Breaking News on Medicare Regulations for the Rehab Industry

SNF Final Rule for 2010 is Released - July 31, 2009

On Friday, July 31st CMS released the SNF Final Rule for 2010 which is slated for publication in the Federal Register on August 11, 2009. CMS issued a Press Release with the major highlights including:\

• Payments to Medicare skilled nursing facilities to be reduced by $360 million, or 1.1 percent lower than payments for FY 2009.   This adjustment to nursing facility payments is an effort to rebalance an earlier adjustment to the case-mix indexes (CMIs) and better align Medicare payments with costs.
• Establishes a revised case-mix classification methodology (RUG-IV) and implementation schedule for FY 2011, reflecting updated staff time measurement data derived from the recently completed Staff Time and Resource Intensity Verification (STRIVE) project;
• Includes information on the transition to the Minimum Data Set, Version 3.0 (MDS 3.0) redesigned nursing home resident assessment instrument, including an implementation schedule; and
• Discusses comments CMS received on a possible new rate component to account for the use of non-therapy ancillaries (as recommended by MedPAC), and on a possible new requirement for the quarterly reporting of nursing home staffing data.

According to NARA lobbyist George Olsen, " The final rule for the FY 2010 payment updates to the Skilled Nursing Facilities Prospective Payment System was published last Friday (July 31, 2009). This rule provides for a net 1.1% reduction to SNF payment rates. The cut consists of a 2.2% market basket increase less  3.3% for recalibration of the case-mix indices.

"According to CMS, the recalibration reflects unexpected increases to total spending caused by greater than forecast utilization of higher payment resource utilization groups. CMS contended that nine new RUGs which were put in place in 2006 were being utilized at a 30 % rate as opposed to 19% which CMS had anticipated. As you may recall, the addition of the new RUGs was supposed to be budget neutral so CMS had to reduce the payment rate to compensate for the higher intensity.

The final rule also included a revised case-mix system predicated on the STRIVE study (Staff Time and Resource Intensity Verification)."

The Final Rule can be accessed on the Federal Register website.

 

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