Inpatient Facility Coding & Compliance Alert

CMS proposes new quality measures for hospitals.

Your inpatient rehabilitation facility (IRF) is in for a major reimbursement revamp next year!  On April 23, CMS proposed fiscal year (FY) 2016 Medicare payment policies and rates for the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the IRF Quality Reporting Program (IRF QRP). Read on to know the gist of proposed changes in 2016.

Prepare for Proposed Changes to IRF Policies and Rates 

The IRF PPS payments would witness a 1.9 percent increase factor beginning Jan 1, 2016. An additional 0.2 percent decrease to aggregate payments due to updating the outlier threshold results in an overall update of 1.7 percent (or $130 million), relative to payments in FY 2015.

“This is a significant increase,” says Duane C. Abbey, PhD, president of Abbey and Abbey Consultants Inc., in Ames, IA. “While many in the IRF world would probably claim that this is not enough of an increase, it is certainly a step in the right direction.”

No changes to the facility-level adjustments: CMS froze the facility-level adjustment factors at the FY 2014 levels for FY 2015 onwards, until future notice and comment rulemaking.

“I am not certain how much of an impact individual IRFs can have in this area,” admits Abbey. “The changes are specific enough so that financial analysts will be able to assess impact.”

IRF-specific market basket: For FY 2016, CMS proposes an IRF-specific market basket to replace the Rehabilitation, Psychiatric and Long-Term Care (RPL) market basket, using the FY 2012 Medicare cost report data of the freestanding and hospital-based IRFs.

Changes to the wage index: The Office of Management and Budget (OMB) issued changes in 2013 related to the delineation of Metropolitan Statistical Areas and Combined Statistical Areas. To align with the changes, using a 1-year transition, the FY 2016 wage index would consist of a blend of 50 percent of the FY 2016 wage index using the current OMB delineations and 50 percent of the FY 2016 wage index using the revised OMB delineations.

The after effects: As a result, some IRF providers would have their status changed from rural to urban. While the urban wage index is typically higher than the rural wage index, under the IRF PPS, the shift to urban status results in a 14.9 percent rural adjustment. Thankfully, CMS has proposed a gradual phase out of these IRF providers’ rural adjustment over a three-year period. CMS recommends that these providers receive two-thirds of the rural adjustment in FY 2016, one-third of the rural adjustment in FY 2017, and no rural adjustment in FY 2018.

Check the Proposed Changes to the IRF Quality Reporting Program

IRFs need to report data on measures that satisfy domains specified under the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act).The domains and the quality measures proposed are as follows:

• Domain 1. Skin integrity and changes in skin integrity:
  
  • Quality Measure: NQF #0678 (Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened)
• Domain 2. Functional status, cognitive function, and changes in function and cognitive function:
  
  • Quality Measure : NQF #2631; under review (Application of the “Percent of Long-Term Care Hospital Patients With an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function”)
• Domain 3. Incidence of major falls:
  
  • Quality Measure: NQF #0674 (Application of the “Percent of Residents Experiencing One or More Falls with Major Injury”).

In 2016, these measures are also to be implemented in Long-term Care Hospitals (LTCHs), IRFs, Skilled Nursing Facilities and Home Health Agencies. IRFs that fail to comply will face a two percentage point reduction to their applicable FY annual increase factor.

In addition to the measures listed above, CMS also proposes to publically report IRF quality reporting program quality data beginning in fall 2016. There would be a period for review and correction of quality data prior to the public display of IRF performance data.

How should you prepare: Keep these proposed changes in mind as you lay down your budgets and financial strategies for the next year. Also familiarize yourself with the new measures that you would need to use next year. 

“These quality measures have been known for some time,” divulges Abbey. “Thus, any implementation should not come as a surprise. If no work has been done in this area, then appropriate systems will have to be developed and implemented.”

Being proactive, you can also go through the proposed rule, and suggest changes, if any; that you may want to be incorporated. Comments on the proposed rule can be made until June 22, 2015. The proposed rule is available online at http://federalregister.gov/a/2015-09617.