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  1. Health Care Sabotage: More on Short-Term Limited-Duration “Junk” Plans
  2. Home Health Highlight: People Can Leave Home and Still Receive Medicare-Covered Home Care
  3. CMS Tries Again: Another New Skilled Nursing Facility Medicare Reimbursement System Proposed – If Implemented, Would Gut Therapy

Health Care Sabotage: More on Short-Term Limited-Duration “Junk” Plans

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Free Webinar Series

Next Webinar:

Older Americans Month topic:

Recurring Skilled Nursing Facility Issues

May 23, 2018
3:00 p.m. ET 

Presenters:
Center for Medicare Advocacy Senior Policy Attorney Toby Edelman and Attorney Dara Valanejad

 

In a New York Times article this week, Robert Pear reported on a study done by the chief actuary of the Center for Medicare & Medicaid Services, which shows the devastating impact of expanding access to short-term, limited-duration plans, as proposed by the Trump Administration. According to the Times, the study finds that as many as 1.4 million people could enroll in these plans during the first year. The study also finds that these plans could increase federal spending by as much as $1.2 billion next year and $38.7 billion over ten years. These numbers are in direct contradiction to what the Administration has said about the number of enrollees and cost to the government.

Just last week, in a hearing on Capitol Hill, Health and Human Services Secretary Azar defended the Administration’s proposal on these junk plans. Azar is quoted as saying “…expanding short-term health plans will not harm the insurance marketplace.” He also stated that “People are not going to be leaving subsidized insurance,” even as repeated studies show the opposite to be true.

For months now, the Center for Medicare Advocacy has been highlighting the impact of these misguided proposals on the individual marketplace and on older and disabled consumers. These plans were never meant to provide long-term insurance. At best, they serve as a stopgap coverage in limited situations. It is important to remember that this sort of short-term coverage has high out-of-pocket costs, doesn’t have to cover essential health benefits, may discriminate based on age or gender, may impose lifetime and annual limits, and doesn’t protect people with pre-existing conditions. In fact, one insurer specifies that “A pregnancy existing on the effective date of coverage will also be considered a preexisting condition.”  

While such plans will attract younger, healthier consumers, those who are older or disabled will face higher and higher costs – essentially being penalized for remaining in the marketplace, which, for now, will be the only place they can get the actual coverage that meets their needs.

Below are just a few of the reports that clearly show that these short-term plans will wreak havoc on the marketplace and give consumers a raw deal.

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Home Health Highlight: People Can Leave Home and Still Receive Medicare-Covered Home Care

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The Center for Medicare Advocacy hears from Medicare beneficiaries throughout the country who are living with serious illnesses and injuries without the home care they need – and that should be covered by Medicare. There are many reasons for these access problems. Patients are told they don’t meet the qualifying criteria because they aren’t “homebound,” they don’t need skilled nursing or therapy, or they “only need maintenance care,” since they aren’t improving. Increasingly, they are told home health aides only provide bathing, for only a few days a week. None of this is accurate. All of it is harmful. 

Recently people have reported being denied access to Medicare home health care due to restrictive interpretations of the homebound standard, which must be met in order to qualify for coverage. To meet this standard,

  • The individual must require assistance of another person or supportive device to leave home; or
  • It is contraindicated for him/her to leave due to his or her medical, cognitive, or psychological condition; and
  • There is a normal inability to leave home; and
  • It requires a “considerable and taxing effort” to leave home.[1]

Unfortunately, too many Medicare providers and contractors misunderstand or distort this requirement.  For example, we received the following question from a woman who has ALS:

I cannot speak [due to my ALS] but I have a question. I was discharged a year ago from my home health agency because after the long winter of being home bound, I went to see a movie with my adult son. [The home health agency] said "You must admit, your case of ongoing care with our agency is unusual!" I didn’t fight their treatment. My question is this: living in Wisconsin with our harsh winters, making going out considerably more difficult, could I get the help I need for the winter months? My doctor has never hesitated to give me an order for needing skilled care and a plan of care. …

This kind of experience is untenable. The individual is clearly homebound, in fact, without help from another person, she would be bedbound...  She is not required to be a prisoner in her own home in order to meet the Medicare homebound requirement.

As the Centers for Medicare & Medicaid Services’ own policy manual states,

“… occasional absences from the home for nonmedical purposes, e.g., an occasional trip to the barber, a walk around the block or a drive, attendance at a family reunion, funeral, graduation, or other infrequent or unique event would not necessitate a finding that the patient is not homebound if the absences are undertaken on an infrequent basis or are of relatively short duration and do not indicate that the patient has the capacity to obtain the health care provided outside rather than in the home.”[2]

The intent of the homebound standard is to provide Medicare-covered care at home for people who don’t ordinarily have the capacity to leave home to obtain the health care they need. We urge advocates, providers, and CMS to help ensure the standard is not restrictively interpreted to bar access to reasonable and necessary care for people who qualify under the law.


[1] Medicare Benefit Policy Manual, Ch. 7, Sec. 30.1.1; See also, 42 USC §1395n
[2] Medicare Benefit Policy Manual, Ch. 7, Sec. 30.1.1.

 

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CMS Tries Again: Another New Skilled Nursing Facility Medicare Reimbursement System Proposed – If Implemented, Would Gut Therapy

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Proposed changes to nursing facility payment under consideration by CMS would reduce financial incentives to provide therapy, and would do so with such force – providing higher reimbursement to skilled nursing facilities (SNFs) that provide residents fewer types of therapy over a shorter period of time, or no therapy at all – that it would actually encourage facilities not to provide therapy. Further, the Jimmo v. Sebelius mandate to cover maintenance therapy would be ignored.

Comments on the NPRM are due June 26, 2018.  More details on the proposed changes below.

Ever since the prospective payment system for Medicare coverage of skilled nursing facilities (SNFs) was first implemented in 1998, the system has faced ongoing criticism.  Critics, including the Medicare Payment Advisory Commission[1] and the Department of Health and Human Services’ Office of Inspector General,[2] report that the reimbursement system encourages over-utilization of therapy services and provides insufficient payment for nursing services and inaccurate payment for non-therapy ancillary services (chiefly prescription drugs).  In May 2017, the Centers for Medicare & Medicaid Services (CMS) published an Advance Notice of Proposed Rulemaking (ANPRM) to solicit comments on options under consideration for revising the reimbursement system.[3]  CMS set out a proposed framework for a new Medicare payment system for SNFs, called Resident Classification System, Version I (RCS-I).

This May, as part of the annual update to Medicare SNF reimbursement, CMS abandoned RCS-I.  Instead, CMS proposes a different revised reimbursement system for SNFs, now called Patient-Driven Payment Model (PDPM).[4]  However, although CMS describes PDPM as different from RCS-I, in fact, many of the most troubling features are identical, if not worse.  Concessions to the nursing home industry (including requirements for fewer resident assessments and permission to use group and concurrent therapy for up to 25% of a resident’s therapy services) do not improve care for residents, and encourage gaming.

As described in detail in the NPRM (and illustrated in the chart below), PDPM dramatically changes the financial incentives for SNFs.  Under PDPM, as under RCS-I, SNFs would receive higher reimbursement if they provided 15 or fewer days of Medicare coverage and no therapy.  Medicare reimbursement would also be higher if 50-75% of a SNF’s Medicare days were billed as non-rehabilitationIn contrast, Medicare reimbursement would be lower for SNFs providing care to the oldest residents (age 90+), residents receiving three types of therapy, and residents having 31 or more days of care paid by Medicare.

Current Medicare Reimbursement System for SNFs

The current system, called Resource Utilization Groups (RUGs), uses a case-mix component and a non case-mix component (which reflects room and board and various capital costs).  The case-mix component uses resident assessment information to determine a resident’s classification for payment purposes.  RUG-IV has two case-mix categories – nursing (which includes non-therapy ancillary services) and therapy (which includes physical, occupational, and speech therapy).  A resident’s RUG classification is based on the higher of the two case-mix categories.  Payment for residents in therapy groups reflects the amount of therapy that a SNF reports providing.  There are now 66 RUG-IV classifications based on resident assessment information.  At this time, more than 90% of residents are assigned to a rehabilitation-based RUG.[5]

PDPM

Instead of the RUG-IVs’ two components (nursing and therapy) for case-mix adjustment, PDPM creates six federal base payment rate components, five that are case-mix adjusted and one that is not.  As described below, these components are used to determine the per diem rate:

Case mix-adjusted component (5 parts)

Nursing

  1. Nursing (57% of current nursing component)
  2. Non-therapy ancillary (43% of current nursing component)

Therapy

  1. Physical therapy
  2. Occupational therapy
  3. Speech-language pathology                     

Non case-mix-adjusted component (1 part)[6]

Case-Mix Adjustments under PDPM

Area

Case-mix adjustment

Number of case-mix categories

Physical therapy[7]

*clinical reason for hospital stay (using either hospital or SNF (MDS) assessment); 4 clinical categories (major joint replacement or spinal surgery, non-orthopedic surgery and acute neurologic, other orthopedic, and medical management)

*functional status (4 late-loss ADLs (bed mobility, transfer, eating, toileting) and 2 early-loss ADLs (oral hygiene, walking)

NOT INCLUDING COMPONENT FOR COGNITIVE IMPAIRMENT

16 case-mix categories

Occupational therapy[8]

* clinical reason for hospital stay (using either hospital or SNF (MDS) assessment); 4 clinical categories (major joint replacement or spinal surgery, non-orthopedic surgery and acute neurologic, other orthopedic, and medical management)

* functional status (4 late-loss ADLs (bed mobility, transfer, eating, toileting) and 2 early-loss ADLs (oral hygiene, walking)

NOT INCLUDING COMPONENT FOR COGNITIVE IMPAIRMENT

16 case-mix groups

Speech language pathology[9]

*clinical reasons for hospital stay (using 2 clinical categories)

*presence of swallowing disorder or mechanically-altered diet

18 case-mix groups

Nursing[10]

*uses CMS’s staff-time motion study, called Staff Time and Resource Intensity Verification (STRIVE) that was used to develop case-mix categories for RUG-IV

*functional status based on section GG of MDS

25 case-mix groups

Non-therapy ancillary[11]

*weighted count methodology

6 case-mix groups

 
Reporting that PT, OT, and NTA costs decline over the course of a resident’s stay, while nursing and ST do not decline, CMS proposes a variable per diem adjustment for the three components that decline:
  • A decline of 2% every 7 days after day 20 (0.3 * 7 = 2.1) for PT and OT.[12]  Table 30 indicates, for example, an adjustment factor of 0.88 for Medicare payment days 56-62, up to a 0.76 adjustment factor for days 96-100.
  • A decline of 3% beginning on day 4 of a Part A stay for NTA.[13] 

(In contrast, RCS-I used a variable per diem adjustment that it applied to the rate as a whole, not to three portions of the per diem rate.[14]

To determine the per day rate for a particular resident, PDPM

  • Classifies the resident into the five case-mix adjusted components (physical therapy, occupational therapy, speech and language pathology, nursing, and non-therapy ancillaries),
  • Calculates the payment for each component by multiplying the case-mix index by the component federal base payment rate,
  • Further calculates the payment for each component by applying the specific day in the variable per diem adjustment schedule, and
  • Adds these five separately-calculated components to the non-case-mix adjusted component payment rate.[15]

Another significant change from RUG-IV is the proposal to use the 5-day assessment for the entirety of a resident’s Part A stay.[16]  Under RUG-IV, payments are adjusted to reflect scheduled assessments that are conducted on days 15, 30, 60, and 90.[17] 

An Interim Payment Assessment (IPA) may be used to change a resident’s classification in order to reflect a significant change in a resident’s condition.[18]  The Discharge Assessment collects information on amounts of therapy provided during the Medicare-covered stay.[19]  CMS also proposes allowing facilities to use group therapy and concurrent therapy, for up to 25% of the therapy provided to a resident.[20]

Discussion of nursing in the NPRM is extremely limited.[21]  Acknowledging that it was “unable to construct a measure of nursing utilization based on current data because facilities do not report resident specific nursing costs,”[22] CMS used the STRIVE methodology (developed between 2005 and 2009 and used to establish RUG-IV)[23] and the newer assessment rules (Section GG of MDS 3.0).[24]

Winners and Losers Under PDPM

As for RCS-I, CMS provides two Tables identifying the impact of the proposed reimbursement system on reimbursement rates for individual residents and for facilities.  Although some of the specific changes are different from those that would have resulted if CMS had gone forward with RCS-I, the changes are in fact more pronounced in PDPM. Some key changes are highlighted.

Impact Analysis, Resident-Level[25]

Resident characteristics

Higher
reimbursement

% change PDPM

% change RCS-I

Lower
reimbursement

% change PDPM

% change RCS-I

Gender

Males

  1.2%

  1.2%

Females

  -0.8%

-0.7%

Age

Residents under 65

  7.2%

  5.4%

Residents 90+ years

  -4.3%

-2.8%

Medicare/Medicaid dual status

Residents who are dually eligible for Medicare and Medicaid

  3.3%%

  2.9%

Residents are not dually eligible for Medicare and Medicaid

  -2.1%

-1.9%

Disability status

Residents who are disabled

  4.8%

  3.9%

Residents who are aged

-1.7%

  -1.2%

Length of SNF stay

Residents with SNF stays of 1-15 days

13.7%

15.9%

Residents with stays of 31+ days

 -2.5%

  -2.5%

Use of 100-day SNF benefit

Residents not using 100 days

  0.1%

  0.3%

Residents using 100 days

  -1.9%

  -2.7%

Length of qualifying acute care stay

Residents with 31+ qualifying inpatient days

  6.7%

  4.6%

Residents with 3 qualifying inpatient days

  -3.3%

  -2.3%

Admitted with diagnosis of a stroke

Residents with a stroke

  0.3%

  0.7%

Residents without a stroke

   0.0%

  -0.1%

Presence of  cognitive impairment

Residents who are severely cognitively impaired

  8.8%

  6.1%

Residents who are moderately cognitively impaired

  -0.7%

  -1.8%

Admitted with, or has diagnosis of, HIV

Residents without HIV

  0.3%

  0.2%

Residents with HIV

-40.5%

-40.0%

Receipt of IV medications during stay

Residents with IV medication

23.5%

22.9%

Residents without IV medication

  -2.1%

  -2.0%

Presence of wound infection

Residents with wound infections

22.2%

17.9%

Residents without wound infections

  -0.3%

  -2.8%

Receipt of therapy services during SNF stay

Residents receiving a single therapy

44.2%

37.3%

Residents receiving 3 therapies

  -3.1%

  -3.9%

 

Residents not receiving any physical therapy

50.9%

24.2%

Residents receiving physical therapy

  -0.7%

  -1.0%

 

Residents not receiving any occupational therapy

47.7%

24.8%

Residents receiving occupational therapy

  -0.8%

  -1.2%

 

Residents receiving only occupational therapy

47.9%

41.8%

Residents receiving physical, occupational, and speech therapy

  -3.1%

  -3.9%

Non-therapy ancillary costs during SNF stay

Residents with NTA costs of $150

18.7%

19.2%

Residents with NTA costs of $10-$50

  -3.1%

  -3.1% (same)

Use of extensive services

Residents with tracheostomy

  7.3%

18.1%

 

 

 

The NPRM identifies the impact of PDPM on reimbursement rates for facilities.

Impact Analysis, Facility-Level[26]

Provider characteristics

Higher reimbursement

% change
PDPM

% change
RCS-I

Lower reimbursement

% change
PDPM

% change
RCS-I

Facility size

Small facilities, 0-49 beds

  3.5%

  6.7%

Facilities with 200+ beds

  -1.8%

  -0.7%

Ownership status

Non-profit facilities

  1.9%

  3.1%

For-profit facilities

  -0.7%

  01.1%

 

Government-owned facilities

  4.2%

  7.6%

 

 

 

Institution type

Hospital-based and swing-bed facilities

16.7%

15.8%

 

 

 

% of SNF stays with 100 day utilization

SNFs with 1-10% of their stays utilizing 100 days

  0.1%

  0.3%

SNFs with 25-100% of their stays utilizing 100 days

  -3.6%

  -3.9%

% of SNF stays with Medicare/Medicaid dual enrollment

SNFs with 50-75% of their stays with dual eligible residents

  1.3%

  0.8%

SNFs with 0-10% of their stays with dual eligible residents

  -1.3%

  -1.7%

% of SNF utilization days billed as rehabilitation ultra high (RU)

SNFs with 1-10% of the utilization days billed as RU

27.6%

28.4%

SNFs with 90-100% of the utilization days billed as RU

  -9.8%

  -9.9%

% of SNF utilization days billed as non-rehabilitation

SNFs with 50-75% of the utilization days billed as non-rehabilitation

35.8%

45.6%

SNFs with 0-10% of the utilization days billed as non-rehabilitation

  -1.5%

  -2.2%

 
Center for Medicare Advocacy Concerns

As demonstrated by the charts above, the proposed revision to Medicare reimbursement for SNFs dramatically alters the Medicare benefit, encouraging less therapy and shorter Medicare-covered stays.  PDPM does not necessarily improve nurse staffing levels. 

Does PDPM Improve Reimbursement?

The short answer is no. 

First, PDPM does not more accurately pay SNFs for providing care to residents who are in a Medicare Part A-covered stay; it simply reallocates payments.  PDPM does not necessarily pay SNFs appropriately for providing the care and services they are required to provide under the federal Nursing Home Reform Law.[27]  The revised Requirements of Participation are not reflected in the proposal. 

Second, PDPM’s overzealous reduced payments for therapy – giving higher reimbursement to SNFs that provide residents fewer types of therapy over a shorter period of time, or no therapy at all – actively encourage facilities not to provide therapy.  Jimmo’s[28] mandate to cover maintenance nursing and therapy is completely ignored.  People in need of this important care will be in jeopardy.

Finally, while PDPM eliminates what SNFs consider paperwork burdens (additional resident assessments) and reduces the number of case-mix categories (as compared to RCS-I), for purposes of reimbursement, it does little or nothing to increase reimbursement for nursing services.

Submitting Comments

Comments must be submitted by June 26, 2018.  When commenting, refer to file code CMS-1696-P.  Comments may be submitted electronically, at http://ww.regulations.gov, by regular mail, by express or overnight mail, or by hand or courier.[29]  Contact the Center for Medicare Advocacy if you would like help with comments.


[1] MedPAC, Report to the Congress: Medicare Payment Policy, Chapter 8, page 200 (Mar. 2017) (calling for lower rates and a revised reimbursement system.  “Under a revised design, payments would increase for medically complex stays and decrease for stays that include intensive therapy that is unrelated to a patient’s care needs.”), http://medpac.gov/docs/default-source/reports/mar17_entirereport.pdf?sfvrsn=0.
[2] OIG. Questionable Billing by Skilled Nursing Facilities (Dec. 2010), https://oig.hhs.gov/oei/reports/oei-02-09-00202.pdf; OIG, Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More Than a Billion Dollars in 2009 (Nov. 2012), https://oig.hhs.gov/oei/reports/oei-02-09-00200.pdf; OIG, The Medicare Payment System for Skilled Nursing Facilities Needs to be Reevaluated (Sep. 2015), https://oig.hhs.gov/oei/reports/oei-02-13-00610.pdf).
[3] 82 Federal Register 20980 (May 4, 2017), https://www.gpo.gov/fdsys/pkg/FR-2017-05-04/pdf/2017-08519.pdf.   
[4] 83 Fed. Reg. 21018, 21034-21080 (May 8, 2018), https://www.gpo.gov/fdsys/pkg/FR-2018-05-08/pdf/2018-09015.pdf
[5] 83 Fed. Reg. 21018, 21034-21036.
[6] 83 Fed. Reg. 21018, 21037.
[7] 83 Fed. Reg. 21018, 21042-21049.
[8] 83 Fed. Reg. 21018, 21049-21049.
[9] 83 Fed. Reg. 21018, 20149-21051.
[10] 83 Fed. Reg. 21018, 21051-21055.
[11] 83 Fed. Reg. 21018, 21055-21059.
[12] 83 Fed. Reg. 21018, 21061, Table 30.
[13] 83 Fed. Reg. 21018, 20161, Table 31.
[14] 82 Fed. Reg. 20980, 21002, Table 14.
[15] 83 Fed. Reg. 21018, 21059.
[16] 83 Fed. Reg. 21018, 21062.
[17] 83 Red. Reg. 21018, 21062 Table 32.
[18] 83 Fed. Reg. 21018, 21062-21063, 21064, Table 33.
[19] 83 Fed. Reg. 21018, 21063-21064, Table 33.
[20] 83 Fed. Reg. 21018, 21065-21068.
[21] 83 Fed. Reg. 21018, 21051-21055.
[22] 83 Fed. Reg. 21018, 21052.
[23] CMS, Time Study (STRIVE), https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/TimeStudy.html
[24] 83 Fed. Reg. 21018, 21052-21054.
[25] 83 Fed. Reg. 21018, 21075-21077, Table 37.
[26] 81 Fed. Reg. 21018, 21077-21079, Table 38.
[27] 42 U.S.C. §1395 i-3(a)-(h), 1396r(a)-(h), Medicare and Medicaid, respectively.
[28] See the Center’s extensive materials on Jimmo at http://www.medicareadvocacy.org/?s=Jimmo&op.x=0&op.y=0
[29] 83 Fed. Reg. 21018.

 

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