CMS’ FY 2019 Final Rules: Key Takeaways

Impacts to the Post-Acute Settings of LTACHs, IRFs and SNFs

With an emphasis on helping providers reduce burdens to become more patient-focused, CMS recently issued its Fiscal Year 2019 final rules for:

• Medicare Inpatient Rehabilitation Facility Prospective Payment System (CMS-1688-F);
• Medicare Payment Update and Quality Program Changes for Skilled Nursing Facilities (CMS-1696-F); and
• Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTACH) Prospective Payment System Final Rule (CMS-1694-F).

Unless otherwise stipulated, the final rules apply to discharges occurring on or after October 1, 2018.

The new rules offer increased reimbursement, refined quality reporting requirements, and decreased requirements for facilities. In some instances, opportunities for growth exist that were not previously permitted.  As the system moves toward what may eventually become a unified prospective payment system, CMS has put into place measures which will ease the transition and reduce provider burden to permit more focus on patient care delivery.

Long Term Acute Care Hospitals

Affecting approximately 420 Long Term Acute Care Hospitals, the Fiscal Year 2019 rules include the following key areas:

• The 25% Threshold Rule;
• A Long Term Acute Care Hospital Payment Update; and
• A Long Term Acute Care Hospital Quality Reporting Program (LTACHQRP).

The 25% Threshold Rule

For over a decade, providers across the nation have strongly advocated an end to the unduly restrictive 25% threshold rule. Under the Fiscal Year 2019 Final Rule, CMS has terminated the rule in a budget-neutral manner. LTACHs will now be permitted to admit appropriate patients from any referral source without limitation.

Impact: With these restrictions officially removed, LTACHs now have the freedom to foster stronger relationships with referral sources and more effectively grow their census. Overall, this reform should result in more stable operations, while also eliminating an arbitrary policy that emphasized referral source over patient clinical need.

A Long Term Acute Care Hospital Payment Update

Demonstrating positive support for this venue of care, LTACH payments are anticipated to increase by approximately 0.9% in the Fiscal year 2019. The new rules also extended the blended payment rate for an additional two fiscal years (Fiscal Year 2018 and Fiscal Year 2019).

Impact: Increased reimbursement and extension of the blended payment rate under the site-neutral reimbursement structure allows long term acute care hospitals to better position themselves, moving forward under the established LTACH criteria.                    

A Long Term Acute Care Hospital Quality Reporting Program (LTACH QRP)

To reduce the burden on providers and to prevent duplicative reporting, CMS has removed the following quality measures from the program:

Additionally, CMS is making changes to documentation requirements, giving greater flexibility to providers while maintaining program integrity.

Changes include:

• Removing certification statement location requirements;
• Reducing claim denials for clerical errors pertaining to physician admission orders;
• Increasing flexibility in Graduate Medical Education (GME) affiliation agreements;
• Reducing documentation requirements pertaining to wage index geographic classification for the Fiscal Year 2021; and
• Revising regulations that would permit LTACHs to operate an IPPS-excluded unit.

Impact:    It is believed that the changes made under this final rule will significantly reduce the time spent by hospitals while eliminating duplicative reporting requirements, clerical work, and documentation requirements. These revised regulations will also support opportunities for future LTACH operational growth that was previously prohibited.  For example, LTACHs would be permitted to operate a psychiatric unit or rehabilitation unit.

Inpatient Rehabilitation Facilities

As with other venues of care, the Fiscal Year 2019 final rules for Inpatient Rehabilitation Facilities focus on burden reduction, decreased documentation requirements, and increased flexibility.  Effecting discharges occurring on or after October 2018 (unless otherwise stipulated), the rules, including the following key areas, were recently finalized:

• IRF Coverage Requirements;
• Removal of FIM Scores from IRF-PAI;
• Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP); and
• Inpatient Rehabilitation Facility Payment Update.

IRF Coverage Requirements

In an effort to increase provider flexibility and decrease burden, the Fiscal Year 2019 final rules allow for the following:

• Permits use of the Post Admission Physician Evaluation (PAPE) as one of the required face to face physician visits;
• Permits physicians to lead weekly team conferences remotely; and
• Removes physician admission order documentation requirements.

Impact: This final rule allows greater discretion by rehab providers to participate in the conferences in the location of their choice; which reduces burden, and may mean more time spent with the patient. Refinement of documentation requirements decreases burden and, again, can translate into more time with the patient.

Removal of FIM Scores from IRF-PAI

CMS is working to finalize the removal of the FIM scores and Function Modifiers for discharges on or after October 1, 2019, as this data is collected elsewhere.   CMS will also continue data aggregation for CMG definition revisions for implementation beginning Fiscal Year 2020.

Impact: Decreases redundant data capture; moves toward standardization among post-acute care settings.

Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP)

To reduce the burden on providers and to prevent duplicative reporting, CMS has removed the following quality measures from the program:

Additionally, CMS is making the following changes:

• Utilizing update methods of notification of non-compliance with quality reporting;
• Providing data on Functional Outcome Measures in 2020; and
• Considering costs against benefits for quality measurement evaluation.

Impact:    This demonstrates a commitment by CMS to ensure quality measures are meaningful, and to reduce the burden placed upon providers wherever possible.

Inpatient Rehabilitation Facility Payment Update

Demonstrating positive support for this venue of care, IRF payments are anticipated to increase by approximately 1.3% in Fiscal Year 2019.

Impact: Increased reimbursement for inpatient rehabilitation facilities.

Skilled Nursing Facilities 

The final rules for the Fiscal Year 2019 address three main areas:

1. The case-mix classification system used under the SNF PPS;
2. The SNF Value Based Purchasing Program; and
3. The SNF Quality Reporting Program.

Also discussed is the payment update under the SNF Prospective Payment System.

Case-mix classification system used under the SNF PPS

The new SNF Patient-Driven-Payment-Model (PDPM) will become effective on October 1, 2019.  This payment model focuses on the needs of the patient versus the volume of treatments provided, as is the case under the current Resource Utilization Group (RUG) model.

Furthermore, the PDPM model contains the following key elements:

• Variable per diem rates to compensate for higher resource utilization at the beginning stages of a patient’s stay;
• Interrupted Stay policy for patients leaving the SNF for 4 or more days; and
• Limits on group and concurrent therapy to 25%.

Impact: This model has been developed to be less complex than the current system, increase reimbursements to align with complex patient needs, and to reduce facility burden. This model also moves toward a unified payment system for post-acute care providers. The limitation on group and concurrent therapy ensures that the majority of therapy provided is individual, which is believed best practice for the patients.

SNF Value Based Purchasing Program

Beginning October 1, 2018, the Skilled Nursing Facility Value Based Purchasing Program will commence incentive payments (positive or negative) for services based on the readmission measure.   The Fiscal Year 2019 rules include discussion of the following as they relate to the SNF Value Based Purchasing Program:

• Policy Updates;
• Adjustments to the VBP Scoring Methodology; and
• The inclusion of an Extraordinary Circumstances Exception Policy.

Impact: Incentive payments will be available to those facilities making efforts to reduce readmissions.

SNF Quality Reporting Program

CMS is adopting another factor for use in eliminating quality measures from the current program. They involve considering costs against benefits for continued use in quality measurement evaluation.   CMS is also expanding its notification methods for non-compliance with SNF QRP requirements.

Impact: This reform demonstrates a commitment by CMS to ensure quality measures are meaningful and reduce provider burden wherever possible.

Skilled Nursing Facility Payment Update

In accordance with the Bipartisan Budget Act of 2018, the aggregate impact of SNF payments are estimated to increase by 2.4% in the Fiscal Year 2019.

Impact: The update increased reimbursement for skilled nursing facilities.

To assess the effect these final rules will have on your organization contact Advis by calling 708.478.7030 or through our website.