What you can expect from a RUGS-based PPS
What you can expect from a RUGS-based PPS
SNFs have been there, done that
Although the Health Care Financing Admini-stration has yet to develop a modified version of the Minimum Data Set (MDS) and Resource Utilization Groups (RUGS) for rehab, providers can get an idea of what to expect based on the experience of skilled nursing facilities (SNFs). Rehab facilities are likely to receive close to the same reimbursement per patient they now receive. However, they will have to hire additional staff to handle the documentation.
The skilled nursing facilities that participated in a volunteer RUGS demonstration project were at a break-even point under RUGS for most categories of patients, says Doris B. Reinhart, principal with Chesapeake Consulting Inc., an Alexandria, VA, consulting firm. Some showed a slight decrease in some categories, she says.
The facilities in the demonstration project found they needed to add .5 to one full-time equivalency position to handle the MDS data collection, Reinhart says.
RUGS bases its reimbursement on staff time and effort, supplies, and equipment. Patients with a higher acuity and higher utilization of resources are in a higher payment category. The system rolls routine, ancillary, and capital costs into a single all-inclusive per diem rate that is adjusted for case mix.
Unlike reimbursement under TEFRA and proposed reimbursement using functional related groups in which you get a set amount for each category regardless of the resources used, under RUGS, providers will be paid for the days in which the patient receives care.
The rate may change during the patient’s stay, depending on his or her assessment. For instance, under SNF reimbursement, providers do an assessment on day five that determines the reimbursement rate for days one through 14. An assessment on day 14 determines the rate for days 15 through 30. A similar system would be put into effect for rehab. In the current version of the MDS, there are 44 categories into which a patient could fall. The category dictates payment.
In a per diem system with no cap on length of stay, there is a tendency for the length of stay to increase, says Joe W. Fleming II, JD, an attorney in Washington, DC, specializing in rehab reimbursement issues. Clinicians have felt they were not doing what they needed to do under TEFRA because of the pressure to discharge patients more quickly. They may be tempted to increase lengths of stay initially to give the patients more therapy, Fleming says.
The rehab reimbursement payment pot will be limited, however, and if lengths of stay go up dramatically, HCFA has the authority to modify payment rates to stay within budget. Cutting per diem rates would mean facilities would have to give patients less care each day, and that could increase lengths of stay. "This could lead to a downward spiral," Fleming says.
The solution would be for rehab providers to continue seeking more efficient ways of treating patients and to discharge them sooner, he says.
[Editor’s note: Fleming may be reached at (202) 872-1033.]
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