Looking Ahead to October: AMRPA’s Recommendations Related to Coverage, Payment & Patient Outcomes Were Incorporated in the FY 2021 IRF Payment Final Rule

Looking Ahead to October:

AMRPA’s Recommendations Related to Coverage, Payment & Patient Outcomes Were Incorporated in the FY 2021 IRF Payment Final Rule

Kate Beller, JD, AMRPA Executive Vice President for Government Relations and Policy Development

On August 4, the Centers for Medicare and Medicaid Services (CMS) released the federal fiscal year (FY) 2021 Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Final Rule and accompanying Fact Sheet. The rule will go into effect on October 1, 2020, and is scheduled to be published in the Federal Register on August 10, 2020.

Most notably, CMS significantly scaled back its proposal to allow non-physician practitioners (NPPs) to perform certain IRF services that are currently required to be performed by a rehabilitation physician (for example, completing the pre-admission screening). AMRPA raised serious concern about the proposal’s potential impact on patient care and safety, and we conveyed our concerns through our comprehensive comment letter and discussions with CMS and other postacute care stakeholders. AMRPA therefore supports CMS’ decision to significantly limit this proposal to only allow NPPs to conduct 1 of the three required face-to-face physician visits with the patient per week, beginning with the second week of the “CMS’s decision to directly respond to patient’s admission to an IRF. Numerous arguments many of our leading raised by AMRPA in our letter – such as the fact that concerns in its final rule the role and judgment of rehabilitation physicians constitutes a big win are central to the successful outcomes of complex IRF patients – were cited by CMS in the final rule. Additional detail on this provision is included in the for AMRPA and, most importantly, the quality summary section below. of care provided to our patients and their In addition to the NPP provision, CMS also finalized the removal of the Post-Admission Physician outcomes. We applaud Evaluation (PAPE) consistent with AMRPA’s CMS for this action and recommendation. The PAPE requirement was are gratified that CMS temporarily waived as an IRF coverage requirement leadership recognized under the April 6, 2020, interim final rule in response the immense value to the COVID-19 public health emergency (PHE). With the PHE being extended in late July, AMRPA that IRFs and direction anticipates that the PAPE will remain waived until its under rehabilitation permanent removal on October 1, 2020. physicians offer.” AMRPA is closely reviewing some other provisions of the rule, including CMS’ decision to codify most — Dr. Robert Krug, AMRPA Board Chair

of the existing documentation instructions and guidance located in the Medicare Benefit Policy Manual (MBPM) related to the pre-admission screen. AMRPA had encouraged CMS to allow physicians to rely on their training and expertise to determine which information best supports the appropriateness of the admission, arguing that such an approach would reduce provider burden, facilitate appropriate and timely patient admissions to IRFs, and improve the post-admission review process for both IRFs and Medicare contractors. At the same time, CMS partially acted on AMRPA’s recommendation to eliminate duplicative reporting requirements for the pre-admission screen that are currently included in the MBPM, including the expected frequency and duration of treatment in the IRF and any anticipated post-discharge treatments. We will closely monitor the impact of this change in the upcoming payment year.

With respect to payment, CMS finalized changes to the weights and average lengths of stays for the IRF PPS Case Mix Groups (CMGs), an increase in the standard payment conversion factor due to growth in the IRF market basket, and an increase to the labor-related share. Overall, CMS estimates payments to IRFs will increase by 2.8%, or approximately $260 million nationwide in FY 2021. For reference, CMS finalized a 2.5% update in its final FY 2020 IRF PPS rule. CMS also finalized its proposal to use new statistical regional areas for purposes of IRF wage index adjustments, which will result in notable changes for some providers.

Additionally, CMS finalized the method for applying the 2 percentage point reduction (i.e., penalty) to the FY 2021 IRF increase factor for IRFs that fail to meet Quality Reporting Program (QRP) requirements. This is the only provision impacting the QRP in the FY 2021 rule, given CMS’ asserted intent to limit the scope of rulemaking in light of the PHE’s impact on our industry.

CMS also notes that it received comments on some issues that AMRPA is closely tracking – such as IMPACT Act data availability – but noted that such issues are also outside of the scope of the rulemaking and not subject to a response from CMS.

While the IRF PAI v. 4.0 was initially scheduled to take effect in conjunction with the effective date of the FY 2021 payment rule, CMS announced the delay of the IRF PAI update (until at least one full fiscal year after the public health emergency is declared over) in its separate COVID-19 interim final rule. We will continue to analyze the rule and assess potential impact on our future efforts related to burden reduction, post-acute payment reform, and other Association priorities. Please reach out to staff with any questions or concerns you have on the final rule.

We’ve copied below the Highlights section that was included in our AMRPA Special Edition: Off the Record analysis, which was distributed to members hours after the rule’s release: HIGHLIGHTS

A. FY 2021 Case Mix Revisions and Payment Changes

CMS finalized its yearly updates to the IRF PPS CMGs, the standard payment conversion factor, and the labor-related share. CMS also finalized its proposal to use updated statistical regions to assign wage indexes to hospitals, which will result in payment changes in some areas, along with a transition policy.

1. FY 2021 Case Mix Groups and Average Lengths of Stay

Consistent with previous annual updates, CMS used the most recent claims and cost report data to update the CMG relative weights and average lengths of stay (ALOS) for FY 2021. Table 2 on page 18 of the display version of the final rule presents the proposed relative weights for all CMGs and tiers, as well as the new proposed ALOS. These finalized CMG weights are consistent with CMS’ proposal, and CMS estimates that 99.3% of all IRF cases are in CMGs and tiers that would experience less than a 5% change (either increase or decrease) in its assigned weight.

2. Standard Payment Conversion Factor

In the proposed rule, CMS stated that it forecast a growth in the market basket of 2.9% for FY 2021. However, CMS typically uses updated data and creates a new forecast for the final rule. This year, using updated data, CMS and its contractor forecast the market basket to grow at just 2.4%, which it has now finalized as the market basket update for FY 2021. CMS also finalized a 0% productivity adjustment and a standard payment conversion factor of $16,856.

3. Wage Index and Labor Related Share Changes

CMS proposed a labor-related share for FY 2021 of 72.9%, up from the FY 2020 share of 72.7%. After using its updated forecasts for the final rules, CMS finalized a labor-related share of 73.0%. This will correspondingly lead to a slight increase in variations in payments across regions as a higher percentage of IRF payments are adjusted according to their local wage index.

CMS has also finalized its proposal to re-assign geographic regions to new designated areas. These new designations will be based upon updated delineations called Core-Based Statistical Area (CBSA) market definitions from the White House Office of Management and Budget (OMB). The changes to the CBSAs will result in some hospitals being grouped into a different region, potentially with a different rural, urban or other designation, and/or with a different wage index figure. CMS estimates approximately 5% of IRFs will see a decrease in their wage index value as a result of these changes. To address this, CMS has finalized a transition policy to implement the new wage indexes over a two-year period. CMS will cap any decreases in wage index values at 5% for FY 2021, and any remaining change will be realized in FY 2022.

4. Outlier Threshold

CMS proposed to reduce the outlier threshold amount from $9,300 for FY 2020 to $8,102 for FY 2021 in the proposed rule to ensure outlier payments account for 3% of total payments. In the final rule, using updated data, CMS finalized an even lower outlier threshold of $7,906 for FY 2021. If CMS correctly forecast the outlier threshold, CMS estimates there will be a

5. Total Estimated Payment Changes

Overall, CMS estimates an increase of $260 million in aggregate payments to all IRF providers over FY 2020 payments, or about 2.8%. $220 million of this is attributable to the market basket increase (including adjustments for budget neutrality factors) with the remainder attributable to the potential for an increase in outlier payments. In addition, CMS also estimates urban IRFs would see a 2.8% increase overall and rural IRFs would see a 3% increase overall.

B. Removal of the PAPE Requirement from the IRF Coverage Requirements

As part of its Patients Over Paperwork initiative, CMS proposed and finalized the provision to remove the PAPE documentation requirement from both the coverage regulation and the MPBM. CMS provided several grounds for this change, including that “if IRFs are doing their due diligence while completing the preadmission screening … by making sure each prospective IRF patient meets all of the requirements to be admitted to the IRF, then the post-admission physician evaluation is unnecessary.” CMS says the proposal received unanimous support from commenters, with many commenters stating the information included in the PAPE is duplicative of the information already included in a thorough history and physical. The proposal followed the temporary relaxation of the PAPE requirement as part of the April 6, 2020 interim final rule in response to the COVID-19 PHE. At the time of issuing that interim final rule, CMS asserted that it intended to use the temporary waiver to determine the impact of eliminating the PAPE requirement as permanent policy.

C. Revisions to Certain IRF Coverage Documentation Requirements 1. Pre-admission Screening Documentation Instructions and

Guidance

In an effort to reduce burdens on MACs, CMS proposed to codify the pre-admission screening elements included in the Medicare Benefit Policy Manual in full. CMS’ proposal was likely a response to the Supreme Court’s Allina decision, which held that Medicare interpretive guidance is not binding unless issued through notice-and-comment rulemaking. However, due to stakeholder concerns about the duplication of some of the elements, CMS finalized the following narrower set of preadmission screening elements: • Prior level of function • Expected level of improvement • Expected length of time to achieve that level of improvement • Risk for clinical complications • Conditions that caused the need for rehabilitation • Combinations of treatments needed • Anticipated discharge destination. As a result of the finalized rule, three of the elements currently included in the MBPM will no longer be part of the preadmission screening requirements: (1) the expected frequency and duration of treatment in the IRF; (2) any anticipated post-discharge treatments; and (3) other information relevant to the patient’s care needs. CMS states that these elements are duplicative requirements that will be captured in other medical documentation, such as the history and physical or the individualized overall plan of care. Furthermore, these elements require the rehabilitation physician to predict what will happen during and after the IRF admission, which often changes during the IRF stay. As such, CMS will be removing these elements from the MBPM.

2. Definition of a “Week”

In the proposed rule, CMS proposed to clarify that, for the purposes of the IRF intensity of therapy requirement (i.e., the so-called “3 hour rule”), a “week” is defined as

“a 7 consecutive calendar day period.” CMS notes that stakeholders asserted that a “week” may be construed in different ways (for example, Sunday-Monday), and for that reason, CMS proposed to use “a seven consecutive calendar day period” language for clarity. CMS is finalizing this proposal without change.

D. Provisions Impacting Non-Physician Practitioners & IRF Coverage Requirements

With respect to the non-physician practitioner issue in the FY 2021 IRF PPS proposed rule, CMS referenced the October 2019 Executive Order that requires federal agencies to assess whether any current regulatory requirements restrict “professionals from practicing within their full scope of practice.” Pursuant to this Executive Order, CMS initiated a review of the current requirements specific to rehabilitation physicians to determine whether some of these requirements could be fulfilled by NPPs. The proposed rule did not specifically define the term, “nonphysician practitioner.” Based on this review, CMS proposed that an NPP could perform the following services that are currently required to be performed by a rehabilitation physician:

• Conduct face-to-face visits with the patient at least 3 days per week throughout the patient’s stay in the IRF; • Conduct or appoint the clinician to conduct the preadmission screening, as well as review and concur with the findings of the preadmission screening; • Develop the Individualized Plan of Care (IPOC) • Lead the interdisciplinary team meeting • Complete the PAPE within 24 hours of the patient’s admission to the IRF (Note: CMS proposed and subsequently finalized the removal of the PAPE, rendering this NPP proposal moot). AMRPA joined the majority of other commenters in opposing this proposal on numerous grounds (full comments available here). Citing many of the points raised by AMRPA in our comment letter, CMS only finalized a portion of the proposed policy, allowing NPPs to conduct one of the three required rehabilitation physician visits in every week of the IRF stay after the first week (and only if permitted within the NPP’s scope of practice under state law). CMS asserts that it “believe[s] it is prudent at this time to take a more measured approach to expanding the role of non-physician practitioners in the IRF setting to ensure that the

vulnerable IRF populations will continue to receive the highest quality of care for their post-acute rehabilitation needs.” CMS also notes that it will require the rehabilitation physician to visit patients a minimum of three times in the first week to “ensure that the patient’s plan of care is fully established and optimized to the patient’s care needs in the IRF.” Significantly, the final rule does not permit NPPs to perform any of the other rehabilitation physician-focused coverage requirements included in the proposed rule. Finally, the final rule specifically defines NPPs as physician assistants, nurse practitioners, and licensed practical nurses.

AMRPA strongly supports CMS’ decision with respect to the NPP policies. As AMRPA emphasized in our comment letter, the role and judgment of rehabilitation physicians in IRFs is central to the successful outcomes of complex IRF patients, and this component is one of several that distinguish IRFs from other less intensive post-acute care settings – particularly during the public health emergency. AMRPA is gratified that CMS recognized the value of IRFs and rehabilitation physician direction of the rehabilitation team in the final rule.

CMS asserts that its decision to finalize a portion of the proposed policy “mitigates many of the concerns expressed by commenters,” as it “preserves the existing benefit structure of the IRF setting, ensures the quality of care for IRF patients by continuing the rehabilitation physician’s close involvement in the establishment of the patient’s plan of care and the initial implementation of the plan of care, and allows non-physician practitioners to assist in implementing the plan of care once it has been fully established.” CMS adds that it believes its approach takes “full advantage” of the training and experience that rehabilitation physicians bring to the care of IRF patients, while also allowing patients to benefit from the training of NPPs in certain circumstances. We look forward to receiving member feedback on this provision.

CMS estimates that any savings from this provision will not be significant (less than $3 million while anticipating that IRFs will adopt this new flexibility about 50% of the time), but it also does not anticipate that this approach will increase costs to the Medicare program.

E. Quality Reporting Program

For IRFs that fail to comply with quality data submission requirements, CMS proposed and finalized application of a 2% reduction (i.e., payment penalty) to the applicable FY 2021 market basket increase factor used to calculate an adjusted FY 2021 standard payment conversion factor. CMS says such reductions to the market basket increase factor are not cumulative and will only apply to a particular fiscal year as a penalty for failing to comply with quality reporting requirements. Accordingly, IRFs that do not meet the quality reporting requirements will receive an adjusted standard payment conversion factor of $16,527, a significant financial penalty when the vast majority of infractions involve good faith errors in electronic submission of data. No other QRP provisions were included in the final rule.

Resources • FY 2021 IRF PPS Final Rule (display version) and Fact Sheet • FY 2021 IRF PPS Data Files (when available) • AMRPA Comments on the FY 2021 IRF PPS Proposed Rule