Harmony Healthcare Blog

FINAL RULE FY 2012: RUG DISTRIBUTION

Posted by The Harmony Team on Fri, Sep 16, 2011


Edited by Kris Mastrangelo

 

Final Rule,CMS, Kris Mastrangelo, MDS

From The Desk of Kris Mastrangelo, OTR,MBA,NHA

President and CEO of Harmony Healthcare:

The Final Rule FY 2012 forces providers to take a hard look at systems, communication and practices within the MDS and Therapy Departments.  Shorter MDS assessment windows will be less forgiving for RUG optimization.  The rolling 7 day look back requires tighter control, daily therapy minute management with immediate payment changes for intensity variations.  ADL coding will and always will be an area requiring daily focus at the patient-specific level all the way to the facility-wide systems and coding documentation tools.

But what about the rates?  CMS is adjusting the rates and leveling them off due to the “overpayment” resulting from an “incorrect projection” of the RUG utilization.  In other words, last fall (2010) CMS projected a lower usage of therapy days due to the requirement changes on concurrent therapy.  They expected that 82% of the RUG levels would be therapy versus the 92% that yielded.  To their surprise, this service delivery resulted in a much higher rate.  The projection of rates can be tricky in the long term care industry.  Yes, an 11% cut can be straight forward.  But as we budget for FY 2012, we see that the RUG distribution in a facility can significantly impact tomorrow’s results.  Financial knowledge alone limits predictability of where a facility will land in October.  Clinical insight into the RUG utilization combined with an in-depth familiarity with the facility operations (therapy staffing, productivity, space, therapy staffing patterns, MDS staffing, systems, communication, equipment and more) provides all the tools to properly predict 2012 rates.  In addition, this data is also invaluable on guiding the facility on optimizing their potential.

It is risky to simply impose this years RUG distribution into the FY 2012 rates.  Attainment of the same leveling will require more effort as a result of the above described changes.  The key is to know how to attain if not exceed this “ideal” RUG distribution.

One facility budgeted has the following data:

 Rate 2011:  $482.95

 Projected 2012 same RUG distribution:  $434.55

This is a (9.93%) decrease from 2011.

However, to mitigate this loss, analysis depicts opportunity to increase therapy productivity and a shifting of the RUG leveling.  The 2012 goal rate for this is $467.88.  This rate exceeds the 2010 rate of $429.43.

Other facilities will see a straight 11% rate deterioration, but opportunity will exist in the same areas while a heightened focus on the clinically anticipated stay will be a highly recommended avenue.  Scrutiny of a patient’s performance prior to discharge is an essential element for quality care.  Facilities across the country underestimate the barriers a patient encounters post-stay.

Harmony is currently providing analysis of historical RUG data and forecasting individual facility rates for FY 2012 with the clinical factors embedded in the Final Rule which will dictate RUG distribution.  Budgeting and goal setting for FY 2012 will require financial and clinical insight into the RUG classifications.  For a FREE detailed FY 2012 Revenue Analysis please Click the Link Below!

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Tags: Final Rule, CMS, MDS, Rug Distribution

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