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CMS Releases SNF PPS Rates for Fiscal Year 2011

CMS releases SNF PPS rates for fiscal year 2011
BREAKING NEWS FROM HCPRO

by MacKenzie Kimball

CMS included an update to the SNF PPS rates and consolidated billing for fiscal year (FY) 2011 in the July 22 Federal Register.

The notice contains a number of provisions in compliance with the Patient Protection and Affordable Care Act, such as final rates under RUG-IV and the hybrid payment system mandated by the healthcare reform law. The payment rates for RUG-IV will go into effect October 1, 2010 on an interim basis until CMS develops the hybrid RUG system, known as HR-III. However, if the Senate passes H.R. 5712, which the House passed July 14, the one year partial delay of RUG-IV included in the healthcare reform law would be repealed and CMS will be able to implement RUG-IV in full on October 1, 2010.

“The rates are in line with what we expected, but it is difficult to move forward under RUG-IV not knowing if rates will be adjusted halfway through the year,” says Diane Brown, a regulatory specialist and Boot Camp instructor at HCPro. “It is nearly impossible to budget for the upcoming year when you don't know exactly what the reimbursement will be. For example, a facility may be classified into and paid at LE2 for 100 days based on coding a diabetic foot ulcer or unstable Parkinson's disease on the MDS 3.0. If the repeal of the delay is not implemented by Congress, then when HR-III goes into effect the entire payment would be retracted as those items are not covered by the RUG-III payment system.”

Another key element of the payment update is a 1.7% increase to the SNF market basket, which represents the 2.3% increase factor combined with the negative 0.6% forecast error adjustment for FY 2009. According to the notice in the Federal Register, estimated payments to SNFs are expected to increase by $542 million compared with those in FY 2010.

“The market basket increase makes everything a little more palatable,” Brown says. “It is good that there will not be an overall decrease and we are at least getting the 1.7% increase.”

The notice also included adjustments to the case-mix index (CMI) to achieve parity in overall payments between the existing RUG-III model and the RUG-IV and HR-III models.

According to the notice in the Federal Register, “Using the methodology finalized in the FY 2010 SNF PPS final rule with updated FY 2009 claims data, the adjustment to the RUG?IV nursing CMIs necessary to achieve parity is an upward adjustment of 61 percent.”

Also, based on CMS' analysis of the FY 2009 claims data, the nursing CMIs under the HR?III model will see an upward adjustment of 34.2% to achieve parity with the RUG-III model.

“The release of the rates is a key element in preparing to move forward with the October 1, 2010 implementation of the MDS 3.0 and RUG-IV or HR-III,” Brown says.