Harmony Healthcare International (HHI) Blog

RCS-1 (Resident Classification System Version 1): Questions and Answers

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C.A.R.E.

Compliance • Audits/Analysis • Reimbursement/Regulatory • Education/Efficiency


Answers on Business Folder in Multicolor Card Index. Closeup View. Blurred Image. 3d Render..jpegThank you for the record breaking attendance at the “Free Key Friday” monthly webinar (3rd Friday of the month) last week 2.9.18. The webinar spurred multiple questions that are beneficial to share with all of our blog subscribers. 

  1. Is this new classification for all states nationwide? 
  • Yes, the Resident Classification System 1 (RCS-1) is the new Federal payment system proposed to replace the current Prospective Payment System RUG IV 66 (PPS) for Medicare beneficiaries nationally.

    The new classification system is for Skilled Nursing Facilities (SNF) Medicare Part A Beneficiaries.  This is a Federal Program.  This is the proposed payment system for patients in the nursing home accessing their 100 days of the benefit. 
  1. How will the category be defined if all 3 disciplines are indicated? Will there be different criteria or limitations/restrictions? 
  • Great question! Let’s revamp the mindset.  We are accustomed to thinking about the resources rendered and the allocation of one level to the patient.  This model changes the perspective from one level to a combination of patient characteristics. 
    RCS-I Model, there are four Case Mix adjusted components:
    1. Physical and Occupational Therapy (PT/OT)
    2. Speech-Language Pathology (SLP)
    3. Non-Therapy Ancillary (NTA)
    4. Nursing
RCS-1 Part 2
  • The final payment is a sum of the grouping for each component.  Each resident is classified into one group for each of the four Case Mix adjusted components.

    In other words, each resident is classified into a PT/OT group, an SLP group, an NTA group, and a Nursing group. For each of the Case Mix adjusted components, there are many groups to which a resident may be assigned, based on the relevant MDS 3.0 data. Specifically, there are 30 PT/OT groups, 18 SLP groups, 6 NTA groups, and 43 nursing groups. 
  • The total Case Mix adjusted RCS-I per diem rate equals the sum of each of the four Case Mix adjusted components and the Non-Case Mix adjusted rate component. To calculate the total Case Mix adjusted per-diem rate, add all component per diem rates calculated in prior steps together, along with the Non-Case Mix rate component, as shown in the following equation: 

    • PT/OT Component Per Diem Rate              +
      SLP Component Per Diem Rate                +
      NTA Component Per Diem Rate                  +
      Nursing Component Per Diem Rate           +
      Non-Case-Mix Component Per Diem Rate =
      Total Case Mix Adjusted Per Diem Payment 
  • RCS-I classifies residents into a separate group for each of the Case Mix adjusted components, which each have their own associated Case Mix Indexes and per diem rates. Additionally, RCS-I applies variable per diem payment adjustments to two components, PT/OT and NTA, to account for changes in resource use over a stay. 
  • The adjusted PT/OT and NTA per diem rates are then added together with the unadjusted SLP and nursing component rates and the Non-Case Mix component to determine the full per diem rate for a given resident. 
  • The final category will be determined based on the combined score from each on the four categories, which PT/OT, ST, Nursing, and NTA (non-therapy ancillaries). The resident characteristics as coded on the completed 5-day Medicare MDS Assessment will determine a Case Mix score for Nursing, NTA, PT/OT and a separate Case Mix score for ST. 
RCS-1 On-Demand
  1. Is the “primary dx” the same as the “admission” dx? We enter both, our primary is often the therapy dx with the admission dx is the 'primary reason for hospitalization’? 
  • The primary medical condition category as coded in Section I0020 (draft MDS) is the defined as the category that best describes the reason for admission to the SNF. 
  • To determine the resident’s clinical category, select the most appropriate category from the list below based on the resident’s primary SNF diagnosis. The Primary SNF Diagnosis will be coded as the Primary Diagnosis Clinical Category Description. 
  • Indicate the resident's primary medical condition category that best describes the primary reason for admission on the MDS I0020. Indicate the resident’s primary medical condition category.
    1. Stroke.
    2. Non-Traumatic Brain Dysfunction.
    3. Traumatic Brain Dysfunction.
    4. Non-Traumatic Spinal Cord Dysfunction.
    5. Traumatic Spinal Cord Dysfunction.
    6. Progressive Neurological Conditions.
    7. Other Neurological Conditions.
    8. Amputation
    9. Hip and Knee Replacement.
    10. Fractures and Other Multiple Trauma.
    11. Other Orthopedic Conditions.
    12. Debility, Cardiorespiratory Conditions.
    13. Medically Complex Conditions.
    14. Other Medical Condition If “Other Medical Condition,” enter the ICD Code in the boxes. 
  1. Clarification please: This is RUG-IV based (MRA) and not RUG-III (MCD), correct? 
  • Nursing Group Case Mix for RCS-1 is consistent the Current Medicare Non-Rehabilitation RUG-IV categories (ES3 – PA1). 
  • The RCS-1 replaces the RUG-IV system for Medicare Part A Patients while using the same MDS with additional sections. RUG-IV variations for state Case Mix is not impacted with the Medicare MDS Assessments. 
  1. Will these changes begin Oct. 1, 18, or a later date? 
  • Projected October 1, 2018 for FY 2019. Although this may be delayed. 
  • The exact date of implementation is unclear at this point. The proposed new payment system was introduced in a Federal Register on May 4, 2017 to solicit public comment on the proposed changes which are based on the SNF Payment Models Research (SNF PMR) Project. Given SNF Payment Updates are released first as a proposed rule around the end on May each year with the Final Payment Rule released the end of July, we can anticipate additional information related to changes in the payment methodology when the payment rule is released. 
  1. Did Congress separate out PT and ST from each other regarding the Cap repeal in Feb 2018? 
  • No, the Medicare Part B Cap repeal continues to identify PT/ST and OT separately when identifying the need to submit a KX modifier on claims for any beneficiary services furnished over $2,010 annually for PT and SLP services combined, and over $2,010 annually for OT services separately. This modifier is being used as an attestation of medical necessity. Claims over $2,010 annual thresholds will be denied for noncompliance with this coding requirement. 
  • CMS will restore a targeted medical review program for a limited number of claims over a $3,000 annual threshold.  Congress authorized a $5 million annual limit for CMS to conduct limited post-pay medical review, and only on claims that meet specific targeting criteria (such as a pattern of high costs within similar patient populations or similar types of providers).  The law prohibits recovery audit contractors from performing these reviews.  In recent years, CMS has used a Supplemental Medical Review Contractor (SMRC) to conduct these reviews, and we will update you as CMS begins to implement the new law. 
  1. Where does the cost of medication/pharmacy factor in? 
  • Special Care High and Clinically Complex continue to use IV fluids and IV medications for classification. All-inclusive with all other resident classification.  
  • The coding of IV fluids in Section K will remain unchanged on the MDS coding IV fluids while a resident and while not a resident that occurred during the 7-day look back period. The coding of this item impacts 2 of the 4 groups under RCS-1, specifically the nursing and NTA groups.  With the nursing group since the current RUG-IV groups are unchanged, IV fluids received either while a resident or while NOT a resident would support a special care high category. 
  • For the non-therapy Ancillary (NTA) group only IV fluids received while a resident is considered. If Section K510A2 is coding to indicate IV fluids were received while a resident, High intensity co morbidity point are assigned (7).  If not, low intensity points are assigned (5)
  1. IV fluids; will they still have a 7 day look back to include hospital stay? 
  • Yes, for IV Fluids there is no change to the look back for “while a resident” and “while not a resident”, per the Draft MDS 3.0 guidelines. 
  1. Did I miss what NTA group for ESRD w/HD? 
  • If the resident does not qualify for the PT/OT or SLP Classification, the Nursing Component for ESRD on dialysis while a resident continues to be in the Special Care Low. It is not a specific NTA Group. 
  • HD is not included in the NTA group, except of patient with diagnosis in 18000 of Kidney transplant status 
  1. This presenter has been great. Thank you very much. Know what the base rates will be? Any idea of when they will be available? 
  • Rates are not available yet. 
  1. Is there a proposed RAI manual yet for the RCS-1? 
  • Draft MDS 3.0 for October 2018 is not released yet. However, the draft item sets are available for October 2018. 
Download MDS 3.0 Item Set Change History For October 2018 Version 1.16.0
  • The revisions to the MDS include the new Section I item to indicate the primary diagnosis category and contains a number of additional items to be coded in Section GG and new item N2005 related to Medication reconciliation, which will be used in the calculation of the SNF QRP outcome based measures that were finalized in the FY2018 Final Rule released in July 2017.
  • The Final MDS item sets are expected to be released around the end of March (approximately 6 months prior to implementation). The revised version of the RAI User’s Manual will be available the end of August 2018. 
  1. What MDS changes will we see? 
  • The proposed draft item sets identify addition of items in:
    • Additional functional items in Section GG
    • Section I - primary medical condition category
    • Section N - N2001. Drug Regimen Review. N2003. Medication Follow-up. N2005. Medication Intervention. 
  • See above. The primary change to the MDS item for RCS 1 is to section I diagnosis. 
  • The bigger impact on the MDS will be related to the Medicare Assessment scheduling with a significant reduction in the number of assessments required for payment. Under the RCS-1 payment system the 5-day Medicare assessment will determine the payment category for the entire episode of care, with some limited exceptions no additional assessments assessment will be required. 
  • For Medicare Part A residents who are discharged from and readmitted to the same SNF within 3 days, this would be a continuation of the previous stay and a new 5-day would not be completed. In this case, the classification from the previous stay would continue upon readmission to the SNF.  In situations where the resident is readmitted more than 3 days after discharge from the SNF, this would be considered a new stay.  The completion of a 5-day MDS after the return would be required and result in a new classification group for this stay. 
  1. If there is a nursing score but no therapy, will we be able to give a NOMNC (Notice of Medicare Non-Coverage)? 
  • The NOMNC (Notice of Medicare Non-Coverage) is given when the facility makes the determination with the beneficiary no longer meets skilled coverage criteria. This determination is based on the care and services provided not the payment category. 
  • If there is a skilled level for nursing, one would not deny the Medicare benefit or submit a NOMNC (Notice of Medicare Non-Coverage). The patient qualifies for skilled for nursing.

    These are the 4 pillars:
    • Inherent Complexity
    • Observation and Assessment
    • Overall Management of Care Plan
    • Teaching and Training 
  • Medicare skilled criteria as outlined in Chapter 8 of the Medicare Benefit Policy Manual are unchanged by the changes in the Medicare benefit methodology. Just like today, in order to be covered under Medicare in the SNF, the patient must receive medically necessary skilled level of care on a daily basis.  This includes either skilled therapy, skilled nursing or a combination of skilled nursing and therapy services.  The RCS-1 group will determine the daily per diem rate of payment for Medicare beneficiary who meet skilled criteria. 
  1. Will the CMI rates continue to be broken down into rural and urban? 
  • Yes 
  1. How do you see therapy staffing needs changing if the MDS is the Revenue driver vs. the Rehab category? 
  • We anticipate that the model of care for therapeutic services will undergo changes in the modes of therapy i.e., treatment approach. The current reimbursement system squelches effective methods of services including group therapy. As an Occupational Therapist who studied under elite professionals who dedicated their life work to the study of group dynamics, (such as Sharan Schwartzberg, Tufts University) the lack of group therapy to the senior population is a major disservice with negative consequences to the current formula of PPS. 

    The intent of therapy services within the SNF setting will remain under the overarching goals of OBRA 87 guidelines: 

    OBRA ’87 regulations require facilities to provide services to “attain and maintain highest practicable physical, mental and psychosocial well-being” of every resident. The medical regimen must be consistent with the resident's assessment (performed according to the uniform instrument known as the MDS) and Interdisciplinary Care Plan. Any decline in the resident's physical, mental or psychological well-being must be demonstrably unavoidable. (483.25).

    In other words, it is not acceptable to arrive at a skilled nursing facility and decline in function 6 months later.  
  • CMS continually expands the Quality Report Program. Outcome based QRP Measures for Medicare PAC beneficiaries via therapeutic interventions is an important driver of functional improvement.

    In upcoming webinars and blog posts, Harmony Healthcare International (HHI) will provide you with more information related this question as the discussion is critical to the healthcare provider’s clinical, financial, operational and regulatory viability. The proposed payment structure places less emphasis on minutes and more focus on quality outcomes and efficiencies.   
  1. Is there anything in the regulations that does not allow us to do restorative and therapy at the same time? For example, restorative does an upper body ADL and OT does a LB ADL. Under RCS 1 could you be reimbursed for both as long as the services provided by therapy were distinctly different and represented the skilled need provided? 
  • Yet another fabulous question to end on. First, we must define Restorative Nursing.

    Restorative nursing care refers to those nursing interventions that promote the resident’s ability to live as independently and safely as possible.  This program actively focuses on achieving and maintaining optimal physical, mental and psychosocial function.

    The purpose of Restorative Programs is to increase the patients’ independence, promote safety, preserve function, increase self-esteem, promote improvement in function and minimize deterioration.  Specific patient goals, objectives and interventions need to be measurable.  A Care Plan outlining the program is required.

    In general, Restorative Nursing Programs are initiated when a resident is discharged from formalized Physical, Occupational, or Speech Rehabilitation Therapy services.  A resident may also receive Restorative Services when the need arises during the course of a custodial stay i.e., when the patient is not a candidate for a more formalized therapy program.

    Restorative Nursing is a nursing function and does not require a physician’s order (although obtaining an order is highly recommended by Harmony Healthcare International (HHI).  In addition, the program does not require oversight by a licensed therapist.  However, establishment of a close working relationship with PT/OT and SLP for optimal patient outcomes is beneficial.

    To remain in a Restorative Nursing Program, the resident must maintain or retain their level of functioning.  In addition, nursing rehabilitation or restorative care must meet all of the following criteria:
    • The individual problem must be clearly identified (ex. AROM, splint or brace assistance, transfer, walking, grooming, etc.).
    • Measurable goals (objectives) and measurable interventions (actions) are clearly documented (care planned) for each individual program. (In order to be measurable, it must have a particular unit of measurement attached to it, e.g., a time-scale, a weight or a distance and it must be measured against a particular goal or standard). Goals should be specific, reasonable, and attainable within a prescribed time. Short-term goals should be seen in the context of long-term achievement.
    • A periodic evaluation by a licensed nurse is present in the resident’s record for each individual Restorative Program.
    • Nurse assistants/aides are trained in the techniques that promote resident involvement in the activity.
    Now, to the answer to your question: 
  • Yes, there are instances in which restorative and skilled therapy can be delivered at the same time.No, the regulations do not specify they are mutually exclusive.
  • Reimbursement varies under both systems. To answer this question with precision, I would need to review the individual case. 

Closing Remarks 

Once again thank you for all of your emails, posts and feedback!!  I absolutely relish in the discussion and questions.  These are intellectually challenging times that only come around every couple of decades!!!  Yes, it can be stressful….. but try and breathe. Identify your coping mechanism…. running, yoga, coffee, Netflix, Christmas in a Cup, a hug from your BFF, purpose, play and perspective.

Harmony Healthcare International (HHI) is available to assist with any questions or concerns that you may have. You can contact us by clicking here.  Looking to train your staff?  Join us in person at one of our our upcoming Competency/Certification Courses.  Click here to see the dates and locations. 


 Join us November 1st & 2nd, 2018 at Mohegan Sun Resort for harmony18
7th Annual LTPAC Symposium
Click Here to Register
harmony20 October 29-30 2020 Encore Boston Harbor

Topics: RCS-1


Kris Mastrangelo, OTR/L, LNHA, MBA

WRITTEN BY

Kris Mastrangelo, OTR/L, LNHA, MBA
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