try to truncate or stint on medically necessary care. Alternatively, this policy proposal could influence HHAs to provide more intense therapy in the first 30-day episode, and less following that time period. In addition, they may seek healthier patients with fewer longterm rehabilitation needs. Therefore, this policy proposal has the potential to put in place incentives that may harm Medicare patients, especially those with chronic or disabling conditions. Shorter Payment Periods Implicate Jimmo Decision A shorter payment period would be particularly onerous given the recent Jimmo v. Sebelius settlement decision that clarifies Medicare coverage of skilled services in the home health setting to maintain an individualâ&#x20AC;&#x2122;s function, not only to improve it. Pursuant to Jimmo, medically necessary skilled nursing and therapy services provided by or under the supervision of skilled personnel are covered services by Medicare if the services are needed to improve a 11

beneficiary’s condition, maintain the individual’s condition, or prevent or slow their decline. AMRPA believes that by truncating the payment period, access to essential, ongoing skilled care will likely be compromised. Similarly, patients need not demonstrate improvement in order for skilled services to be covered as reasonable and necessary. A 30-day payment period creates a payment system where providers have financial incentives to “cherry pick” patients who are more likely to improve and who have rehabilitation or skilled care needs that are shorter in duration. This significantly complicates compliance with Jimmo for Medicare beneficiaries in need of greater-than-average or prolonged home health services. Existing Therapy Thresholds and CMS Proposal to Eliminate Them Under the existing HH PPS, HHAs receive higher payments for providing more therapy visits once certain thresholds are reached. But CMS argued in the Proposed Rule that this has caused a higher average number of therapy visits per 60-day episode of care. CMS also pointed to a study that showed a sharp increase in the percentage of episodes just above payment thresholds, which suggests that the home health industry is responding to the financial payment incentives of the thresholds. CMS also cited an investigation conducted by the Senate Committee on Finance in 2010 that looked into the therapy practices of the four largest publically traded home health companies. This investigation found that three of these companies “encouraged

therapists to target the most profitable number of therapy visits, even when patient need alone may not have justified such patterns.” CMS further cited this investigation as highlighting the abrupt and dramatic responses the home health industry has taken to maximize reimbursement under the therapy threshold models. CMS also cited MedPAC as continuing to advocate for the removal of the therapy thresholds as a way to counter over-utilization of therapy that is not clinically necessary. In response to these concerns, CMS proposes to eliminate the therapy thresholds in the case-mix system. New Home Health Resource Groupings Favor Institutional Care, Including IRFs Under the proposed rule, CMS will pay more for home healthcare if the patient comes from an institution (i.e., a hospital, inpatient rehabilitation facility (IRF), skilled nursing facility (SNF) or longterm care hospital (LTCH)), versus a community setting. As an example, the payment weights for the neuro clinical group, with a low functional level, with a comorbidity adjustment, with variable timing (either “early” or “late,” where “early” is the first 30 days of care) and admission sources (either community or institution) are as follows: •

Early, Community = 1.3458

•

Early, Institutional = 1.5167

•

Late, Community = 0.9555

•

Late, Institutional = 1.3985

This proposed revision provides a financial incentive for HHAs to select patients coming from institutions like IRFs because the payment weight favors these

patients. However, since “institutions” include acute care hospitals, there may be incentives to such hospitals to bypass IRF care altogether and send some patients directly home, with home care agencies expected to provide sufficient therapy under the respective payment weight. Beneficiary organizations are concerned that, over time, patients will have to be admitted to an inpatient setting before gaining access to home health services. They believe individuals in the community will be less apt to be able to obtain access to home health by providers in their area, based on the relatively low payment weights in the proposed rule. Conclusion The home health proposed rule does offer some potential incentives for HHAs to admit patients from IRFs, but it also provides this incentive to several other institutional settings, including acute care hospitals and skilled nursing facilities. The proposed rule dramatically cuts home health reimbursement and alters the structure of the HH benefit without Congressional direction or authority. It may lead to discrimination against community providers as well as patients living at home who develop a need for home health care services without first being admitted to a hospital or postacute care setting. A 30-day episodic payment runs counter to the policy aspirations of the Jimmo decision, and will place pressure on HHA’s in meeting their obligations to provide services to Medicare beneficiaries with disabilities and chronic conditions. AMRPA will keep its members apprised of developments on the home health rule as they occur.

AMRPA Magazine September 2017

HAVE A HAND IN THE SOLUTION

Fighting Restrictive Medicare Policies â&#x20AC;˘ Challenging Aggressive Contractors

FAIR

Fund for Access to Inpatient Rehabilitation

Learn More and Join the FAIR Fund Today at www.thefairfund.org. We Are the Fund for Access to Inpatient Rehabilitation, a Common Legal Defense Fund Composed of Americaâ&#x20AC;&#x2122;s Top Inpatient Rehabilitation Hospitals and Units.

We need all IRFs to lend a hand in challenging aggressive Medicare auditors in order to level the playing field, and preserve and enhance patient access to IRF care. For more information, or to speak with a FAIR Fund leader or staff member, contact Rebecca Schnorf at 13 rschnorf@firminc.com or at (217) 321-2477.

FAIR FUND LAUNCHES MEMBERSHIP DRIVE TO COMMEMORATE 10 YEARS OF LEGAL ADVOCACY ON IRF MEDICARE AUDITS AND APPEALS

he Fund for Access to Inpatient Rehabilitation (FAIR Fund), AMRPA’s sister organization, celebrates ten years of legal advocacy next year on behalf of patients and providers of inpatient hospital rehabilitation. FAIR Fund leaders have launched an ambitious membership campaign to strengthen the FAIR Fund’s legal advocacy efforts and broaden support from the IRF field. For more information on membership, please visit www.thefairfund.org. “Every IRF leader I speak with is frustrated with the Medicare audit and appeals process, but too few IRF leaders put their money where their mouth is,” said Felice Loverso, President of the FAIR Fund and President and CEO of Casa Colina Hospital and Centers for Healthcare. “The FAIR Fund’s work benefits all IRFs and we need everyone to lend a hand so we are all pulling in the same direction. That’s the only way to help level the playing field on IRF audits and appeals.” FAIR Fund is an independent, common legal defense fund whose members represent inpatient hospitals and units. FAIR was founded by key leaders in the American Medical Rehabilitation Providers Association (AMRPA) to focus exclusively on legal approaches to address aggressive audits by Recovery Audit Contractors (RACs) and other Medicare contractors. Too many IRFs face extensive burdens of time and money to challenge denials of Medicare claims based on technical documentation errors or questions about medical necessity. The FAIR Fund was formed by IRFs that were tired of fighting payment denials one denial at a time and wanted to set favorable legal

o The FAIR Fund’s briefs educated the courts about the particular impact of the ALJ backlog on IRFs and their patients.

precedent that would assist all IRFs in the future. The FAIR Fund works with the Powers firm, a Washington, DC-based health care law firm immersed in representation of IRFs and other health care providers. Peter Thomas, Ron Connelly and Christina Hughes form the Powers team devoted to FAIR Fund’s activities. The combined strengths of this team include expertise in Medicare audits and appeals, legal and policy strategic counsel, Medicare administrative and federal court litigation, IRF coverage and payment policy, Medicare compliance, and waste, fraud and abuse issues. Over the past ten years, the FAIR Fund has been very active supporting litigation to benefit IRFs, pursuing legal advocacy with federal agencies and Congress, and providing educational materials and technical assistance to its members to help them successfully challenge Medicare audits and appeals. The FAIR Fund’s most significant activities to date include the following:

o The FAIR Fund’s briefs were cited favorably by the DC Circuit and the D.C. District Court. The FAIR Fund convinced the DC Circuit that the ALJ backlog is having a real impact on human health and welfare, which was a significant factor supporting the DC District court’s subsequent order requiring HHS to clear the ALJ backlog. •

Spearheaded opposition to Medicare contractors that reopen old claims by representing Palomar Medical Center in an important case in the Ninth Circuit Court of Appeals.

•

Challenged medical necessity denials of IRF care to the Medicare Appeals Council with a very positive result: the Council remanded the cases to the ALJ, requiring a more thorough analysis, including testimony by an independent medical expert. These cases were resolved in the provider’s favor.

Litigation •

Actively engaged in litigation to force the Department of Health and Human Services (HHS) to decide administrative law judge (ALJ) appeals within the 90-day deadline required by the Medicare statute. The FAIR Fund submitted four friend-of-the-court briefs to the DC Circuit Court of Appeals, the Fourth Circuit Court of Appeals, the U.S. District Court for the District of Columbia, and the U.S. District Court for the Eastern District of North Carolina in support of hospitals seeking to enforce the deadline.

Advocacy from a Legal Perspective •

Partnered with AMRPA, as well as the Federation of American Hospitals (FAH), and other IRF stakeholders to negotiate with officials from the Centers for Medicare and Medicaid Services (CMS) to settle pending IRF ALJ appeals. These discussions are ongoing. o The FAIR Fund prepared an extensive white paper to educate these officials about IRF care and coverage, and the extensive burden caused by technical AMRPA Magazine September 2017

broad-based reforms to the audit and appeals processes.

documentation denials. o The FAIR Fund worked with AMRPA to survey IRFs to compile data about the volume and success rate of Medicare audits and appeals. The resulting statistics confirmed anecdotal evidence that IRFs win approximately 80 percent of Medicare appeals. The FAIR Fund and other IRF groups pointed to this survey to support their settlement proposals to CMS. •

Prepared comments to CMS on its recent Request for Information (RFI) on CMS Flexibilities and Efficiencies in the Inpatient Rehabilitation Facility (IRF) Prospective Payment System Proposed Rule for FY 2018, as well as the Medicare Red Tape Relief Project being advanced by the House Ways and Means Committee. The FAIR Fund requests modifications to the IRF coverage regulations to ease burdens on IRFs and their patients and other, more

•

Sent a letter to HHS Secretary Price asking him to grant regulatory relief to providers by withdrawing the pending Medicare regulation on the 90-day timeframe for ALJ decisions of Medicare claim appeals.

•

Submitted detailed written comments on two separate occasions to the Senate Finance Committee responding to the draft Audit and Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act, which would reform Medicare audit and appeals processes. The FAIR Fund joined AMRPA in submitting comments to this important legislation and stressed strong opposition to a proposal to allow Recovery Auditors to perform pre-payment review.

•

Submitted comments to the Office of Medicare Hearings and Appeals advocating improvements in ALJ procedures.

•

Offered significant comments to moderate the 2010 Medicare IRF coverage criteria. In June 2009, the FAIR Fund fully engaged with CMS on the proposed revisions to the federal regulations and the Medicare manuals from a legal perspective, complementing AMRPA’s advocacy strategy on IRF coverage policy. o The FAIR Fund successfully challenged CMS’s merger of the so-called “60 percent rule” IRF classification criteria and the coverage standards, among many of the other changes proposed. o The FAIR Fund strenuously opposed CMS’s efforts to create “rules of thumb” for coverage. o Many of the FAIR Fund’s positions were reflected in CMS’s final regulations and manuals, including maintaining the distinctions between criteria used to classify IRFs and the actual coverage criteria, the removal 15

of formal “rules of thumb,” and exceptions to the various timeframes for documentation and services, including the “Three Hour Rule” for therapy services.

•

will be available for new and existing FAIR Fund members who join for the 2018 calendar year.

Become a FAIR Fund Member Today Fewer than 15 of the premier IRFs across the country shoulder the burden The FAIR Fund continuously of financially supporting the FAIR • Slides and transcripts from monitors legal, regulatory and Fund, and yet its accomplishments various CMS presentations on policy developments in IRF are designed to benefit ALL inpatient the IRF coverage criteria. coverage and appeals, analyzes rehabilitation hospitals and units. these developments Medicare audits and appeals, from an IRF perspective, the ALJ backlog and aggressive and reports key tactics by CMS contractors developments to will continue as long as they FAIR FUND MEMBERSHIP DRIVE! members. remain unchallenged. FAIR Become a member of the legal defense fund Fund’s goal is to level the The FAIR Fund created fighting for IRFs and the patients they serve. playing field so that IRFs can a comprehensive guide provide medically necessary Fund for Access to Inpatient Rehabilitation has a to the 2010 coverage rehabilitation services to decade-long track record of using legal advocacy criteria for FAIR Fund beneficiaries with the security to level the playing field in the area of Medicare members, titled, of knowing their services will audits and appeals. Help fight back against Medical Necessity be covered and reimbursed. Guide: Minimizing the aggressive RACs and other contractors. Help your The work of the FAIR Fund is Impact of Medicare colleagues set favorable, binding IRF coverage critical to the future of the IRF Audits of Inpatient and documentation standards. field. All IRF leaders should Hospital Rehabilitation seriously consider joining the Care. FAIR Fund today. Join FAIR Fund TODAY! o The compendium was designed to serve For more information, For more information on FAIR as a useful, oneFund membership, or to speak visit www.thefairfund.org stop reference guide directly with a FAIR Fund or call Rebecca Schnorf for administrators Steering Committee member and staff at IRFs or FAIR Fund counsel, please (217-321-2477) nationwide who are visit www.thefairfund.org or confronted with the call Rebecca Schnorf at 217need to respond 321-2477. to Additional Documentation • “10 Things Providers Should Requests and challenge Know About Medicare Medicare denials at every level of Audits.” administrative appeal. • Copies of reference materials, o This compendium includes a including revised manual number of checklists and tips, sections. including: • A copy of the final Medicare • Electronic template appeal IRF regulations. letters for FAIR Fund members • An updated compendium to customize for their appeals

Education and Technical Assistance to FAIR Fund Members •

at the redetermination, reconsideration and ALJ levels of appeal. These templates were designed to help IRFs efficiently and effectively appeal large numbers of claim denials and helped build a consistent set of legal arguments across the country.

AMRPA Magazine September 2017

15TH ANNUAL AMRPA EDUCATIONAL CONFERENCE & EXPO

OCTOBER 23-25, 2017 • SWISSÔTEL

We're bringing together the most influential voices in rehab for a deep dive into industry trends and issues. View the speaker line-up on our website! This is your chance to: • • • •

Get a firsthand look at new technologies and innovative strategies Advance the interests of your practice Network with key individuals and influencers Positively influence patient care

Learn from other rehab professionals' experiences with issues impacting the post-acute care industry. Questions? Please contact Rachel Koresky, AMRPA Member Services Coordinator, at rkoresky@amrpa.org. To discuss exhibit and sponsorship opportunities, contact Samantha Schwarz at sschwarz@amrpa.org or 202-207-1132.

CMS TRANSMITTALS OF INTEREST FOR MEDICAL REHABILITATION PROVIDERS

September 2017

Note: The Centers for Medicare and Medicaid Services (CMS) daily publishes official transmittals used for communicating reminder items, requests for action or information to fiscal intermediaries and carriers. In this section of the AMRPA magazine you will find specifically selected transmittals listed that would be of interest to medical rehabilitation providers. To view the entire lists please see: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017-Transmittals.html Transmittal #

Issue Date

Subject

Implementation Date

R3832CP

2017-08-09

Fiscal Year (FY) 2017 Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) PPS Changes

2017-10-03

R3825CP

2017-08-04

October Quarterly Update to 2017 Annual Update of HCPCS Codes Used for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Enforcement

2017-10-02

R1891OTN

2017-08-04

Provider-Based Determination

2017-11-06

R177DEMO

2017-08-04

Next Generation Accountable Care Organization (NGACO) Year Three Benefit Enhancements

2018-01-02

R3829CP

2017-08-04

Revisions to the Home Health Pricer to Support Value-Based Purchasing and Payment Standardization

2018-01-02

R1895OTN

2017-08-04

System Changes to Implement Section 15010 of the 21st Century Cures Act, Temporary Exception for Certain Severe Wound Discharges from Certain Long-Term Care Hospitals (LTCHs)

2018-02-01

R3824CP

2017-08-02

July Quarterly Update for 2017 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedule

2017-07-03

R1887OTN

2017-07-28

Shared System Enhancement 2015: Identify Inactive Medicare Demonstration Projects Within the Common Working File (CWF)

2018-04-02

R734PI

2017-07-28

Update to Reporting Requirements

2017-06-27

R1883OTN

2017-07-28

System Changes to Implement Section 15009 of the 21st Century Cures Act, Temporary Exception for Certain Spinal Cord Specialty Hospitals under the Long Term Care Hospital (LTCH) Prospective Payment System (PPS)

2017-01-02

R3814CP

2017-07-27

Updated Editing of Always Therapy Services - MCS

2018-01-02

R3813CP

2017-07-27

Accepting Hospice Notices of Election via Electronic Data Interchange

2018-01-02

R733PI

2017-07-27

Clarification of Certificate of Medical Necessity (CMN) and Durable Medical Equipment Information Forms (DIFs)

2017-08-28

R1875OTN

2017-07-27

ICD-10 Coding Revisions to National Coverage Determinations (NCDs)

2018-01-02

R1877OTN

2017-07-27

Common Working File (CWF) to Modify CWF Provider Queries to Only Accept National Provider Identifier (NPI) as valid Provider Number

2018-01-02

R1870OTN

2017-07-27

Correcting Payment of Inpatient Prospective Payment System (IPPS) Transfer Claims Assigned to Medicare Severity-Diagnosis Related Group (MS DRG) 385 and Allowing Part A Deductible on Medicare Secondary Payer (MSP) Same Day Transfer Inpatient Claims

2018-01-02

R1880OTN

2017-07-27

Shared Savings Program (SSP) Demonstration Code 77 Modification

2018-01-02

R1884OTN

2017-07-27

Analysis Only- Medicare Reporting on the Return of Self-Identified Overpayments

2018-01-02

R3811CP

2017-07-25

Percutaneous Image-guided Lumbar Decompression (PILD) for Lumbar Spinal Stenosis (LSS)

2017-06-27

R200NCD

2017-07-25

Percutaneous Image-guided Lumbar Decompression (PILD) for Lumbar Spinal Stenosis (LSS)

2017-06-27

R3809CP

2017-07-21

October 2017 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files

2017-10-02

AMRPA Magazine September 2017

R732PI

2017-07-21

Clarifying the Instructions for Amending or Correcting Entries in Medical Records

2017-08-22

R36COM

2017-07-21

Updates to Pub. 100-09, Chapter 6 Beneficiary and Provider Communications Manual, Chapter 6, Provider Customer Service Program

2017-08-22

R3807CP

2017-07-14

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 23.3, Effective October 1, 2017

2017-10-02

R67QRI

2017-07-14

Fiscal Year 2018 and After Payments to Skilled Nursing Facilities That Do Not Submit Required Quality Data

2017-08-14

R1865OTN

2017-07-14

Health Insurance Portability and Accountability Act (HIPAA) Electronic Data Interchange (EDI) Front End Updates for January 2018

2018-01-02

R1866OTN

2017-07-14

National Provider Identification Crosswalk System (NPICS) Retirement Analysis Only - Engage Shared Systems Maintainers (SSMs) and Medicare Administrative Contractors (MACs) in Meetings and Correspondence Related to the NPICS Retirement with the Integrated Data Repository (IDR) Team

2018-01-02

R291FM

2017-07-13

Notice of New Interest Rate for Medicare Overpayments and Underpayments -4th Qtr Notification for FY 2017

2017-07-18

Updated as of August 15, 2017

JOIN TODAY!

EDUCATION , COMMUNICATION, PARTICIPATION & OPERATIONAL ASSISTANCE AMRPA: Working Together To Preserve Access To Medical Rehabilitation Maggie Ramirez · VP ofTogether Membership Services · 347-573-3732 · mramirez@amrpa.org AMRPA: Working to Preserve Access to Medical Rehabilitation Rachel Koresky, AMRPA Member Services Coordinator | 202-591-2469 | rkoresky@amrpa.org

WHEN DOES A PHYSICIAN BECOME A REHABILITATION PHYSICIAN? By Lisa Werner, MBA, MS, CCC-SLP

to them acceptable parameters for physicians with an opportunity to gain uring my consultations admission and making themselves experience working under a physiatrist for rehabilitation facilities, available to discuss patient evaluations falls on the providers. The provider providers frequently ask on an ongoing basis. must then create and document their me what qualifications own credentialing, making sure that Centers for Medicare Post-admission physician evaluations any rehabilitation physician has the and Medicaid Service (CMS) considers should include plans of care that necessary prerequisite experience to fill necessary for rehabilitation physicians. anticipate patients’ medical and the role. Most can’t seem find specific answers functional needs. The plan portion within CMS guidelines or documentation. of the H&P should address active For this article, I would like to focus on This doesn’t come as much of a surprise; medical conditions, risks, potential patient documentation. The end goal at the moment, we don’t have a definitive complications, and functional deficits all of CMS’s documentation rule was to answer. Currently, our best resource is while providing instructions to ensure make sure that rehabilitation physicians the documentation requirements laid their proper management. The plan were at the center of all decisionout by CMS. They state that, under should be as thorough as possible making for patients in rehabilitation audit, patient documentation should and incorporate care rendered by the units or hospitals. Because this is more make it readily apparent whether or team as a whole. Any documentation not a doctor has overseen all aspects recorded by the team during of a patient’s care, from the first few days of a patient’s documenting rehabilitation stay should include changes needs and synthesizing plans to the care regimen that were of care to updating those plans in conjunction with team The end goal of CMS’s documentation not anticipated or planned for in the physician’s admission conferences and commenting rule was to make sure that assessment. on the patient’s functional rehabilitation physicians were progress. In essence, CMS Rehabilitation physicians’ defines a rehabilitation at the center of all decision-making medical progress notes physician as one who is for patients in rehabilitation units should also document active involved at every stage of medical conditions, risks and rehabilitative patient care. or hospitals. functional needs, taking care to explain how these needs are The only documented being managed. These notes “standards” for rehabilitation should identify what treatment is working of a general rule than a specific set of physicians are the CARF standards, well, what conditions need continued guidelines, I would like to discuss how which state that, to be considered fit focus, any obstacles in patient progress, to best approach your documentation to serve as a rehabilitation physician, and how to overcome those obstacles so that, under audit, it leaves no doubt a doctor must have completed either in the near future. Medical progress as to whether or not your rehabilitation training or a fellowship in Physical notes should provide a comprehensive physician is fit for their position. Medicine and Rehabilitation, or have summary of everything being done at least two years of experience with to manage patient care, illuminating From the very beginning, a rehabilitation rehabilitation services. daily care needs in an effort to give a physician should be actively involved in complete, thorough understanding of the entire referral development process Most of us recognize that, for a variety why each patient is receiving intense, rather than simply reviewing preof reasons, some providers are simply ongoing rehabilitation. admission screenings and approving unable to hire a physician with training admissions. The physician should be in in Physical Medicine and Rehabilitation. Physicians must also be actively involved regular contact with liaisons, relaying Thus, the responsibility for providing 20

AMRPA Magazine September 2017

in team conferences, directing each meeting, reviewing barriers to progress, identifying ways to manage medical, behavioral, cognitive, sleep, mood and/ or pain issues, and eliciting information from each team member in order to most effectively update the plan of care. A rehabilitation physician should approach conferences with a proactive mindset, planning for as much as they can while their teams are available for input. CMS requires rehabilitation physicians to complete the overall plan of care. This document exists so that the physician can synthesize and incorporate all elements of the patientâ&#x20AC;&#x2122;s rehabilitation stay in one place. Expected goals, anticipated outcomes, interventions, scope of services with frequency and duration, anticipated discharge disposition, and estimated length of stay should all be thoroughly addressed. Finally, rehabilitation physicians are required to complete discharge summaries, which contain reviews of the entire course of care. Physicians

should make sure to review both patient medical management needs as well as functional outcomes. While, again, we donâ&#x20AC;&#x2122;t have specific guidelines for defining this role, approaching documentation in this manner should indicate that the rehabilitation physician does much more than simply see patients and document care. They should be available to all staff members for discussions about patient care and caregiving techniques. A rehabilitation physician guides their team, supports them, and learns from them in order to provide the best possible care to patients. When this process comes together, rehabilitation physicians should have sufficient information for inclusion in their progress notes that verifies their active role in the rehabilitation process.

our charts by various CMS auditors, the quality and completeness of physician documentation is of the utmost importance. Make sure that your documentation reflects the active, supervisory role physicians play during rehabilitation stays to avoid any potential denials for lack of close medical supervision. Consistently audit your charts for quality and enforce strict timeframe and signature requirements. If these bases are covered, you should have no problems verifying that your physicians are the perfect fit for their roles.

In conclusion, rehabilitation physicians and their team are in complete control of their documentation practices and, in turn, their status in the eyes of an auditor. With the increased scrutiny of 21

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AMRPA Magazine September 2017

CMS ISSUES FY 2018 SNF PPS FINAL RULE By Mimi Zhang, Policy and Research Associate, AMRPA

n July 31, the Centers for Medicare & Medicaid Services (CMS) issued a final rule outlining fiscal year (FY) 2018 Medicare payment policies and rates under the Skilled Nursing Facility Prospective Payment System (SNF PPS), the SNF Quality Reporting Program (SNF QRP), and the SNF Value-Based Purchasing (SNF VBP) Program. This article covers key provisions of the rule. Policy Provisions The rule finalizes a net market basket increase of 1 percent, as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS estimates that aggregate payments to SNFs will increase in FY 2018 by $370 million from FY 2017 payments. The rule addresses several parts of the SNF VBP program, set to begin in FY 2019, such as updated performance standards, a proposed logistical exchange function for SNF performance and incentive payments, and details on publishing SNF performance to the public. For example, for the SNF VBP, CMS is limiting the program to one readmission measure per year and reducing the total amount of Medicare payments to a SNF by 2 percent to fund the value-based incentive payments. Finally, CMS also clarifies definitions and provisions related to investigation of complaints and team composition and to align regulatory provisions for investigation of complaints with the statutory requirements of sections 1819 and 1919 of the Social Security Act (SSA). SNF Quality Reporting Program Under the SNF Quality Reporting

Program (QRP), facilities that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to their annual market basket percentage update. Post-acute care (PAC) providers have seen numerous changes to their QRP’s in recent years due to the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT), which seeks to develop standardardized quality measures and patient assessment data items across PAC settings. This year’s changes are also aligned with those in other PAC settings with providers seeing similar changes or adopting measures, or modified versions thereof, which are currently used in other PAC QRPs. In the final rule, CMS adopted four new measures on functional status for the SNF QRP. These measures are an application of the function measures currently used in the Inpatient Rehabilitation Facility QRP (IRF QRP), and are: •

•

Application of IRF Functional Outcome Measure: Change in SelfCare Score for Medical Rehabilitation Patients (NQF #2633) Application of IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634) Application of IRF Functional Outcome Measure: Discharge SelfCare Score for Medical Rehabilitation Patients (NQF #2635) Application of IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636)

SNFs will begin reporting on the measures in October 2018 for the FY 2020 SNF QRP reporting year.

Highlights: •

•

Aggregate payments to SNFs will increase by $370 million in FY 2018. CMS adds four functional status outcome measures and will begin publically reporting six new measures in 2018.

CMS also finalized its replacement of the current pressure ulcer measure with an updated version of the measure titled, “Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury.” This pressure ulcer measure was similarly modified this year for the IRF QRP and Long-term Care Hospital QRP (LTCH QRP). CMS also finalized its proposals to publicly report data on six (6) additional measures in CY 2018: •

•

Application of Percent of Long-term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631) Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (NQF #0678) (assessmentbased) o Due to the phase-out of the measure finalized in this rule, CMS will discontinue the public reporting of NQF #0679 for SNF by October 2020. Application of Percent of Residents Experiencing One or More Falls with Major Injury (NQF #0674) (assessment-based) Medicare Spending Per BeneficiaryPAC SNF QRP (claims-based) 23

• •

Discharge to Community-PAC SNF QRP (claims-based) Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP (claims-based).

Notably, CMS did not finalize its proposals to begin collecting new standardized patient assessment data items in October 2018. This was a much-welcomed decision for SNFs, IRFs and LTCHs, as CMS in their respective proposed rules had proposed adding a significant number of data items to PAC assessment instruments in order to meet the IMPACT Act’s statutory timeline. Instead, CMS is finalizing its proposals that the data reported for the measures “Changes to Skin Integrity Post-Acute Care: Pressure Ulcer/Injury” and “Application of Percent of Long-term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631)” will both satisfy the definition of standardized patient assessment data. SNF Value-Based Purchasing Program The SNF VBP program has adopted scoring and operational policies for its first year (FY 2019) and has specified measures and program features as required by statute. The FY 2018 SNF PPS final rule includes additional program 24

proposals, including an exchange function approach to implement valuebased incentive payment adjustments beginning October 1, 2018. The SNF VBP program’s scoring and operational policies for its first year (FY 2019) include: • •

•

The program will include one readmission measure for each year. CMS will reduce the adjusted federal per diem rate applicable to each SNF in a fiscal year by 2 percent to fund the value-based incentive payments for that fiscal year. The total amount of value-based incentive payments that can be made to SNFs in a fiscal year will be 60 percent of the total amount withheld from SNFs’ Medicare payments for that fiscal year, as estimated by the Secretary. The program will pay SNFs ranked in the lowest 40 percent less than the amount they would otherwise be paid in the absence of the SNF VBP. Both public and confidential facility performance reporting will be conducted.

2018 final rule include performance and baseline periods for the FY 2020 program year, updated values for performance standards for FY 2020, additional details for the Review and Correction process for SNFs’ performance information to be made public on Nursing Home Compare, and a revision to the previously-adopted rounding policy for SNF performance scores. The SNF VBP policies in the FY 2018 final rule also include performance and baseline periods for the FY 2020 Program year, updated values for performance standards for FY 2020, additional details for the Review and Correction process for SNFs’ performance information to be made public on Nursing Home Compare, and revised the previously-adopted rounding policy for SNF performance scores. The FY 2018 SNF PPS final rule was published in the August 4, 2017, edition of the Federal Register.

In addition to the logistic exchange function CMS is finalizing in the final rule, the SNF VBP program policies in the FY AMRPA Magazine September 2017

NIH FUNDED STUDY SUPPORTS LINK BETWEEN COGNITION AND VASCULAR HEALTH

long-term study suggests that middle-aged Americans who have vascular health risk factors, including diabetes, high blood pressure and smoking, have a greater chance of suffering from dementia later in life.

23 follow-up years. When they initually analyzed the influence of factors recorded during the first exams, the researchers found that the chances of dementia increased more with age followed by the presence of APOE4, a gene associated with Alzheimer’s disease. Whites with one copy of the APOE4 gene had a greater chance of dementia than blacks. Diabetes was almost as strong a predictor of dementia as the presence of the APOE4 gene.

having a stroke, which is also associated with the presence of vascular risk factors, may explain these findings, the team reanalyzed the data of participants who did not have a stroke and found similar results. Diabetes, hypertension, prehypertension and smoking increased the risk of dementia for both stroke-free participants and those who had a stroke.

• The study, Associations Between Midlife Vascular Risk Factors and 25-Year Incident Dementia in the Atherosclerosis Risk in In a separate study partially funded by • Communities (ARIC) Cohort, funded by the NIH’s National Institute on Aging, Dr. the National Institutes of Health (NIH) Gottesman’s team analyzed brain scans and published in JAMA Neurology was from a subgroup of ARIC participants who led by Rebecca Gottesman, MD, PhD, did not have dementia when they professor of neurology at entered the study. They found Johns Hopkins University in that the presence of one or more Baltimore. Her team analyzed vascular risk factors during midlife the data of 15,744 participants Diabetes, hypertension, was associated with higher levels in the Atherosclerosis Risk in of beta amyloid, a protein that Communities (ARIC) study, prehypertension and smoking often accumulates in the brains funded by the NIH’s National increased the risk of dementia for of Alzheimer’s patients. This Heart, Lung and Blood both stroke-free participants and relationship was not affected Institute (NHLBI). by the presence of the APOE4 those who had a stroke. gene and not seen for risk From 1987-1989 factors present in later life. The Study participants, who were presence of vascular risk factors black or white and 45-64 years detected in participants older than 65 years • Blacks had a higher chance of dementia of age, underwent medical tests during their of age during the final examination was than whites. initial examinations at one of four centers not associated with greater levels of beta • Those who did not graduate from high in four different states. Over the next 25 amyloid. school were also at higher risk. years they were examined four more times. • Smoking cigarettes exclusively Cognitive tests of memory and thinking Dr. Gottesman and her team also plan increased the chances of dementia for were administered during all but the first to investigate ways in which subclinical, whites but not blacks. and third exams. or undiagnosed, vascular problems may influence the brain and why race is Further analysis strengthened the idea that Findings associated with dementia in future studies. the vascular risk factors identified in the • 1,516 participants were diagnosed study were linked to dementia. For instance, with dementia during an average of in order to answer the question of whether 25

MEDPAC ISSUES 2017 DATA BOOK ON MEDICARE UTILIZATION AND SPENDING TRENDS By Mimi Zhang, Policy and Research Associate, AMRPA

•

• This article presents select tables and summary findings from the data book of relevance to inpatient rehabilitation hospitals and units (IRFs) and other postacute care (PAC) providers. Post-Acute Care MedPAC’s observations: •

•

Most IRFs are distinct units in acute care hospitals with only about one-fifth of IRFs are freestanding

hospitals. However, because hospital-based units tend to have fewer beds, they account for only about half of Medicare discharges from IRFs. Home health agencies (HHAs) declined in 2016 after several years of substantial growth. The decline was concentrated in Texas and Florida, two states that have seen considerable growth since the implementation of the prospective payment system in October 2000. Despite a moratorium on new long-term care hospitals (LTCHs) beginning in October 2007, the number of these facilities continued to grow through 2011. The number of LTCHs has since decreased from 437 in 2011 to 427 in 2016. The total number of skilled nursing facilities (SNFs) has increased slightly since 2007, and the mix of facilities shifted from hospital-based to freestanding facilities. In 2015, hospital-based facilities made up 5 percent of all facilities, down from 8 percent in 2005. Increases in FFS spending on postacute care have slowed in part because of expanded enrollment in managed care under Medicare Advantage (Medicare Advantage

Chart 8-1: Number of post-acute care providers decreased slightly or remained stable in 2016 2009

2011

2013

2014

2015

2016

2009-2016 Average annual percent change

HHAs

10,961

12,026

12,613

12,461

12,346

12,313

2.2%

IRFs

1,196

1,165

1,161

1,177

1,182

1,188

-0.1

LTCHs

427

437

432

422

426

427

0.0

SNFs

15,062

15,120

15,163

15,173

15,223

15,263

0.2

is not included in this chart). The slowest growth in FFS spending on post-acute care occurred between 2012 and 2014. In 2015, Medicare’s combined spending on SNFs and HHs constituted almost 80 percent of total PAC spending. (SNF spending: 49 percent; HHA spending: 30.5 percent) Chart 8-2. Growth in Medicare’s fee-forservice post-acute care expenditures Chart 8-2. Growthsince in Medicare’s fee-for-service post-acute care has slowed 2012. expenditures has slowed since 2012

70 All post-acute care Skilled nursing facilities

56.0

Home health agencies Inpatient rehabilitation hospitals

50 Dollars (in billions)

he Medicare Payment Advisory Commission (MedPAC) recently published its annual compendium of Medicare utilization and payment information, “June 2017 Data Book: Health Care Spending and the Medicare Program.” The volume presents updated statistics on national health care and Medicare expenditures, beneficiary demographics, provider settings, multiple metrics of utilization rates, and providers’ Medicare profit margins, if applicable. Notably, the Commission recognized the slow growth of Medicare expenditures associated with the post-acute care providers over the past four years and attributes this partially to the growth of the Medicare Advantage program.

Long-term care hospitals 45.6

58.6

61.4

60.3 58.4 58.9 59.3

52.5 48.8

43.0

39.1

40 32.9 30

34.8 31.2

29.3

13.6

15.0 15.5

10.3 9.1 9.7 5.8 6.2 4.8

17.6 11.6 6.4

19.5

21.0

13.0 14.1 6.3

6.1

22.8 15.7

5.9

24.9

26.2

27.8

29.6 28.3 28.7 29.1

17.3

19.0 19.6 18.6 18.2 18.1 18.0 18.4

5.9

6.0

6.1

6.4

6.7

6.9

7.2

7.5

5.0 5.2 5.3 5.2 5.0 4.8 3.0 3.6 4.2 4.3 4.4 4.5 4.8 2.4 0 1.9 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calendar year Note:

•

These calendar year‒incurred data represent only program spending; they do not include beneficiary copayments.

FFS spending on IRFs declined from 2004 through 2008, reflecting payment policy changes during that • FFS spending on inpatient rehabilitation facilities declined between 2004 and 2008, period. However, spending on IRFs reflecting policies intended to ensure that patients who do not need this intensity of services are treated in less-intensive settings. However, spending on inpatient rehabilitation hospitals hassincesince increased, rising from $6.0 has increased 2008. • FFS spending on skilled nursing facilities increased sharply in 2011, reflecting CMS’s billion in 2008 to $7.5 billion in 2015. adjustment for the implementation of the new case-mix groups (resource utilization groups, version IV) beginning October 2010. Once CMS established that the adjustment it made large, it 2015, lowered the adjustment, and spending in 2012. • was tooIn about 43dropped percent of all Medicare FFS patients discharged 112 from an acute care hospital were discharged to PAC services (IRF, SNF, LTCH or HHA). The share of beneficiaries discharged to PAC increased about 6 percent between 2006 and 2015. 2015-2016 • About 5 percent of Percent beneficiaries are discharged change to hospital-level PAC in an -0.3% inpatient rehabilitation facility 0.5 (3.5 percent), long-term care hospital (1.2 percent) or inpatient 0.2 psychiatric facility (0.5 percent). 0.3 Source:

•

CMS Office of the Actuary 2017.

Increases in fee-for-service (FFS) spending on post-acute care have slowed in part because of expanded enrollment in managed care under Medicare Advantage (Medicare Advantage spending is not included in this chart). The slowest growth in FFS spending on post-acute care since 2001 occurred between 2012 and 2014. Spending grew about 2 percent between 2014 and 2015.

Post-acute care

AMRPA Magazine September 2017

Chart 6-18: Discharge destination of Medicare fee-for-service (FFS) beneficiaries, 2006-2015 Destination

2006

2014

2015

Percent change 2006 to 2015

52.3%

46.0%

–6.8%

Skilled nursing or swing bed

18.8

21.0

21.2

2.4

Home with organized home health care

13.8

16.8

16.9

3.1

Inpatient rehabilitation facility

3.4

3.8

3.9

0.5

Home self-care

Died in hospital

3.8

3.3

–0.5

Hospice

1.6

2.9

3.0

1.4

Transferred to other acute care hospital

2.5

2.2

2.1

–0.4

Other setting (e.g., ICF, nursing facility)

2.0

1.6

–0.4

Long-term care hospital

0.9

1.2

0.3

Left against medical advice

0.6

0.8

0.2

Inpatient psychiatric facility

0.4

0.5

0.4

0.0

•

• A growing proportion of patients are being discharged home with organized home health care, going from 13.8 percent in 2006 to 16.9 percent in 2015. MedPAC analyzes Medicare margins and uses them as a basis to recommend annual updates, or the lack thereof, for various sectors. It also examines the sectors’ strengths based on other metrics such as number of providers, beneficiary access to care, discharges, providers’ access to capital, quality of care, etc.

Inpatient Rehabilitation Providers •

The number of IRF FFS cases grew rapidly throughout the 1990s and the early years of the IRF prospective payment system, reaching a peak of about 465,000 in 2004. Medicare payments per IRF case rose, on average, 1.9 percent per year between 2008 and 2014. Average payment per case grew 2.6 percent between 2014 and 2015.

•

After CMS renewed its enforcement

Medicare margins of PAC providers, 2004-2015 2004

2006

2008

2010

2012

2014

2015

SNF

13.8%

12.8%

16.7%

19.4%

14.1%

12.7%

12.6%

IRF

16.7

12.4

9.3

8.7

11.1

12.5

13.9

HHA (freestanding)

15.4

19.4

14.4

10.8

15.6

LTCH

9.7

3.6

6.7

7.6

5.1

4.6

of the compliance threshold in 2004, IRF volume declined substantially. Between 2004 and 2008, the number of IRF cases fell almost 8 percent per year. From 2008 to 2014, IRF volume increased less than 1 percent per year on average. Between 2014 and 2015, volume growth picked up, rising 1.5 percent. Stroke patients were the most frequent diagnosis for IRF patients in 2015, accounting for 19.8 percent of all Medicare IRF admissions. The percentage of major joint replacements of the lower extremity as steadily decreased in the past decade. In 2004, major joint replacements were the most common IRF case and accounted for 24 percent of all admissions, compared to 6.8 percent in 2015. MedPAC notes that the number and share of neurological conditions has grown significantly over the past decade. Between 2004 and 2014, the number of neurological cases grew 98 percent, event as the total number of Medicare IRF cases declined 21 percent (data not shown). Between 2004 and 2015, as a share of IRF cases, other neurological conditions rose from 5.2 percent to 13.0 percent (2004 data not shown).

Quality of Care MedPAC and its contractor, the Urban Institute, have developed several measures to evaluate the quality of care in various settings, including SNFs and IRFs. Though some of MedPAC’s measures seem similar to those in CMS’ IRF or SNF Quality Reporting Programs with which PAC providers may be more familiar, such as discharge to community or readmissions, they differ in their technical details and therefore are not wholly aligned with CMS’s measures. For the tables below, please note that high rates of discharge to community indicate better quality whereas high readmission rates indicate poorer quality. •

MedPAC’s IRF rehospitalization rates count only stays readmitted to a hospital with the principal diagnosis of a potentially avoidable condition. These conditions include: respiratoryrelated illness (pneumonia, influenza, bronchitis, chronic obstructive pulmonary disease and asthma), sepsis, congestive heart failure, 27

Chart 8-12: Number of IRF FFS patients increased in 2015 2008

2013

2014

2015

2008-2014 Average annual percent change

2014-2015 Percent change

356,000

373,000

376,000

381,000

0.9%

1.5%

Cases per 10,000 FFS beneficiaries

100.4

99.1

99.3

101.0

-0.2

1.7

Payment per case

$16,646

$18,258

$18,632

$19,116

1.9

2.6

Average length of stay (days)

13.3

12.9

12.8

12.7

-0.6

-0.7

Number of IRF cases

•

fractures or fall with a major injury, urinary tract or kidney infection, blood pressure management, electrolyte imbalance, anticoagulant therapy complications, diabetesrelated complications, cellulitis or wound infection, pressure ulcer, medication error or adverse drug reaction, and delirium. Between 2011 and 2015, the average IRF risk-adjusted community discharge rate increased from 74.0 percent to 76.0 percent (higher rates are better). Similar to the IRF QRP Discharge to Community measure, MedPAC’s measure also does not give IRFs credit for discharging a Medicare beneficiary to the community if the beneficiary is subsequently readmitted to an acute care hospital within 30 days of the IRF discharge. MedPAC’s SNF readmission rates include only patients readmitted to a hospital with the principal diagnosis

Chart 8-13: Most common IRF cases in 2014 and 2015

The complete Data Book is available at www.medpac.gov.

Chart 5-3: IRFs improved on risk-adjusted rates of discharge to the community and potentially avoidable rehospitalizations from 2011 to 2015 Measure

2011

2012

2013

2014

2015

Potentially avoidable rehospitalizations during IRF stay

2.9%

2.6%

2.5%

2.4%

2014

2015

Potentially avoidable rehospitalizations 30 days after IRF discharge

5.0

4.6

4.5

4.2

19.5%

19.8%

Discharge to the community

74.0

75.2

75.8

76.2

76.0

Other neurological disorders

13.1

13.0

Discharged to a SNF 6.9 6.7 6.7 6.9 6.8 Source: MedPAC analysis of IRF Patient Assessment Instrument (IRF PAI) data from CMS.

Fracture of the lower extremity

12.2

11.5

Chart 5-1: SNFs improved on some quality measures but not others from 2011-2015

Debility

10.3

10.7

Brain injury

8.7

9.3

Other orthopedic conditions

7.7

7.9

Major joint replacement of lower extremity

7.8

Cardiac conditions

Stroke

•

of a potentially avoidable condition. The conditions are: congestive heart failure, electrolyte imbalance/ dehydration, respiratory infection, sepsis, urinary tract or kidney infection, hypoglycemia or diabetic complications, anticoagulant complications, fractures and musculoskeletal injuries, acute delirium, adverse drug reactions, cellulitis/wound infections, pressure ulcers, and abnormal blood pressure. The functional status measures were essentially unchanged between 2011 and 2015. The mobility measures are composites of the patients’ abilities in bed mobility, transfer and ambulation, and they reflect the likelihood that a patient will change, given his or her functional ability

at admission. A facility admitting patients with worse prognoses will have a lower expected rate of achieving these outcomes, and this difference will be reflected in the risk-adjusted rates. The rate of improvement in mobility shows the share of stays with improvement in one, two or three ADLs: bed mobility, transfer, and ambulation. The rate of no decline in mobility is the share of stays with no decline in any of the three ADLs.

Measure

2011

2012

2013

2014

2015

33.2%

35.6%

37.5%

37.6%

38.8%

Potentially avoidable rehospitalizations during SNF stay

12.4

11.4

11.1

10.8

10.4

6.8

Potentially avoidable rehospitalizations 30 days after SNF discharge

5.9

5.6

5.5

5.6

5.0

5.6

6.0

43.6

43.4

43.5

Spinal cord injury

4.6

4.7

Rate of improvement in one or more mobility ADLs

All other

10.6

10.5

Discharge to the community Potentially avoidable readmissions

Rate of no decline in mobility 87.2 87.3 87.2 87.1 87.1 Source: MedPAC analysis of Medicare claims and Minimum Data Set (MDS) data for 2011-2015. AMRPA Magazine September 2017

ROBOTIC ANKLE REHABILITATION IMPROVES POST-STROKE RECOVERY

troke patients with high function walking speed had the potential to return to normal walking speed after rehabilitation according to a recent study published in NeuroRehabilitation by Feinstein Institute for Medical Research scientist Bruce T. Volpe, MD, and Johanna L. Chang. Patients typically participate in rehabilitation programs that focus on specific enhanced motor activity of their limbs under the direction of a physical therapist (PT) and occupational therapist (OT). Isolated ankle training with a robotic therapy device could improve walking speed and balance after a stroke, depending on the severity of the patient’s initial impairment. Volpe’s study examined whether a robotic-assisted device that uses interactive ankle movement in a seated position would improve a patient’s walking speed and balance.

2. medium function (1 foot per second) 3. low function (less than 1 foot per second). Patients were seated in front of a video monitor and the ankle robot was attached at the knee and foot.

In a three month follow-up after the treatment, the high-function group continued to experience improvement (4.39 feet per second). The low-functioning group had the greatest change in improved balance.

The study states that having a better understanding of severity-dependent The patient viewed the video screen that recovery profiles after stroke would assist had a cursor and used their legs and ankle to medical professionals in determining the move the cursor to reach a particular target. best candidates for robotic rehabilitation. Robotic devices are effective tools to aid in this recovery of wrist and arm movement, however, the devices have been less effective in encouraging recovery of walking understanding who can most speed (also known as gait).

By benefit from robotic rehabilitation medical professionals can better tailor a program that will result in the highest benefit for patients.

Twenty-nine participants were treated three times a week for six weeks with robotassisted ankle training and were separated into three groups: 1. high function (walking speed greater than 3 feet per second),

Kevin J. Tracey, MD, President and CEO Feinstein Institute

Results After 18 sessions, the high- and mediumfunction groups demonstrated significant improvements in walking speed, with the high-function group achieving a speed that is considered normal for ambulating patients in the community (greater than 4 feet per second).

“Exercise is one of the main ways for patients who have had a stroke to regain movement,” said Chang, lead study author. “The use of robotic assisteddevices can enhance the therapy by increasing the intensity of the motor experience. This interactive robotic device moves the paralyzed arm or leg when the patient cannot and gets out of the way when the patient powers the movement. In our study, the baseline or initial walking speed prior to therapy was an important factor in predicting the final walking speed.”

HOSPITALS ARE NOT SUPPORTING PATIENTS WITH QUALITY INFORMATION ON SKILLED NURSING FACILITIES AT DISCHARGE, REPORT SAYS By Lovelyn M. Robinson, Research and Editorial Assistant, AMRPA

nder the Affordable Care Act (ACA), hospitals face financial penalties if their Medicare patients are readmitted following discharge. Thus, hospitals have an incentive to send patients who require skilled nursing care after discharge to higher-quality skilled nursing facilities (SNFs) where they are less likely to experience a hospital readmission. Patients or family members typically choose a SNF while being discharged from the hospital, but researchers know very little about how they select one or about the role that hospitals play in guiding patientsâ&#x20AC;&#x2122; choices. A recent study from the Commonwealth Fund examined how patients requiring skilled nursing services choose a SNF and

the role of hospital discharge planners and case managers in the selection process. The researchers interviewed 138 staff members at 16 hospitals and 25 SNFs across eight U.S. markets. They also interviewed 98 patients admitted to 14 of the nursing facilities in five of those markets. Because the researchers focused on discharge practices, they did not examine SNF quality outcomes such as readmission rates. Findings Patients were provided little information about nursing facilities. Hospital staff members typically provided patients with a list of names, addresses and telephone numbers of nearby facilities, but no information on the quality of care at each facility. Of 98 patients

interviewed, only four reported receiving any information about SNF quality. Only one discharge planner reported pointing patients of the Nursing Home Compare website, which provides information to aid consumers in choosing a SNF. Hospital staff members focus on respecting patientsâ&#x20AC;&#x2122; choice Hospital staff reported providing patients with lists of SNFs containing only minimal information because they believed that patient choice laws forbid them from influencing the selection process. This belief often stems from direct instructions that hospital executives and legal departments provide them. Hospital staff also noted that some SNFs attempted to market themselves to hospital staff members, creating a perceived conflict with CMS patient freedom of choice regulations.

AMRPA Magazine September 2017

patients on a weekly basis rather than a Patients typically select the nursing to the conditions of participation (CoP) monthly basis. facility closest to their home. to require hospitals to share quality Given the limited information they receive data on post-acute care providers with The report concluded that hospitals are about each nursing facility, patients tend patients. Alternatively, CMS could clarify not providing patients with the information to choose the closest option by default. its expectations regarding what hospitals they need to choose higher-performing However, three-quarters of the patients may do to aid patient choice. Adopting SNFs while patients are frustrated with interviewed said that they would have a less strict approach to patient choice, hospitals’ lack of guidance at discharge. been willing to travel farther if a better the authors argue, would allow patients facility had been recommended. Most to make better, more-informed choices patients did not receive any that would lead to improved SNF recommendation from the outcomes for patients and hospital, found the selection hospitals alike. process overwhelming, and Despite the fact that hospitals are would have appreciated See the Commonwealth Fund’s now held more accountable for more guidance in choosing a “In the Literature” http://www. nursing facility. commonwealthfund.org/~/ the care that patients received media/files/publications/inin the post-acute care settings, One ACO-affilated hospital the-literature/2017/aug/tyler_ hospital concerns about patient patients_not_given_quality_ provided patients with nursing_data_ha_08_2017_itl. informed choice. choice paradoxically may undermine Staff at one hospital, which pdf hospitals’ ability to respond to participates in an accountable that accountability. care organization (ACO), reported how they guide patients toward their hospital’s network of preferred SNFs. The authors note that although federal While this hopsital also provides patients statutes protect the right of Medicare with a list of all nearby facilities, it places patients to choose their own providers, high-quality facilities at the top of the the law does not prevent hospitals from list and color-codes them for easy helping patients make an informed identification. The hospital’s discharge choice. The authors recommended the planners noted that they prefer to send Centers for Medicare and Medicaid patients to SNFs with more supervision Services (CMS) adopt proposed changes where doctors and nurse practioners see

FY 2018 MEDICARE PROSPECTIVE PAYMENT SYSTEMS RULES STATUS *These dates reflect the dates of publication in the 2017 Federal Register*

Proposed Rule Hospital Inpatient PPS

April 28, 2017

Hospital Outpatient PPS

July 20, 2017

Inpatient Rehabilitation Facilities PPS

May 3, 2017

Home Health Agencies PPS

July 28, 2017

Long Term Care Hospitals PPS MS-LTC- DRG PPS

April 28, 2017

Skilled Nursing Facilities Psychiatric Hospitals PPS

May 4, 2017

Correction Notice

Final Rule August 18, 2017 August 3, 2017 August 18, 2017 August 4, 2017 August 7, 2017

Medicare Physician Fee Schedule July 21, 2017 Source: CMS Prospective Payment Systems - General Information website http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/index.html

INPATIENT REHABILITATION HAS SIGNIFICANT IMPROVEMENTS FOR MFS PATIENTS, STUDY FINDS

n observational pilot study, published in the Orphanet Journal of Rare Diseases, evaluated a newly designed rehabilitation program for Marfan syndrome (MFS) patients in order to confirm the efficacy and safety of the program, while analyzing its impact on the patient’s physical fitness and psychological wellness. The life expectancy of MFS patients can often be improved through vascular and cardiac surgery. Patients with congenital heart defects such as Marfan syndrome, an autosomal dominant genetic disorder of the connective tissue, are experiencing longer life expectancies due to new advances in medicine—resulting in a greater need for medical rehabilitation.

Adverse events included any new cardiac arrhythmias such as: •

atrial fibrillation

•

ventricular tachycardia

•

cardiac syncope

•

any complications located at the aorta

The medical examinations included assessment of maximum power in bicycle ergometry and all assessments were performed at the beginning and at the end of rehabilitation. At the end of the program, no adverse medical event was reported for any of the patients, physical fitness was improved, and psychological distress decreased. In addition, 16 of the

increase quality of life in MFS patients.” Due to the significant improvements in the quality life of MFS patients, the researchers encourage the development of similar programs for patients with other congenital heart defects in the future. Study Authors Dieter Benninghoven1,2, Denise Hamann3 Yskert von Kodolitsch3 Meike Rybczynski3, Julia Lechinger1 Friedrich Schroeder1 Marina Vogler4 and Eike Hoberg1

Muehlenberg-Clinic for Rehabilitation, Bad Malente-Gremsmühlen, Germany. Clinic of Psychosomatic Medicine and Psychotherapy, University of Luebeck, Lübeck, Germany. 3 Clinic of Cardiology at the University Heart Centre, The study consisted of A comprehensive and integrated University of Hamburg, three weeks of inpatient Hamburg, Germany. rehabilitation for MFS approach to rehabilitation is pivotal. 4 patients at the MuehlenbergMarfan Hilfe (Deutschland) Clinic for Rehabilitation e.V. (German Marfan Patient in Germany. Two groups, Organization), Eutin, Germany. of eight and 10 individuals, attended 18 MFS patients completed a one-year the program. The patients’ somatic, For the abstract and “Inpatient follow-up questionnaire and reported educative, psychological and social rehabilitation for adult patients with significant positive differences in rehabilitation goals were recorded and Marfan syndrome: an observational pilot psychological distress, somatization and used to formulate a rehabilitation plan, study” July 2017, Orphanet Journal of physical functioning. which incorporated various activities to Rare Diseases, please see https://ojrd. “It might be considered unrealistic to encourage patients to overcome their biomedcentral.com/track/pdf/10.1186/ expect participating in a three-week hesitancy to their own physical abilities. s13023-017-0679-0?site=ojrd. rehabilitation program to influence Group therapy and counseling for job biomedcentral.com quality of life for patients with MFS issues and for diet were also included in because quality of life is a broad the program. and comprehensive psychological construct,” the study states. Medically adverse events that occurred “Interestingly, our rather short threeduring the rehabilitation were registered. week program was, in fact, sufficient to

1,2

AMRPA Magazine September 2017

CMS FY 2018 IRF PPS RULE CONTAINS A FEW PLEASANT TWISTS

he Centers for Medicare and Medicaid Services (CMS) published the fiscal year (FY) 2018 inpatient rehabilitation facilities prospective payment system (IRF PPS) final rule one day earlier than was intimated to AMRPA by the Agency. And it was right on time in terms of giving the Medicare contractors the requisite 60 days’ notice to make any necessary adaptations based on changes in the rule. The rule was published in the August 3, 2017, edition of the Federal Register. The rule is remarkable in that in several areas the Agency was highly responsive to provider comments, including many of AMRPA’s recommendations. The changes may also be viewed as reflecting the philosophy of “less government is better” of the Trump administration. Either way, several of the changes from the proposed rule are welcome. Two areas in particular merit comment. First, the final rule adopts only those proposals pertaining to changes to the ICD-10-CM codes that will affirmatively count codes towards a provider’s compliance under the 60 percent rule utilizing the presumptive compliance methodology. The codes proposed to be dropped from being included in presumptive compliance, e.g., those that would decrease a provider’s compliance with the 60 percent rule, were not adopted. Inpatient rehabilitation hospitals and units (IRH/Us) have experienced serious problems since implementation of the ICD-10-CM code set in October 2015 with respect to the traumatic brain injury (TBI), hip fracture and major multiple trauma codes being ineligible for inclusion in the presumptive methodology utilized for 60 percent rule compliance. CMS will now include some of these etiologic diagnoses codes in counting towards presumptive compliance when applied under Impairment Group Categories (IGCs) for TBI, hip fractures and major multiple trauma. Second, CMS did not finalize its proposals to begin collecting standardized patient assessment data via new items in the IRF Patient Assessment Instrument (IRF PAI) beginning October 1, 2018. The proposed

rule included multiple standard patient assessment data items in keeping with the implementation requirements of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). If adopted, the IRF PAI would have expanded to 24 pages effective October 1, 2018. However CMS is adopting only items that are already included on the IRF PAI and is deferring discussion and adoption of the other numerous items originally proposed.

proposals for these categories no later than in the FY 2020 IRF PPS proposed rule. In the interim, the RAND Corporation and Abt Associates, CMS’ contractors, are pursuing the beta testing of various data items as part of the Standardized Patient

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However, CMS did not reply to comments received in response to its request for information pertaining to the 60 percent rule nor any of the comments it received from its broader Request for Information (RFI) on improvements to the Medicare program. The overall impact of the rule is estimated to be $75 million in increased payments to IRFs, or an estimated 0.9 percent increase, which is in accordance with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) update of 1 percent reduced by 0.1 percent to account for a change in the outlier threshold. The rule will apply to IRF discharges on or after October 1, 2017, and before September 30, 2018. I. IRF Quality Reporting Program A. Standardized Patient Assessment Data As noted above, in a significant departure from the proposed rule, CMS did not adopt the proposed new standardized patient assessment data elements under the IMPACT Act domains of Cognitive Function and Mental Status; Special Services, Treatments and Interventions; and Impairments, which constituted 20 data elements. The Agency agreed with stakeholders such as AMRPA, who commented that the new elements would have imposed a new and greater reporting burden on providers. Interestingly, CMS states that it could still meet its obligations to require standardized patient assessment data for these categories pursuant to the IMPACT Act, despite not adding them via this rule. The items, as proposed, would have added six pages to the IRF PAI. Instead, CMS states that it will make new

Mimi Zhang Policy and Research Associate, AMRPA

Carolyn C. Zollar, J.D Executive Vice President for Policy Development and Government Relations

Jonathan Gold J.D. Regulatory and Government Relations Counsel* 33

Assessment Project that will take place in 14 markets throughout the country for six months starting this November. A number of AMRPA members are participating. CMS did finalize its proposal to use currently reported data elements for the Application of Percent of Long-term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631) to satisfy the IMPACT Act’s required reporting domain of Functional Status. Similarly, CMS will use data being currently reported for the pressure ulcer measure to satisfy the required domain of Medical Conditions and Comorbidities. These policies do not introduce new reporting requirements in the IRF QRP. 1. Data Completion Threshold and Other Policies CMS finalized its proposal to extend other current IRF QRP policies to the reporting of standardized patient assessment data. These include the exceptions and extensions policies, the retention policy, and the process of using sub-regulatory process for non-substantive changes in data reporting requirements. CMS also adopted its proposal to apply the IRF QRP data completion threshold to the submission of standardized patient assessment data beginning with the FY 2019 IRF QRP. However, CMS deferred from specifying and finalizing a 95 percent data completion threshold (the current IRF QRP reporting threshold) for the reporting of standardized patient assessment data. Rather, CMS states that it is “mindful of the burden placed on providers in tracking the completion threshold” and that “its current policy… requires revision due to the growth of the [IRF Quality Reporting] program.” AMRPA had commented to CMS that the completion threshold in the IRF QRP sets a higher standard than the 80 percent threshold required in other post-acute care QRPs, and encouraged CMS to be mindful of the data completion threshold as it expands the IRF QRP to include patient assessment items in future years. B. Proposed Changes to Quality Measures 1. Replacing the Pressure Ulcer Measure (NQF #0678)

CMS finalized its proposal to replace the current pressure ulcer measure, “Percent of Residents or Patients with Pressure Ulcers That are New or Worsened (Short Stay) (NQF #0678)” with a modified pressure ulcer measure, “Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/ Injury.” The new measure would include new or worsened unstageable pressure ulcers, including deep tissue injuries (DTIs), in the measure numerator and will begin data collection October 1, 2018. CMS states that it will provide further training, education, and guidance prior to October 2018, as AMRPA recommended. 2. Removal of All-Cause Unplanned Readmission Measure CMS finalized its proposal to remove the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502) from the IRF QRP beginning with the FY 2019 IRF QRP. The measure will also be removed from public reporting by October 2018. AMRPA and other stakeholders commented to CMS that having three readmissions measures in the IRF QRP is duplicative, unnecessarily confusing and burdensome for providers to track and improve performance. CMS will retain all other measures in the IRF QRP. For a complete list of current measures, please see Table 7: Quality Measures Currently Adopted in the IRF QRP in the rule. 3. Future Considerations CMS will consider the comments it received regarding an IRF Experience of Care Survey, a patient-reported pain measure, and measures to assess the Transfer of Information as it considers potential measures for inclusion in the IRF QRP in future years. CMS states it will explore in future rulemakings methods to account for social risk factors in quality performance, such as measure stratification by social risk factors, and developing confidential feedback reports to providers on outcomes for individuals with social risk factors. The Agency also addressed stakeholder requests for patient-level data on claims-based measures, noting that it is exploring the feasibility of making additional data available to post-acute care providers.

C. Public Reporting CMS finalized its proposals to publicly report data on six (6) additional measures in CY 2018. Inpatient rehabilitation providers began reporting these measures on the IRF PAI on October 1, 2016 for IRF QRP purposes: • Application of Percent of Long-term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631) (assessment-based); • Application of Percent of Residents Experiencing One or More Falls with Major Injury (NQF #0674) (assessmentbased); • Medicare Spending Per BeneficiaryPAC IRF QRP (claims-based); • Discharge to Community-PAC IRF QRP (claims-based); • Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP (claims-based); and • Potentially Preventable Within Stay Readmission Measure for IRFs (claimsbased). CMS will also remove the current pressure ulcer measure, “Percent of Residents or Patients with Pressure Ulcers That are New or Worsened (Short Stay) (NQF #0678)”) from public reporting by October 2020, and replace it with the modified measure finalized in this rule, “Changes in Skin Integrity PostAcute Care: Pressure Ulcer/Injury.” II. Changes to the IRF Prospective Payment System A. Standard Payment Rate The final standard rate conversion factor for FY 2018 was $15,838, an increase from the FY 2017 standard payment rate conversion factor of $15,708. This amount is the result of a 1 percent MACRA adjustment, 1.0007 percent budget neutrality factor for the wage index and labor related share and a budget neutrality factor of 0.9976 percent for the revised CMG relative weights. CMS states that prior to the enactment section 411(b) of MACRA, the FY 2018 market basket would have been 2.6 percent. However, MACRA mandated that post-acute care providers’ increase factor for FY 2018, after the application of the productivity adjustment and other adjustments, must be 1.0 percent. AMRPA Magazine September 2017

B. Update to the CMG Weights, Lengths of Stay and Comorbidities CMS updated the Case Mix Group (CMG) weights using FY 2015 IRF cost report data and the FY 2016 IRF claims data as well as the average lengths of stay (ALOS) per CMG. The final rule estimates 99.3 percent of all IRF cases are in CMGs and tiers that would experience less than a five percent change in the CMG relative weight under their proposal. Table 1 provides the Relative Weights and Average Lengths of Stay Values for Case Mix Groups. CMS utilized the same methodology it has employed for at least the last three years. C. Labor Related Share and Area Wage Adjustments CMS finalized the FY 2018 labor related share of 70.7 percent as proposed, a slight decrease from 70.9 percent in FY 2017. CMS is relying on a 2015 bulletin from OMB titled OMB Bulletin No. 15–01, which was not used in the FY 2017 update. This bulletin will supersede the previous Core Based Statistical Area (CBSA) delineations, which will result in a minor change to IRF labor-related shares for providers in Garfield County, OK, the County of Bedford City, VA, and the City of Macon, GA. D. Outlier Threshold CMS finalized its proposal to update the outlier threshold amount from $7,984 for FY 2017 to $8,679 for FY 2018 to account for the increases in IRF PPS payments and estimated costs, and to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2018. The national cost-to-charge ratio ceiling is 1.31 for FY 2018; the ceiling for rural IRFs is 0.518 and 0.416 for urban IRFs. E. Changes to Facility Adjusters For FY 2018, CMS continues to freeze the LIP, rural, and teaching adjustments at the FY 2014 levels, which are: • LIP factor: 0.3177 • Rural adjustment: 14.9 percent • Teaching adjustment: 1.0163 CMS has moved to the final year of transitioning IRFs from rural to urban as a result of the previously updated CBSA delineations. Providers who became urban in FY 2016 will no longer receive any portion of the rural adjustment. About 20 IRFs will be affected by this change.

III. ICD-10-CM Presumptive Compliance Coding Changes For FY 2018, CMS made refinements to the ICD-10-CM lists used in determining providers’ presumptive compliance with the 60 percent rule. The codes are summarized in brief below. The complete lists of the adopted code revisions are available for download on the IRF Data Files website. CMS notes that the version of these finalized lists will constitute the baseline for any future updates to the presumptive methodology lists. The changes will be effective for discharges on or after October 1, 2017, and CMS refers to these changes as “Presumptive Compliance-3” in the code sets published on its website. As such, providers with compliance review periods straddling October 1, 2017, will have two sets of presumptive compliance codes applied to their compliance review, Presumptive Compliance-2 and Presumptive Compliance-3. AMRPA encourages members to closely monitor their presumptive compliance numbers and contact CMS if they believe the MAC’s presumptive compliance findings are incorrect. In line with AMRPA’s recommendations in response to the proposed rule, CMS adopted only those coding changes that will increase the number of cases counting toward presumptive compliance and did not adopt any changes that would remove codes from counting toward the presumptive compliance threshold. CMS also stated that since it is not making any negative changes, it would take into consideration the comments it received on the need for delayed effective dates should any of these negative changes occur in future rulemakings. CMS also adopted AMRPA’s proposal to publish code lists that specifically outline any changes in the presumptive compliance codes due to rulemaking. As such, the data files issued with the FY 2018 IRF PPS final rule include three lists that detail the added and deleted codes effective October 1, 2017, for presumptively compliant ICD-10CM codes, ICD-10 etiologic diagnoses that are excluded from under certain IGCs, and tiered comorbidities. A. Traumatic Brain Injury and Hip Fracture Codes The proposed rule addressed certain

ICD-10-CM diagnosis codes for patients with traumatic brain injury (TBI) and hip fracture conditions. CMS acknowledges that the ICD-10-CM translation from ICD9 inadvertently excluded and affected diagnoses codes listed in IGCs for TBI and hip fractures. In this rule, CMS finalized its proposals to include a number of these codes in counting toward presumptive compliance when they are used as etiologic diagnoses in the following IGCs effective for discharges on or after October 1, 2017: • Brain Dysfunction – IGC 2.21 Traumatic, Open Injury; • Brain Dysfunction – IGC 2.22 Traumatic, Closed Injury; • Orthopedic disorders – IGC 8.11 Status Post Unilateral Hip Fracture; and • Orthopedic disorders – IGC 8.12 Status Post Bilateral Hip Fracture. Notably, CMS did not adopt its proposals to remove the following four combination codes from presumptive compliance under IGCs 2.21 and 2.22, agreeing with stakeholders that these codes indicate serious injuries and are representative of conditions that satisfy the 60 percent rule. Thereby, it is allowing these codes to count toward the presumptive methodology: • S02.101B—Fracture of base of skull, right side, initial encounter for open fracture; • S02.102B—Fracture of base of skull, left side, initial encounter for open fracture; • S02.101A—Fracture of base of skull, right side, initial encounter for closed fracture; and • S02.102A—Fracture of base of skull, left side, initial encounter for closed fracture. CMS will however keep the following TBI and Fracture ICD-10-CM codes on the excluded list for presumptive methodology and hence these etiologic diagnoses would continue to not count toward presumptive compliance under certain IGCs: • S06.9X9A—Unspecified intracranial injury with loss of consciousness of unspecified duration, initial encounter as an excluded code under IGC 2.22; and • S72.009A, B, C — Fracture of unspecified park of neck of unspecified 35

femur as an excluded code under IGCs 8.11 and 8.12.

further consideration to the removal of unspecified codes.

Please see the CMS IRF PPS Data Files website for complete lists of ICD-10CM codes, IGC codes and exclusions, and tiered comorbidity codes used for presumptive compliance.

CMS also did not remove code G72.89 — Other Unspecified Myopathies from presumptive compliance as proposed. CMS states it will conduct focused medical reviews, conduct provider education, engage in further analysis of the use of G72.89 and may consider re-proposing its removal in the future. AMRPA expressed strong disagreement with CMS’ reasons for removing G72.89 in its comment letter submitted on the proposed rule.

B. Major Multiple Trauma Codes CMS also adopted their proposed changes to address major multiple trauma codes that did not translate exactly between ICD-9-CM and ICD-10-CM. Specifically, CMS will now count cases that contain two or more of the ICD-10-CM codes from the three major multiple trauma lists (in the specified code combinations). It also finalized its proposal to remove T07—Unspecified multiple injury from presumptive compliance. In order for patients with multiple fractures to qualify as meeting the 60 percent rule requirement for IRFs under the presumptive methodology, codes from the following lists could be used if combined whereby (a) at least one lower extremity fracture is combined with an upper extremity fracture and/or rib/sternum fracture or b) fractures are present in both lower extremities: • List A: Major Multiple Trauma—Lower Extremity Fracture • List B: Major Multiple Trauma—Upper Extremity Fracture • List C: Major Multiple Trauma—Ribs and Sternum Fracture C. Unspecified and Arthritis Codes In the proposed rule, CMS undertook a review of ICD-10-CM codes that contained “unspecified” descriptors and proposed to remove them from the presumptive compliance list for failing to be sufficiently specific in describing a condition that falls under the 60 Percent rule. In its comments to CMS, AMRPA argued against this approach, stating that IRFs’ position as a post-acute provider may leave it without sufficient information to code the details of an initial injury more specifically, and that unspecified coding oftentimes has no bearing on a patient’s functional status and suitability for an IRF setting. CMS decided not to finalize its proposal to remove unspecified codes, and says it will take a “more cautious approach” and give

Similar to its reasoning for unspecified codes, CMS will not finalize its proposal to remove arthritis codes from the presumptive compliance methodology list. CMS again stated it is taking a more cautious approach and will continue to evaluate these codes. D. Sub-regulatory Process for Changes to the Code Lists CMS finalized its proposal for a formal, subregulatory process for updating the code lists used for the presumptive compliance methodology to account for changes to the ICD-10-CM medical code data set, or to alert providers to the effects of these changes on the presumptive methodology code lists. In finalizing this proposal, CMS will now address non-substantive updates to the ICD-10-CM codes on the lists through a sub-regulatory process. Substantive revisions to the code lists, such as adding or removing presumptively compliant codes borne out of what CMS refers to as “policy judgments,” would continue to be addressed only through notice and comment rulemaking. Based on conversations with CMS, as of now the sub-regulatory changes will be made close to the time of publication of the final rule, e.g., mid-July to early August. AMRPA suggested to CMS that it issue a notice when the changes are posted to the CMS website so that providers will be aware of them. In the code lists published with the final rule, CMS indicates whether the changes are policy changes or subregulatory changes to conform to the ICD10-CM code set.

for providers and for the agency. In this rule, CMS states that it received largely supportive comments on these proposals, and finalized the following effective for discharges on or after October 1, 2017: 1. Remove the 25 percent payment penalty for late submissions of the IRF PAI; 2. Remove the voluntary swallowing assessment item on the IRF PAI, which is Item 27; and 3. Use the height/weight items on the IRF PAI (items 25A and 26A) to determine patients’ BMI greater than 50 percent for cases of lower extremity single joint replacement. V. Addressing Comments on IRF Classification Criteria CMS sought stakeholder input on the 60 percent rule, including but not limited to, the list of 13 conditions used to evaluate 60 percent rule compliance. CMS stated the purpose is “to assist the agency in generating ideas and information for analyzing refinements and updates to the criteria used to classify facilities for payment under the IRF PPS.” While CMS summarized the feedback submitted by stakeholders, it did not make any changes and stated “we appreciate the commenters’ suggestions and will carefully consider these suggestion as we explore ways to modernize the Medicare program.” VI. Request for Information CMS also included a Request for Information (RFI) for continuing feedback on the Medicare Program. It sought input on potential regulatory, sub-regulatory, policy, practice and procedural changes to make the delivery system less bureaucratic and complex, reduce burden for clinicians and providers, and increase quality of care while decreasing cost. CMS said it would not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future subregulatory guidance. Hence there was no response in the final rule. *Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

IV. Other Policy Changes CMS proposed several changes for the purposes of eliminating redundancies and simplifying administrative burden AMRPA Magazine September 2017

PROPOSED RULE FOR PHYSICIAN FEE SCHEDULE INCLUDES UPDATES TO THERAPY CODES, REQUEST FOR INFORMATION By Jonathan M. Gold, JD, Regulatory and Government Relations Counsel*, AMRPA

n July 21, the Centers for Medicare and Medicaid Services (CMS) published proposed updates to the Physician Fee Schedule (PFS) for calendar year (CY) 2018 in the Federal Register. The PFS is continuing to undergo a number of transitions since the Medicare and CHIP Reauthorization Act of 2015 (MACRA) created the Quality Payment Program (QPP), which replaces many of the quality- and value-based aspects of the Physician Fee Schedule. AMRPA’s Outpatient and Therapies Committee has developed formal comments on the proposal that it will be submitting to CMS. Request for Information Similar to other proposed rules and part of the new Administration’s commitment to increasing regulatory flexibilities and efficiencies, CMS released a Request for Information (RFI) as part of this year’s proposed rule. CMS states it is seeking ways to better achieve transparency, flexibility, program simplification and innovation. More specifically, CMS says it is soliciting ideas for regulatory, sub-regulatory, policy, practice and procedural changes that could include payment system redesign, elimination or streamlining of reporting, monitoring and documentation requirements, operational flexibility and other methods to support the doctor-patient relationship and facilitate patient-centered care. CMS states it will not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future subregulatory guidance. A similar RFI was issued as part of the Inpatient Rehabilitation Facilities Prospective Payment System (IRF

PPS) proposed rule for fiscal year 2018 and AMRPA submitted extensive comments in response to that RFI. Valuations of Newly Created and Revised Codes The statute governing the PFS requires CMS to establish payment rates under the PFS based on national uniform relative value units (RVUs). These RVUs account for the relative resources used in furnishing a service for each type of specialty clinician and service. The RVUs are divided in to three categories: Work, practice expense (PE) and malpractice expense (MP). The Work RVU aims to reflect clinician time and intensity for the services provided. The PE RVUs represent other necessary resources, such as staff, equipment, office cost and other expenses involved in furnishing PFS services. The MP RVUs reflects the cost of commercial and physician-owned insurers’ malpractice insurance premiums. CMS consults multiple professional organizations as well as seeks public comments when determining RVU values. These professional organizations include the American Medical Association Specialty Society Relative Value Scale Update Committee (RUC), the Health Care Professionals Advisory Committee (HCPAC), and the Medicare Payment Advisory Commission (MedPAC). After identifying several therapy Current Procedural Terminology codes (CPT codes) as misvalued last year, CMS is now proposing to alter the value of some of these codes. CPT codes 97112 (neuromuscular reeducation), 97113 (aquatic therapy), 97116 (gait training), 97533 (sensory integrative techniques), 97537 (community/ work reintegration training), and 97542

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Prosthetics, Cognitive Intervention and Other Codes Have Updated Values Agency Expanding Medicare Diabetes Prevention Program

(wheelchair management) may all see an increase due to a proposed update to their work RVU values. Due to the deletion and creation of codes, there are also proposed value updates to some orthotics and prosthetics codes. The CPT editorial board has now defined 97760 (orthotic management and training, including assessment and fitting) and 97761 (prosthetic training) to be used only to report initial encounters, whereas previously it was used to describe both initial and subsequent encounters. The board has created a new code, 977X1, which should be used for any subsequent encounter pertaining to orthotics or prosthetics. It has deleted 97762, which was used for assessment and fittings for orthotics or prosthetics when the code was not bundled in with another billed code or service. Due to these changes, 97760 and 97761 have slight increases proposed, and newly created 977X1 has a proposed value of 1.66 (which is multiplied by the proposed standard conversion factor of $35.89 to determine payment). By comparison, the now deleted 97762 had a value of 1.36. CMS also proposes some changes in value to codes pertaining to Cognitive Function Intervention. CPT code 97532 (cognitive skills development) is scheduled to be deleted for CY 2018 and replaced by CPT code 97X11. A 37

major difference is that 97532 is reported per 15 minutes, and the new code will only be reported per session. Claims data indicate that CPT code 97532 was most often billed in four units, but the HCPAC recommended a work RVU of 1.50 for CPT code 97X11, which is only 3.4 times greater than the work RVU for the predecessor code (0.44). Since this may create a reduction in payments for many providers, CMS is proposing to maintain the current coding and valuation for 97532 by creating a new a G-Code, GXXX1, which would maintain the descriptor and values from existing CPT code 97532. Under this proposal, new CPT code 97X11 would be given a procedure status of ‘‘I’’ (Invalid for Medicare). Finally, the CPT editorial board is deleting two codes in the family of compression strapping: CPT codes 29582 (application of multi-layer compression system; thigh and leg, including ankle and foot) and 29583 (application of multi-layer compression system; upper arm and forearm). Therefore, CMS is reevaluating remaining codes in this family, 29580 (strapping; Unna boot) and 29581 (application of multi-layer compression system; leg, including ankle and foot). Due to the various changes proposed to the RVUs for 29580, the nonfacility rate will see an increase from 1.49 to 1.74, while the facility rate for this code will see a decrease from 1.02 to .83. For 29581, both the facility and non-facility rates will see moderate increases under this proposal. 38

MACRA Patient Relationship Codes As part of its larger quality and data collection efforts, MACRA seeks to facilitate the attribution of patients and episodes to one or more clinicians, and required the development of patient relationship categories and codes that define the relationship between a clinician and a patient at the time of furnishing a service. Originally, CMS had proposed that the use of these codes would be mandatory beginning in 2018. However, in this proposed rule, CMS is proposing to make the use of the codes voluntary until further notice. While the use of the relationship codes will be voluntary for the time being, CMS is still seeking comment on how to best develop the coding process for future use. CMS has previously proposed five categories to include in this effort, and is now also proposing HCPCS code modifiers that will be used in claims. The proposed code modifiers are: 1. Proposed HCPCS modifier X1: Continuous/broad services. For reporting services by clinicians who provide the principal care for a patient, with no planned endpoint of the relationship. 2. Proposed HCPCS modifier X2: Continuous/focused services. For reporting services by clinicians whose expertise is needed for the ongoing management of a chronic disease or a condition that needs to be managed

and followed for a long time. 3. Proposed HCPCS modifier X3: Episodic/broad services. For reporting services by clinicians who have broad responsibility for the comprehensive needs of the patients, that is limited to a defined period and circumstance, such as a hospitalization. 4. Proposed HCPCS modifier X4: Episodic/focused services. For reporting services by specialty focused clinicians who provide time-limited care. 5. Proposed HCPCS modifier X5: Only as ordered by another clinician. For reporting services by a clinician who furnishes care to the patient only as ordered by another clinician. Evaluation and Management (E/M) Visit Codes CMS introduced new evaluation and reevaluation codes for therapy disciplines starting in CY 2017, and now CMS is seeking comment from stakeholders on specific changes it should undertake to continue to update the E/M codes. CMS specifically requests feedback on how the agency could relax guidelines to reduce clinical burden and better align E/M coding and documentation with the current practice of medicine. CMS is initially seeking comment on how it might focus on initial changes to the guidelines for history and exam documentation, because the agency believes requirements for these elements are particularly outdated. CMS states it AMRPA Magazine September 2017

believes medical decision-making (MDM) guidelines may also need to be updated, but in the nearer term it may most feasible to edit documentation requirements pertaining to the details of history and physical exam, and allow MDM and/or time to serve as the key determinant of E/M visit level. Telehealth and Remote Patient Monitoring Codes CMS is proposing to add several codes to the list of permitted telehealth services. The full list can be found beginning on page 33972 of the proposed rule. CMS specifically mentions a list of physical and occupational therapy codes that they will not be adding to the list of telehealth codes. The Agency states they are not adding these codes because therapist were not among the statutorily prescribed provider types that are permitted to provide telehealth services. CMS also cites the fact that many of these codes require direct physical manipulation of a patient. However, two codes of note that CMS is proposing to include are HCPCS code G0506 (comprehensive assessment of and care planning for patients requiring chronic care management and CPT code

90785 (interactive complexity). In addition to new codes, CMS seeks comments on ways it could further expand the use of telehealth services and the use of remote patient monitoring. For remote patient monitoring, CMS seeks comment on how the services should be valued, since some chronic care management and other codes already presume some patient monitoring functions. SNF “Three-Day Stay” Waiver Last year, CMS proposed to allow for relaxation of the requirement that beneficiaries must have had a qualifying three-day inpatient hospital stay to be admitted to a skilled nursing facility (SNF) for those patients being treated as part of an accountable care organization (ACO). This year, CMS seeks comment on proposals to reduce the application burden for submitting applications for use of the SNF waiver. Specifically, CMS is proposing to remove the requirement that ACOs submit a narrative describing any financial relationships that exist between the ACO, SNF affiliate and acute care hospitals. CMS also proposes to remove the requirement that waiver applicants submit documentation demonstrating that each

SNF affiliate on their SNF affiliate list has an overall rating of three or higher under the CMS 5-Star Quality Rating System. Medicare Diabetes Prevention Program The proposed rule also lays out plans for expansion of the Medicare Diabetes Prevention Program (MDPP) expanded model. CMS proposes expansion in 2018, and the proposals outline the payment and enrollment structure for the expanded program. CMS proposes a bifurcated system that would pay provider equally for the initial program, but then pay a higher rate to providers treating patients who had lost higher percentages of body weight and maintained the loss. CMS also notes they will only allow limited use of virtual sessions for the current program, but plan to test a separate model under CMS innovation center authority to evaluate MDPP services that are exclusively furnished virtually. *Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

INPATIENT PROSPECTIVE PAYMENT SYSTEM AND LONG-TERM CARE HOSPITAL PAYMENT POLICIES FINALIZED FOR FY 2018 By Jonathan M. Gold, JD, Regulatory and Government Relations Counsel*, AMRPA

n August 14, the Federal Register published the final rule for the Inpatient Prospective Payment System (IPPS) and the Longterm Care Hospital Prospective Payment System (LTCH PPS) for Fiscal Year (FY) 2018. The final rule is adopting a number of significant changes proposed in the rulemaking, including suspension of the 25 percent rule for LTCHs, loosening of Hospital-Within-Hospital (HwH) rules, and payment increases.

Inpatient Prospective Payment System (IPPS) CMS estimates that general, acute care hospitals will see operating expense payments increase approximately 1.2 percent if they successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and the meaningful use program for electronic health records (EHR). This increase will be the result of a hospital market basket update of 2.7 percent, which is then adjusted by a productivity adjustment,

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CMS Finalizes Proposals to Suspend 25 Percent Rule for LTCHs Some Hospitals Within-Hospital Rules Loosened

several adjustments required by recent legislation, and an adjustment due to the offsets as a result of the two-midnight policy. 39

CMS projects that when you also take in to account changes in uncompensated care costs, estimates of penalties for readmissions, and adjustments due to the Hospital Value-Based Purchasing (VBP) program, the agency will actually end up paying out 1.3 percent more than last year. This 1.3 percent increase would be about $2.4 billion more in FY 2018 than in FY 2017. Hospital Inpatient Quality Reporting (IQR) Program CMS finalized several components of its proposals regarding the IQR program. Specifically, CMS is finalizing an update to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measure by replacing the three existing questions about pain management with three new questions that address communication about pain during the hospital stay. In addition, CMS is finalizing an update to the stroke mortality measure to include the use of NIH Stroke Scale claims data for risk adjustment. CMS is also adopting the Hospital-Wide AllCause Unplanned Readmission Hybrid Measure as a voluntary measure for the CY 2018 reporting period. Further, CMS is finalizing that hospitals will be required to select and submit four of the available Electronic Clinical Quality Measures (eCQMs) included in the Hospital IQR Program measure set and provide one self-selected, calendar year quarter of data. CMS is also modifying the eCQM certification requirements such that for the CY 2018 reporting period hospitals will be able to use: (1) the 2014 edition of CEHRT, (2) the 2015 edition of CEHRT, or (3) a combination of both the 2014 and 2015 editions of CEHRT. Long-term Care Hospital Prospective Payment System In this final rule, CMS is updating the LTCH

PPS standard Federal payment rate by one percent, which was mandated by the Medicare and CHIP Reauthorization Act of 2015 (MACRA). Although the standard rate will go up one percent, CMS projects that overall LTCH PPS payments will decrease by approximately 2.4 percent, or $110 million in FY 2018, which is due in large part to the continued phase in of the dual payment rate system, which sets some site-neutral payment rates for certain services. Notably, CMS is finalizing its proposal to implement a regulatory moratorium on the implementation of the 25 percent threshold policy for FY 2018 while it conducts further evaluation of the rule. The 25 percent rule, which had been statutorily suspended until this summer, restricts patient referrals from any one referring hospital to no more than 25 percent of a LTCHs patients, and reduces payment for any patients above that threshold. CMS says it will continue to evaluate the policy. Long-term Care Hospital Quality Reporting Program (LTCH QRP) CMS also updated elements of the LTCH Quality Reporting Program (LTCH QRP). In this final rule, it is adopting two new measures (one process and one outcome) related to ventilator weaning and revising the current pressure ulcer measure. CMS is also defining certain standardized patient assessment data that LTCHs must report to comply with the program according to the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). Specifically, CMS is finalizing that beginning with the FY 2019 LTCH QRP, the data that LTCHs report on the measure Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) meet the definition of standardized patient assessment data.

Also beginning with the FY 2020 LTCH QRP, the data that LTCHs report on the measures Changes to Skin Integrity PostAcute Care: Pressure Ulcer/Injury and Application of Percent of Long-term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631) both meet the definition of standardized patient assessment data. CMS had proposed a number of other standardized assessment data items to adopt in the proposed rule, but declined to finalize all but the ones mentioned above. Hospital-Within-Hospital (HwH) Rules Finally, CMS is finalizing its proposed changes to the HwH rules pertaining to hospitals that are co-located with one another. Previously, any HwH had to satisfy a number of requirements demonstrating separateness and control, as defined by the regulations, in order to maintain its status as a separate hospital. CMS stated it believes that in the case of IPPS-excluded hospitals co-locating with one another, such as LTCHs and IRFs, the creation of a separate PPS for these hospitals have mitigated a lot of the concerns in which this rule was intended to address. Therefore, only IPPS-excluded hospitals co-located with an IPPS hospital (such as an IRF co-locating with an IPPS hospital) will need to continue to meet the separateness requirements under the current regulations. Two or more excluded hospitals co-locating only with other, excluded hospitals, such as an IRF and an LTCH, will no longer need to meet these requirements, so long as an IPPS facility is not a part of co-location. *Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

AMRPA Magazine September 2017

AMRPA ISSUES STATEMENT TO COMMITTEE RECORD OF THE OVERSIGHT SUBCOMMITTEE HEARING ON EFFORTS TO COMBAT WASTE, FRAUD AND ABUSE IN THE MEDICARE PROGRAM July 19, 2017 Testimony of the American Medical Rehabilitation Providers Association (AMRPA) To the Ways and Means Committee Oversight Subcommittee Hearing on “Efforts to Combat Waste, Fraud and Abuse in the Medicare Program”

he American Medical Rehabilitation Providers Association (AMRPA) thanks Chairman Buchanan, Ranking Member Lewis, and Members of the Oversight Subcommittee for holding this hearing to examine efforts to combat waste, fraud and abuse in the Medicare program. AMRPA is the national trade association representing more than 500 freestanding inpatient rehabilitation hospitals and units of general hospitals (IRFs), outpatient rehabilitation service providers, and other medical rehabilitation providers working with more than 600,000 patients each year to maximize their health, functional skills, independence and participation in society. AMRPA supports the Committee’s efforts to ensure that the Centers for Medicare and Medicaid Services (CMS) preserve the integrity of the Medicare program by paying accurate and appropriate amounts to providers. The proper management of Medicare funds and payment of claims is central to ensuring rehabilitation providers’ ability to serve seniors and persons with disabilities. We look forward to working with the Committee on policies that reduce payment errors, preserve program resources and promote access to medically necessary, quality rehabilitative care. As Chairman Buchanan noted in his opening statement, the overall Medicare payment error rate yields little information about the program’s integrity. Many payment errors are attributable to faulty or incomplete documentation and therefore it is difficult to determine whether they represent a loss to the Medicare trust fund or, in his words, simply “typographical errors.” AMRPA agrees with the Chairman that different types of payment errors require different solutions. To that end, our testimony summarizes the reasons which may underlie IRF payment errors and offers solutions to reduce error rates and alleviate provider burdens that threaten beneficiaries’ access to care.

IRF Payment Error Rates Result from a “Perfect Storm” of Overly Burdensome Documentation Requirements and Overzealous Contractors Jonathan Morse, acting director of CMS’ Center for Program Integrity, testified that improper payments most often occur where there is insufficient documentation to determine whether an item or service was medically necessary. Although Director Morse acknowledged that an “improper payment” is not necessarily – or typically – fraudulent, he stated that improper payments for IRF and home health claims were “the largest contributors to the 2016 Medicare FFS improper payment rate.” However, Director Morse did not discuss the data underlying this statement or seek to explain to the Committee why increasing numbers of IRFs are finding it difficult to meet CMS’ extensive documentation requirements. A review of the HHS FY2016 Agency Financial Report is instructive. From FY 2015 to FY 2016, the improper payment rate for freestanding IRFs increased from 55.7 to 73.2 percent, while the rate for hospital-based units grew from 34.4 to 53 percent. In FY 2016, 99.7 percent of improper payments to freestanding IRFs resulted from missing or insufficient medical necessity documentation, versus 87.2 percent in FY 2015. For IRF units, improper payments based on lack of medical necessity documentation increased from 51.6 to 83.7 percent. According to HHS’ findings, the overall IRF improper payment rates increased 37 percent from 2015 to 2016 and improper payments to IRF units based on medical necessity has apparently increased by a dramatic 62 percent in a single year. However, it defies logic that such significant changes could be due to providers, which are unrelated and geographically diverse due to the CERT sampling process, engaging in the same new pattern of behavior. As noted in the HHS report, the CERT program ensures a statistically valid random sample; therefore, the improper payment rate calculated from that sample reflects all Medicare FFS payments over the report period. Because the CERT sample includes different, random groups of providers from year to year, we think HHS’ findings are more reflective of changes in the CERT review criteria or processes rather than actual shifting provider behavior. Contractor behavior may also contribute to increases in rates of “improper payments” as their coverage criteria and corresponding documentation requirements changes over time as well, even where there is 41

no underlying change in the regulations or CMS’ subregulatory guidance, such as the Medicare Benefit Policy Manual (MBPM). Thus, the more rational — and factually based — explanation is that rising IRF improper payment rates and claim denials have been driven by providers’ inability to satisfy increasingly burdensome documentation requirements, coupled with contractor audit procedures that are designed to penalize providers for even the most minor documentation errors. In many instances contractors apply overly subjective interpretations of vague policies governing IRF services, including where no regulation exists. The intensive therapy requirement (also known as the “Three-Hour Rule”) in the regulations is a prime example. CMS has repeatedly stated that the “preponderance” of therapy and rehabilitation services received by IRF patients must be delivered in a “one-onone” modality, i.e., a single therapist working with the patient. For example, contractors will often deny IRF claims for failure to satisfy the Three-Hour Rule when in excess of 80 percent of a patient’s therapy is individualized. Current IRF medical necessity requirements are heavily document-laden and lend themselves to easy, accounting-style audits based on technical noncompliance. As a result, legitimate, medically necessary rehabilitative care is not recognized and is instead categorized as an “improper payment.” The problem is exacerbated by the fact that many contractors responsible for reviewing IRF claims are paid on a contingency fee basis – the higher the denial rate, the higher their fees. Additionally, beyond returning the contingency fee itself, there are no financial penalties for contractors incorrectly denying payment. Together, these factors converge to create a “perfect storm” in which IRFs are found to have improper payment rates of up to 73 percent. While AMRPA shares the Committee’s goal of combatting waste, fraud and abuse in the Medicare program, the vast majority of claim denials our members experience are related to technical violations of subregulatory coverage policies. For example, one of our members recently experienced claim denials for each of the following reasons during a contractor payment review: •

Pre-admission physician examination did not indicate the prior level of function — even though the prior level of function is documented elsewhere in the medical record;

•

The Individualized Plan of Care (IPOC) was not completed within four days;

•

No physician signature on pre-admission review or the signature is outside the 48-hour window or was done with an electronic medical record (EMR) that somehow does not meet CMS’ requirements; and

•

The interdisciplinary team conference was missing documentation from one team member (e.g., case manager, therapist, etc., such as a signature on the team note).

In addition, contractors often go beyond the policies outlined in CMS coverage manuals to impose even stricter requirements on IRFs. For example, despite contrary assurances from CMS, contractors have misconstrued 42 C.F.R. § 412.622 to impose an absolute requirement that each document identified in regulation 42

be completed exactly as specified, including rigid timelines for each, and thus denied coverage when the patient’s medical record clearly demonstrates medical necessity. In so doing, they far exceed the scope of their authority. These overly restrictive interpretations of coverage policies result in claim denials for medically necessary and appropriate rehabilitative care, harming both patients and IRF providers. Moreover, the preadmission documentation requirements in CMS coverage manuals have themselves been found to exceed the scope of agency regulations. In Cumberland County Hospital System v. Price, a U.S. District Court recently held that the preadmission requirements for IRFs set forth in the MBPM are far more detailed and impose significantly greater documentation burdens on providers than those set forth in the corresponding CMS regulations. The court noted that The list of criteria in the MBPM does not merely clarify or interpret the requirements in the regulation, but creates a new standard by specifying particular items of information not provided for in the regulation. Significantly, these criteria are not simply precatory. Rather, the MBPM states that they are mandatory. It provides that the preadmission screening documentation “must indicate” certain matters and “must also include” the remaining matters specified. MBPM ch. 1 § 110.1.1. In the face of these increasingly detailed and more restrictively interpreted requirements, it is no surprise that the improper payment rate for IRFs is increasing. Further, the current Medicare appeals process offers little hope of any timely resolution of disputes over disallowed “improper” claims. The average processing time for appeals at the Office of Medicare Hearings and Appeals (OMHA) is now 1,057 days (over three years!), despite statutory requirements that redetermination appeals be completed within 60 days and administrative law judge (ALJ) and Medicare Appeals Council (MAC) decisions be rendered within 90 days. Many of AMRPA’s members have been waiting three to four years even for a hearing before an ALJ, without access to the funds in controversy. However, once they reach this level of appeal, IRFs are successful in getting the substantial majority of denials overturned. A data collection effort by the IRF stakeholders, representing 22 percent of the industry, found a statistic of Overturn Rate In Favor of Providers (in Dollars) of 86.8 percent, and an Overturn Rate in Favor of Providers (in Number of Cases) of 80.2 percent. This combination of overzealous contractors and a hopelessly backlogged appeals system has resulted in an oversight system that diminishes patient access, rather than maximizing it. As IRFs have payments withheld at higher rates due to technical denials, they must put funds in reserve to offset the withholdings until an appeal can be processed years later. Further, they must dedicate resources to complying with documentation requests and filing appeals with their contractors. This puts a strain on IRF funds that would otherwise be used to provide intensive rehabilitation services to Medicare beneficiaries. This trend is untenable and underscores the need for legislative action to address the issue AMRPA Magazine September 2017

of unduly burdensome audits and the resulting explosion in the number of Medicare appeals. Proposals to Reduce IRF Payment Error Rates and Alleviate Provider Burdens That Threaten Access to Medically Necessary Rehabilitative Care Reining in the most arbitrary documentation requirements on which auditors rely to deny claims would, over time, substantially reduce the strain that Medicare claims appeals are placing on our administrative law system, judicial system and taxpayers. These types of reforms, such as limiting technical denials, would not result in Medicare paying for medically unnecessary care. Contractors should be prohibited from using isolated documentation or minor technical irregularities as the principal basis for denying payment for medically necessary services. This proposed change would prevent claims from being denied for perfunctory reasons such as failing to check a box on a form or documenting the post-admission one or a few hours late, unless they are systematic or can otherwise be shown to impact patient care. To prevent contractors from engaging in abusive auditing practices, AMRPA urges Congress to amend section 1893(h) of the Social Security Act to eliminate the contingency fee structure for Recovery Audit Contractors (RACs). As noted above, this structure incentivizes inappropriate contractor behavior, such as opportunistic audits focused on minor technical flaws that deny payment for medically necessary care without regard to the actual appropriateness of the care provided or any evidence of improper intent or fraud. In addition, Medicare contractors should be barred from conducting payment reviews based solely on statistical analyses when a provider demonstrates why its caseload is at variance with the applicable regional or national analyses. In recent years, Medicare contractors have increasingly audited cases citing statistical analysis as their rationale. For example, the contractor’s letter may state that documents are requested because the provider exceeds the regional average for the particular types of cases audited, such a stroke. In reality, the multitude of factors that influence individualized post-acute care placement decisions are not conducive to an oversimplified and overgeneralized audit-bynumber approach. Such statistical analyses merely demonstrate variation from a mean, not improper practices. Audits on this basis alone are therefore harassing, unwarranted, and add to the overall burden of a flawed recovery audit program.

Finally, to address the issue of excessive appeal wait times, AMRPA recommends that Congress enact legislation, such as the Audit & Appeal Fairness, Integrity and Reforms in Medicare (AFIRM) Act, that would: •

provide additional resources for OMHA and the Departmental Appeals Board to increase the volume of adjudications and decrease processing times;

•

penalize inaccurate contractors by reducing their ability to request additional documentation from providers;

•

provide a one-year exemption from post-payment review of claims to providers that achieve a low rate of claims denials over a two-year period;

•

establish a method to exempt compliant providers from audits; and

•

reestablish the use of clinical inference and judgment by requiring claims reviews to be conducted or approved by physicians.

In addition, Congress should consider including in such legislation provisions that penalize contractors with high rates of denials overturned on appeal by subjecting them to reductions in their fees where there is a repeated pattern of overturned claims denials. While these recommendations are not exhaustive, not only would these reforms help to address Medicare’s broken claim review and audit system, and the years-long appellate backlog that has resulted, but they are in line with broader initiatives of this Committee to cut through red tape, simplify regulations and ultimately help make delivering health care to Medicare beneficiaries more efficient, clinically driven, and patient-centric. *

In closing, AMRPA thanks and commends the Committee for its efforts to eliminate fraud, waste and abuse in the Medicare program. We appreciate the opportunity to provide testimony for the hearing record and stand ready to work with the Committee on policies that reduce payment errors, preserve program resources and promote access to medically necessary, quality rehabilitative care.

AMRPA Magazine September 2017