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Centers for Medicare and Medicaid Services (CMS) Proposed Rule FY2015

Posted by Kris Mastrangelo, OTR/L, LNHA, MBA on Mon, Jun 09, 2014

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Edited by Kris Mastrangelo

CMS Proposed Rule FY2015:  On May 6,2014, the Centers for Medicare and Medicaid Services (CMS) issued a Proposed Rule [CMS-1605-P] under the Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities. The Proposed Rule illustrates the proposed Fiscal Year 2015 Medicare payment rates for skilled nursing facilities (SNFs).  The Proposed Rule outlines an estimated increase in SNF payments of 2.0%.  This estimated increase is attributable to the 2.4% market basket increase, reduced by the 0.4% point multifactor productivity adjustment required by law.  As the actual amount of change in the market basket index at -0.3 did not exceed the 0.5 percentage point threshold, the payment rates for FY2015 do not include a forecast error adjustment. 

In addition, the Proposed Rule includes a proposal to adopt the most recent Office of Management and Budget (OMB) statistical area delineations to identify a facility’s urban or rural status for the purpose of determining which set of rate tables would apply to the facility and to determine the SNF PPS wage index including a proposed one year transition with a blended wage index for all providers for FY2015. 

The Proposed Rule also proposes a revision to policies regarding the Change of Therapy OMRA.  The Change of Therapy (COT) OMRA was initiated on October 1, 2011 to capture changes in the therapy services provided to a SNF patient during a rolling 7 day observation period.  The COT OMRA is completed whenever the intensity of therapy delivered or other therapy qualifiers such as the number of days of therapy the patient received in the 7 day observation period changes so that it does not reflect the RUG-IV classification payment for the most recent assessment used for Medicare payment.  This also applies to patients that received a level of therapy sufficient to qualify for a Therapy RUG but were classified into a Nursing RUG due to index maximization. 

However, there are cases when the patient does not meet the qualifications for a Therapy RUG-IV classification due to distinct days of therapy (less than 5 distinct days) or other qualifiers.  In these cases, the facility must wait until the next scheduled assessment, the 14 day, 30 day, 60 day or 90 day PPS assessment to capture the therapy services.  Providers are unable to capture the increased therapy services provided to the patient to ensure accurate payment for the services provided, which was the actual purpose of the COT OMRA.

The Proposed Rule for FY2015 would revise the existing COT OMRA policy to permit providers to complete a COT OMRA for a patient that is not currently classified into a RUG-IV therapy group.  This would apply only in rare cases where the patient had:

  • Qualified for a RUG-IV Therapy category on a prior assessment during the current Medicare Part A stay.
  • And there was no discontinuation of therapy services between day 1 of the COT observation period for the COT OMRA that classified the patient into the current Non-Therapy RUG category and the ARD of the COT OMRA that would reclassify the patient into a Therapy RUG category. 

This Proposed Rule would allow the use of a COT OMRA to re-classify a patient into a Therapy RUG but may not be used initially to classify a patient into a Therapy RUG.  

The Proposed Rule includes a discussion of the SNF therapy payment research currently contracted with Acumen, LLC and the Brookings Institution to identify potential alternatives to the existing methodology used to pay for therapy services received under the SNF PPS.   The first phase of this project has been completed including a literature review, stakeholder outreach, supplementary analysis and a comprehensive review of options for a viable alternative to the current therapy payment model.  A report outlining the most promising and viable options that CMS plans to pursue is available at the CMS website at:


The Proposed Rule for FY2015 includes specific provisions pertaining to the imposition and collection of Civil Money Penalties (Section 6111 of the Affordable Care Act) with an invitation to comment on the proposed changes.

In the FY2014 SNF PPS Final Rule, CMS presented data comparing RUG utilization metrics including the Case Mix distribution for the RUG-IV Rehabilitation categories.  It was observed that the percentage of billed days of service for the RU groups increased from 44.8% in FY2011 to 48.6% in FY2012 while all other RUG categories remained stable or declined.  This data has been updated to demonstrate that the percentage of RU RUG groups has increased in FY2013 to over 50%.  The second identified trend highlighted in the Proposed Rule indicates that the amount of therapy reported on the MDS is just over the required therapy minute threshold for a given RUG category.  For example, there was an increase in the number of MDS assessments that reported therapy minutes from 720 minutes to 739 minutes to capture an RU RUG category from FY2011 to FY2013. 

The Proposed Rule for FY2015 discusses accelerating Health Information Exchange in SNFs.  CMS is committed to accelerating health information exchange through the use of Electronic Health Records and other types of Health Information technology across a broader care continuum through multiple initiatives.  The Office of the National Coordinator for Health Information Technology (ONC) issued a Proposed Rule that would more easily accommodate certification of Health Information Technology in other types of health care settings not typically eligible for incentive payments under the Medicare and Medicaid EHR Incentive Programs such as long-term, post-acute, and behavioral settings. 

The Proposed Rule, in its entirety, may be found at:  https://www.gpo.gov/fdsys/pkg/FR-2014-05-06/pdf/2014-10319.pdf

This is the Proposed Rule for Fiscal Year 2015, and final edits have not yet been applied by CMS.  Public comments regarding the Final Rule will be accepted until June 30, 2014.  CMS may perform edits on the Final Rule until the implementation date.  The final Rule is scheduled for release at the end of July with implementation on October 1, 2014.

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Tags: Final Rule, Medicare, CMS, OIG, PPS, Skilled Nursing Facility

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