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June , 2018

Mr. Alex M. Azar. II
Secretary, Department of Health and Human Services

Seema Verma
Administrator, Centers for Medicare & Medicaid Services

Department of Health and Human Services
Room 445-G, Hubert H. Humphrey Building
200 Independence Ave., S.W.
Washington, D.C.  20201

Re: CMS-1696-P.  Notice of Proposed Rulemaking with Comment.  Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Proposed Rule for FY 2019; SNF Value-Based Purchasing Program, and SNF Quality Reporting, 83 Fed. Reg. 21018 (May 8, 2018)

Submitted electronically: http://www.regulations.gov

Dear Mr. Azar, Ms. Verma, and CMS Colleagues:

The Center for Medicare Advocacy (Center) is a national, private, non-profit law organization, founded in 1986, that provides education, analysis, advocacy, and legal assistance to assist people nationwide, primarily the elderly and people with disabilities, to obtain necessary health care, therapy, and Medicare.  The Center focuses on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care and provides training regarding Medicare and health care rights throughout the country.  It advocates on behalf of beneficiaries in administrative and legislative forums, and serves as legal counsel in litigation of importance to Medicare beneficiaries and others seeking health coverage.  These comments are based on our experiences talking with and representing hundreds of Medicare beneficiaries and their families who have been caught in observation status.

Overview of Comments

The Center strongly opposes the proposed new Medicare reimbursement system for skilled nursing facilities (SNFs), the Patient-Drive Payment Design (PDPM).  First, PDPM fails to achieve the goals that the Centers for Medicare & Medicaid Services (CMS) set out last year in the Advance Notice of Proposed Rulemaking (ANPRM) for the Resident Classification System as the goals for revising Medicare reimbursement.  Second, PDPM fails to correct problems in the current Medicare reimbursement system for SNFs that have been identified for many years.  Third, if implemented, the new system so aggressively reduces financial incentives to provide therapy to residents – providing higher reimbursement to SNFs that provide either fewer types of therapy to residents over a shorter period of time or no therapy at all – that it encourages, and will lead to, facilities’ providing residents with minimal, if any, therapy.  Fourth, the system undermines the mandate of Jimmo v. Sebelius, the nationwide lawsuit that recognizes and confirms Medicare coverage of medically necessary maintenance therapy, provided or supervised by professional therapists to enable nursing home residents to maintain function and to prevent or slow their decline or deterioration.  Fifth, concurrent and group therapy are permitted for up to a quarter of therapy services, reinstating permission to provide the types of therapy that have been criticized and despite CMS’s recognition that individual therapy is the best way to provide therapy to residents.  Sixth, front-loading payments results in reducing the benefit period for beneficiaries.  Seventh, elimination of the multiple assessments currently used to determine SNF reimbursement rates creates additional opportunities for fraud.  Finally, and perhaps most importantly, PDPM fails to correct the serious longstanding problem that nursing facilities do not employ sufficient numbers of professional and paraprofessional nursing staff.  Under PDPM, serious understaffing will remain the common practice.

At the end of our comments, we address additional issues from the proposed rules.

  1. The Proposed Patient-Drive Payment Design (PDPM) Does Not Achieve the Goals Identified by CMS in 2017

In the ANPRM published in May 2017, CMS described three goals for the new reimbursement system: (1) more accurately compensating SNFs; (2) reducing incentives for SNFs to deliver therapy based on financial considerations, rather than resident need; and (3) maintaining simplicity, to the extent possible.[1]  These goals presumably remain CMS goals, although they are not explicitly articulated in the 2018 NPRM.

PDPM does not achieve the first or third goals and grossly over-achieves the second goal.

First, PDPM does not appear to more accurately pay SNFs for providing care to residents who are in a Medicare Part A-covered stay.  As discussed in more detail later in this letter, PDPM rearranges or reallocates payments, but does not necessarily reimburse SNFs appropriately for the care they are required, by law, to provide.  As CMS reported in the ANPRM, the proposed case-mix adjustments for speech language pathology and non-therapy ancillary services have minimal correlation with current facility costs.  Of greatest concern, PDPM does nothing to improve critically low nurse staffing levels.

Moreover, PDPM does not more accurately pay SNFs for providing the care and services they are required to provide under the federal Nursing Home Reform Law of 1987, which remains the governing statute.[2]  The revised Requirements of Participation (RoPs), which were published in October 2016,[3] are not reflected in the proposal at all. 

Second, PDPM’s reduction of financial incentives to provide therapy is so aggressive – providing higher reimbursement to SNFs that provide fewer types of therapy to residents over a shorter period of time or no therapy at all – that it actually encourages facilities not to provide therapy.  Jimmo’s Court-ordered mandate to cover maintenance therapy is completely ignored.

Finally, PDPM does not maintain simplicity, CMS’s third goal.  PDPM is a highly complex system.  For example, instead of Resource Utilization Group’s two case-mix categories (nursing and rehabilitation), PDPM establishes five case-mix adjusted components (three of which are also adjusted according to a variable per diem adjustment) and adds these components to the non-case-mix adjusted component to calculate a daily rate for each resident in a Part A stay.  The system is far more complicated than the current reimbursement system.

  1. Criticism of Medicare’s Prospective Payment System Is Longstanding, but PDPM Does Not Address These Criticisms

Ever since the new prospective payment system for Medicare coverage of SNFs was first implemented in 1998, the system has faced ongoing criticism.  Critics, including the Medicare Payment Advisory Commission[4] and the Department of Health and Human Services’s Office of Inspector General,[5] report that the reimbursement system encourages over-utilization of therapy services, provides insufficient payment for nursing services, and provides inaccurate payment for non-therapy ancillary services (chiefly prescription drugs).  

Over the past 20 years, the Government Accountability Office, the HHS Inspector General, and the Medicare Payment Advisory Commission have documented abuses in therapy, such as facilities’ inappropriately classifying large percentages of their residents as needing the highest, most expensive levels of therapy and facilities’ identifying a high number of minutes of therapy during the reference period and then providing fewer actual minutes of therapy to residents.  Numerous multi-state nursing home chains have settled False Claims Act cases with the Federal Government over allegations of false billing of Medicare for inflated therapy claims.  

Insufficient nurse staffing levels in SNFs and the poor quality of care that results have also been repeatedly documented in the research literature.  The STRIVE nurse staffing data, which are now more than a decade old, were based, even then, on practices that existed in facilities, not on the standard of care required by the 1987 Nursing Home Reform Law and its implementing regulations.

CMS contracted with Acumen to develop a new reimbursement system to replace the current system.  The Center assumed that the purpose of the four Technical Expert Panels convened by Acumen and CMS, on all of which the undersigned Center attorney was a member, and now, of the NPRM, would be to develop a new system for reimbursing SNFs under Medicare that would both respond to problems identified since the prospective payment system was first implemented and move the reimbursement system in a new and substantially different direction.

Unfortunately, the NPRM, which is based on Acumen’s work (as was RCS-I), does not correct these long-identified problems in the reimbursement system, except for its extreme over-correction of therapy overpayments.

The Center’s second assumption was that the TEPs would seek to incorporate new understandings of the care and services that are currently coverable under Medicare – for example, recognition of Jimmo v. Sebelius, whose Court-approved settlement on January 24, 2013 confirmed that Medicare covers nursing and therapy services that are necessary to maintain a resident’s status and to prevent a resident’s avoidable decline or deterioration when the services must be provided by professional nurses or therapists (as opposed to paraprofessional staff).[6]  Too many providers have believed, and continue to act on the belief, that Medicare covers skilled nursing and therapy services only if a resident is expected to improve.  Jimmo has obvious implications for Medicare payment policy that the NPRM fails to implement in the proposed program redesign.

A third assumption was that the TEPs would recognize and implement the statutory directive to pay for the services that SNFs are required to provide.  In October 2016, CMS promulgated final rules establishing revised RoPs for SNFs.[7]  New requirements that are included in the revised RoPs should be incorporated into the new reimbursement system.  Again, Acumen did not describe that purpose as within its scope of work and the NPRM fails to reflect any of the new or revised standards of care that nursing facilities are required to meet in order to be eligible for reimbursement by the Medicare and Medicaid programs.

As described at the TEPs, Acumen’s data-driven review was focused on identifying new payment policies and approaches that would able to more accurately predict residents’ current use of nursing, therapy, and non-therapy ancillary services.  The NPRM reflects this limited vision.

The Center’s final concern was that delivery system reforms and ongoing payment changes – such as bundling demonstrations, Accountable Care Organizations, and other approaches being tested by CMS that require more coordinated care for Medicare beneficiaries as they move within and through the health care system – make the NPRM’s focus on SNF reimbursement, in isolation, seem backward-looking and obsolete, not forward-looking.  At the very least, it is not apparent how PDPM accommodates the reimbursement and delivery system changes that are otherwise under consideration and rapidly being implemented.

  1. PDPM Undermines Therapy Services for SNF Residents

As described in detail in the NPRM (and illustrated in the chart below), PDPM dramatically changes the financial incentives for SNFs.[8]  Under PDPM, SNFs receive higher reimbursement if they provide 15 or fewer days of Medicare coverage and only one form of therapy (not three).  Medicare reimbursement is also higher if 50-75% of a SNF’s Medicare days are billed as non-rehabilitationIn contrast, Medicare reimbursement is lower for SNFs providing care to the oldest residents (age 90+), to residents receiving three types of therapy, and to residents having 31 or more days of care paid by Medicare.

As the charts below demonstrate, the changes made by PDPM are, in some instances, even more antithetical to coverage than RCS-I.  For example, reimbursement for residents 90 years and older is more sharply cut under PDPM than under RCS-I; reimbursement for residents whose qualifying inpatient hospital stay is three days is cut more sharply under PDPM than under RCS-I (although hospital lengths of stay are continuing to decline); and reimbursement for residents not receiving any physical therapy is considerably higher under PDPM (40.9%) than under RCS-I (24.2%).

Impact Analysis, Resident-Level[9]

Resident characteristics

Higher reimbursement

% change PDPM

% change RCS-I

Lower reimburse-
ment

% 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’s identification of the impact of PDPM on reimbursement rates for facilities is also troubling. 

Impact Analysis, Facility-Level[10]

Provider characteristics

Higher reimbursement

Percentage change, PDPM

Percentage change, RCS-I

Lower reimbursement

Percentage change, PDPM

Percentage 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%

 

By paying lower Medicare reimbursement rates for residents receiving more therapy and higher rates for residents who receive one form of therapy or no therapy at all, PDPM effectively ensures that residents will receive little, if any, therapy in SNFs.  Since SNFs are a major post-acute provider for Medicare beneficiaries who need rehabilitation, PDPM plays havoc with beneficiaries’ ability to get the rehabilitation they need when they are discharged from the hospital to a SNF.

  1. PDPM Ignores the Court-Ordered Settlement in Jimmo, Which Confirms Coverage of Maintenance Therapy in SNFs

Although PDPM undermines all therapy services for SNF residents, it is particularly devastating for maintenance therapy.  On January 24, 2013, Chief Judge Christina Reiss of the federal District Court in Vermont approved a nationwide Settlement, negotiated by a class of Medicare beneficiaries, who challenged Medicare’s “improvement standard,” and the Federal Government.  The Settlement confirms that the Medicare law and regulations provide coverage of maintenance therapy services in SNFs (and also home health and outpatient therapy) if such therapy is needed “to maintain the patient’s current condition or to prevent or slow further deterioration . . . so long as the beneficiary requires skilled care for the safe and effective performance of the program.”[11]  On February 16, 2017, the Court issued an additional order and approved a Corrective Statement that CMS was required to reproduce in full on the dedicated webpage that the Court ordered CMS to establish.  The Corrective Statement says, in part, “The Jimmo Settlement may reflect a change in practice for those providers, adjudicators, and contractors who may have erroneously believed that the Medicare program covers nursing and therapy services under these benefits only when a beneficiary is expected to improve.”[12]

To the extent that SNFs are required to change their practices to provide maintenance therapy to residents for whom it is medically necessary, the Medicare reimbursement system must reflect these therapy services.

At the third TEP, however, Acumen staff indicated that they would incorporate Jimmo only if they had hard data documenting which facilities properly implement the Settlement and how much such implementation costs.  Since that task was impossible to meet, Acumen’s position was that the requirements of Jimmo would not be included in the proposed system, but could be added at a later time, if and when the reimbursement system is further revised.  Accordingly, the NPRM reflects Acumen’s failure to incorporate Jimmo. 

But Jimmo is in effect now – the federal District Court approved the settlement more than five and a half years ago – and the Settlement needs to be recognized in the Medicare reimbursement system, both now and going forward.  PDPM ignores the Jimmo mandate and fails to ensure that residents’ needs for maintenance therapy are met, in compliance with the Court mandate. 

  1. PDPM Allows Facilities to Use Concurrent and Group Therapy

CMS proposes to allow facilities to provide up to 25% of therapy services to a resident as either concurrent or group therapy, or both.[13]  Under concurrent and group therapy, a single therapist  works with multiple residents.  In concurrent therapy, the residents work on different therapeutic activities, while in group therapy, the therapeutic activity is the same for all residents in the group.  Until CMS limited the billing for concurrent and group therapy, facilities were allowed to bill 100% of a therapist’s time to each member in the group – allowing for high number of minutes for each resident, and accordingly, high Medicare rates.  The abuse of concurrent and group therapy is a major cause of the overbilling for therapy that has been challenged in numerous False Claims Act lawsuits.

In the NPRM, CMS acknowledges that its policy changes requiring allocation of a therapist’s time among the residents in a group have led to tremendous reduction in facilities’ billing for concurrent or group therapy.  CMS reproduces a table that appeared in the FY 2014 SNF PPS rule:

Mode of Therapy Provision[14]

Mode of therapy

Strive

FY 2011

FY 2012

Individual

74%

91.8%

99.5%

Concurrent

25%

  0.8%

  0.4%

Group

<1%

  7.4%

  0.1%

CMS still recognizes the therapeutic value of individual therapy:  “Although we recognize that group and concurrent therapy may have clinical merit in specific situations, we also continue to believe that individual therapy is generally the best way of providing therapy to a resident because it is the most tailed to that specific resident’s care needs.”[15]

Nevertheless, CMS proposes to allow facilities to bill up to 25% of a resident’s therapy time to concurrent or group therapy.  An abrupt increase of such therapy will inevitably follow, with no benefit to residents but a tremendous financial benefit to facilities.

Therapy providers are already preparing to increase their use of group and concurrent therapy, seeing the financial benefit to them of such “cost-effective” therapies.[16]

  1. PDPM’s Front-Loading Payments Creates Financial Incentives to Reduce the Benefit Period

Based on Acumen’s finding that physical therapy/occupational therapy costs are generally higher and non-therapy ancillary costs are very high at the beginning of a resident’s stay, PDPM “front loads” payments – that is, it pays higher rates at the beginning of a resident’s stay, rather than a consistent rate for each day in the assessment period.  The proposed system then adjusts rates downward on successive days for three of the case-mix adjusted categories (physical therapy, occupational therapy, nonancillary services), under what CMS calls the “variable per diem adjustment schedule.” 

As Avalere staff acknowledged at the fourth TEP, front-loading payments creates financial incentives for SNFs to provide fewer days of covered care for Medicare beneficiaries – i.e., shorter lengths of stay.  The result of front-loading is, inevitably, a reduced benefit for beneficiaries. 

Even now, few nursing home residents receive the full 100 days that are authorized in the benefit period; the average length of a Medicare-covered stay for a beneficiary in 2015 was 26.5 days.[17]  Front-loading payments under PDPM encourages the Medicare benefit to be reduced even further.  Reimbursement policy reduces the Medicare coverage that is authorized by law by creating financial incentives to shorten residents’ Medicare-covered lengths of stay.

  1. PDPM’s Elimination of Assessments and Reliance Only on an Initial Assessment and  “Significant Change” Assessments Creates Financial Incentives for Fraud

CMS proposes eliminating the multiple assessments that are currently required for Medicare reimbursement – days 5, 14, 30, 60, and 90 – and using only the 5-day assessment and the “significant change” assessment (which is otherwise required for all residents, regardless of payment source).  This change means that, in the absence of a resident’s significant change or new assessment called Interim Payment Assessment,[18] the assessment category remains constant after the initial 5-day assessment and does not reflect changes in the resident’s actual needs, whether these needs increase or decrease.  Downward adjustments in payment during the course of a resident’s stay reflect only the variable per diem adjustment schedule, not the resident’s assessed condition.

As repeatedly reported by the Inspector General, Medicare overpays SNFs for therapy services.[19]  

Moreover, SNFs already “game” the assessment process by identifying high therapy needs during the assessment reference period and then failing to provide the therapy services that the assessment calls for.  The U.S. Attorney for the District of Massachusetts described the practice in January 2016, announcing the settlement of a False Claims Act case against RehabCare, then a part of Kindred Healthcare, and four skilled nursing facilities:

“Ramping,” i.e., during the period prior to October 1, 2011, boosting the amount of reported therapy during so-called “assessment reference periods,” thereby causing and enabling nursing facilities to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods when the nursing facilities were not required to report to Medicare the amount of provided therapy;[20]

PDPM’s elimination of all assessments but the initial 5-day assessment and any “significant change” assessment exacerbates the already significant problem of gaming.  More fraud is inevitable.

  1. PDPM Continues Inadequate Payments for Nursing, Resulting in Continued Understaffing

The single most critical factor for high quality of care and high quality of life for residents is appropriate nurse staffing, including both professional and paraprofessional nursing staff.  Most nursing facilities are inadequately staffed and the problem has existed for decades.  CMS’s own report in 2001 documented that more than 90% of facilities fail to have sufficient nursing staff either to prevent avoidable harm or to meet some of the standards of the 1987 Reform Law.[21]  PDPM does not correct the problem to ensure that SNFs employ sufficient numbers of well-trained professional and paraprofessional staff to fully meet residents’ needs. 

As Professor Charlene Harrington of the University of California San Francisco wrote in her June 12, 2017 letter to CMS on the ANPRM, using only nurse staffing data from residents who are in a non-rehabilitation Resource Utilization Group category (approximately 8% of residents in a Part A stay) does not accurately predict nursing needs for all residents.  Professor Harrington also rejected using STRIVE data, criticizing flaws in STRIVE’s design and data collection efforts.  The Center endorses Professor Harrington’s comments and recommendations as equally true for PDPM.

The NPRM shows that reimbursement for nursing services continues to be inadequate under PDPM.  To calculate 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.[22]

Conclusion

The proposed revision to Medicare reimbursement for SNFs dramatically alters the Medicare benefit, encourages less (or no) therapy and shorter Medicare-covered stays, ignores the mandate of Jimmo, encourages gaming of therapy and fraud, and does not improve nurse staffing levels. 

The Center urges CMS to reject the model of PDPM and to develop a new reimbursement that pays SNFs to provide the high quality of care that is required by the Nursing Home Reform Law and Jimmo.

Other Issues in NPRM

The Center submits comments on an additional issue in the NPRM, the Quality Reporting Program.

Last year, CMS proposed to adopt four functional outcome measures that were developed for inpatient rehabilitation facilities (IRFs) for use in the SNF QRP.  The Center understands that the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) requires the development of SNF QRP and that CMS’s implementation of the IMPACT Act has considered adopting measures from other settings that have already been endorsed by the National Quality Forum (NQF).

In these proposed rules, CMS now proposes to begin publicly displaying the four functional outcome measures that NQF had already endorsed for inpatient rehabilitation facilities (IRFs)

  1. IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients (NQF #2633) 
  2. IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634)
  3. IRF Function Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635)
  4. IRF Function Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636)[23]

CMS’s entire discussion of these four measures last year focused on improvement as the sole goal of rehabilitation in SNFs (E.g., “Given that the primary goal of many SNF residents is improvement in function, . . .,” 82 Fed. Reg. 21048).[24]   While improvement is the goal of rehabilitation services for some SNF residents, it is not the goal for all residents receiving rehabilitation in a Medicare-covered Part A stay.  Some SNF residents need rehabilitation services in order to maintain their function and to prevent or slow their decline or deterioration.  By proposing only improvement measures in the SNF QRP, CMS is undermining the maintenance coverage standard of care that is required by the Medicare law and regulations and confirmed by the Federal District Court of Vermont in Jimmo in January 2013.

Moreover, some SNF residents do not need rehabilitation serves at all and qualify for Medicare Part A coverage because of their need for skilled nursing care seven days a week.  Using only improvement measures in the SNF QRP negates the importance of skilled nursing services as an independent basis for Part A coverage in a SNF.

In January 2013, in a nationwide class action that she had certified, Chief Judge Christina Reiss of the Federal District Court in Vermont approved a Settlement confirming that Medicare covers maintenance services in SNFs (and also in home health and outpatient therapy services) that are needed to maintain residents’ function and to prevent or slow residents’ decline or deterioration when those services must be provided by professional therapists in order to be safe and effective.[25] 

Inpatient rehabilitation hospitals (IRHs) (also known as inpatient rehabilitation facilities, IRFs) are also part of the Jimmo Settlement, but the federal standard for them is slightly different.  Since an explicit goal of IRHs/IRFs is improving patients’ functioning,[26] the Jimmo Settlement identifies a separate goal for IRFs that is different from the maintenance standard of care applicable to other providers included in the lawsuit.  Jimmo explicitly provides that coverage cannot be denied in an IRH/IRF “(1) because a patient could not be expected to achieve independence in the domain of self-care or (2) because a patient could not be expected to return to his or her prior level of functioning.”[27] 

The different standard of care in IRHs/IRFs means that the goals for IRHs/IRFs cannot be adopted for SNFs unless CMS appropriately modifies thegoals and, at the very least, also adds at least one measure for SNFs for maintenance coverage.

The four proposed functional outcome measures that CMS proposes posting in the SNF QRP reflect improvement goals, but fail to include any maintenance goals.  The Center is concerned that adopting the four IRH/IRF functional outcome measures for SNFs sends the message to SNFs that they will be judged solely on whether they improve residents’ functioning, not on whether they also meet residents’ maintenance or nursing goals.

Recommendation:  CMS must add at least one maintenance measure to the measures in the SNF QRP to reflect the maintenance requirements that are recognized in, and mandated by, the Jimmo Settlement.  CMS must delay posting the improvement measures until it has maintenance measures that it can implement simultaneously with the IRH/IRF-based improvement measures.  Finally, CMS must also add at least one nursing measure. 

Thank you for the opportunity to submit comments.

Toby S. Edelman
Senior Policy Attorney

 


[1] 82 Fed. Reg. 20980, 20984 (May 4, 2017).
[2] 42 U.S.C. §1395 i-3(a)-(h), 1396r(a)-(h), Medicare and Medicaid, respectively.
[3] 81 Fed. Reg. 68688 (Oct. 4, 2016).
[4] 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.
[5] 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).

[6] Jimmo Settlement ¶6.a (Jan. 24, 2013).
[7] 81 Fed. Reg. 68688 (Oct. 4, 2016).
[8] 83 Fed. Reg. 21018, 21075-21079 (May 8, 2018).
[9] 83 Fed. Reg. 21018, 21075-21077, Table 37.

[10] 81 Fed. Reg. 21018, 21077-21079, Table 38.
[11] Jimmo Settlement ¶6.a (Jan. 24, 2013).
[12] The Corrective Statement is available at http://www.medicareadvocacy.org/medicare-info/improvement-standard/.
[13] 83 Fed. Reg., 21066-21068.
[14] 83 Fed. Reg., 21066, Table 36 (reproduced from FY 2014 SNF PPS Proposed Rule, 78 Fed. Reg. 26464).
[15] 83 Fed. Reg. 20166.
[16] Maggie Flynn, “Revenue Will Decline Under New Model, But Nimble Rehab Providers Can Thrive,” Skilled Nursing News (May 28, 2018), https://skillednursingnews.com/2018/05/revenue-will-decline-new-model-nimble-rehab-providers-can-thrive/
[17] Medicare Payment Advisory Commission (MedPAC), A Data Book: Health Care Spending and the Medicare Program, 114, Chart 8-4 (June 2017), http://medpac.gov/docs/default-source/data-book/jun17_databookentirereport_sec.pdf?sfvrsn=0
[18] 83 Fed. Reg., 21063.
[19] See, e.g., Office of Inspector General, The Medicare Payment System for Skilled Nursing Facilities Needs to Be Reevaluated, OEI-02-13-00610 (Sep. 30, 2015), https://oig.hhs.gov/oei/reports/oei-02-13-00610.pdf; Office of Inspector General, Questionable Billing by Skilled Nursing Facilities, OEI-02-09-00202 (Dec. 2010). http://www.oig.hhs.gov/oei/reports/oei-02-09-00202.pdf.
[20] U.S. Attorney, District of Massachusetts, “United States Recovers Over $133 Million For Fraudulent Nursing Home Therapy Claims” (News Release, Jan. 12, 2016), https://www.justice.gov/usao-ma/pr/united-states-recovers-over-133-million-fraudulent-nursing-home-therapy-claims
[21] CMS, Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes, Phase II Final Report (Dec. 2001), http://theconsumervoice.org/uploads/files/issues/CMS-Staffing-Study-Phase-II.pdf.  Phase II, Volume 1 (Mar. 2002), https://phinational.org/research-reports/report-congress-appropriateness-minimum-nurse-staffing-ratios-nursing-homes-phase-0; Phase II, Volume 2 (Mar. 2002), https://phinational.org/sites/default/files/clearinghouse/PhaseIIVolumeIIofIII.pdf; Phase II, Volume 3 (Mar. 2002), https://phinational.org/sites/default/files/clearinghouse/PhaseIIVolumeIIIofIII.pdf
[22] 83 Fed. Reg. 21018, 21059.
[23] 83 Fed. Reg., at 21084. 
[24] See 82 Fed. Reg. 21047-21058.

[25] Jimmo v. Sebelius, Case No. 5:11-cv-17 (D. Vt., Jan. 24, 2013). 
[26] See 42 C.F.R. §412.622(a)(3)(ii); Medicare Benefit Policy Manual, CMS No. 100-02, Chapter 1, §110.3, https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf (scroll down to page 33).
[27] Jimmo Settlement ¶6.

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