May 12, 1998, the Interim Final Rule was published presenting the SNF PPS (Prospective Payment System). It turned the industry upside down. Away with the retrospective cost based system. Away with certified distinct parts, time studies and weighing of the laundry. Instead, a MDS based payment system which touted reimbursement for resources (the higher the resources, the higher the rate of reimbursement). Within this model, there were 44 RUG levels, of which the top 26 were deemed “automatically skilled” while the lower 18 levels were “at risk for audit”. This was a proxy for the original criterion for skilled coverage (Management of Care Plan, Observation and Assessment, Teaching and Training and the nursing/therapy skills with inherent complexity). Medicare days plummeted across the country. Multiple nursing home chains declared bankruptcy. Why? Nobody understood the system and patients were readily denied benefits solely based on the MDS RUG score….even when the score was incorrectly coded. Within 18 months, the BIPA (Beneficiary and Improvement Protection Act) revised this error and the original coverage criterion was reinstated.
Fast forward to 2013, and there are now 66 RUG-IV levels, of which 14 levels fall into this lower category. At this time, these levels continue to be scrutinized by the government and can and will be a catalyst for audit.
With this type of inquiry, it is critical for SNFs to fully understand the skilled coverage criteria in relation to the RUG-IV level. An understanding I dubbed as “RUGS intimacy”. In other words, when a patient is accessing Medicare benefits, there will be an associated RUG score. That RUG score must have a relationship to the rationale for skilled services. For example, a Special Care High level (HD2) is calculated. The Medicare team identifies that daily skilled services are required for observation and assessment of signs and symptoms of exacerbation of COPD. In fact, respiratory therapy is provided 7 days per week for 20 minutes per day. These two components solidify the rationale for Medicare Part A benefits.
On the flip side, a second patient elicits a Behavioral RUG-IV score of BB1. This is a lower 14 and is a trigger for audit. Clinically, the patient is experiencing delusions and is verbally abusive to family members and staff. In addition, the patient is wandering more than usual. The Medicare team feels the patient requires the daily oversight of the licensed nursing staff, despite the lower level score. The MDS Coordinator gains further insight from the evening nurse where many of the behaviors are documented. Further discussion with floor Nurse reveals that due to the extensive wandering, the patient demonstrates difficulty breathing with visual signs of shortness of breath. An assessment reveals the patient required PRN oxygen which was applied two out of the three evenings within the assessment window.
The application of oxygen and associated care provided changes the coding on the MDS from a Behavioral Category to a Clinically Complex level, BB1 to a CB1. Now the RUG level is in an upper category. This level more clearly represents the patient’s clinical picture. This level reduces the risk of audit from agencies that comb the MDS database for claims that generate RUG-IV scores in the “Lower 14” classifications.
The above scenarios show the importance of reviewing RUG levels on all patients. Instances of lower 14 levels do occur and may be an indicator that benefits need to be denied. When these instances occur, the team needs to take a hard look at the rationale for skilled services. At this time, applying the original coverage criterion is essential.
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