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Conference Name: RUGs 53: Navigating the new payment categories from the SNF PPS FinalRule

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RUGs 53: Navigating the newpayment categories from

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presents . . .

A 90-minute interactive audioconference

Thursday, January 12, 2006

ii RUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

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iiiRUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

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iv RUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

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vRUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vi

Speaker profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii

Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Presentation by Ronald Orth, RN, NHA, RAC-C

Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25RUG III PPS Grouper Version 5.20—Case Mix Indices

Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27RUG 53 Classification System, Version 5.20

Exhibit D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29ARD Selector Worksheet

Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Contents

vi RUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

Agenda

I. Why RUG refinement

II. Introduction to nine new RUG categoriesA. Qualifiers

III. Overview of Case Mix Maximization

IV. Introduction to 5.20 grouper logic

V. Impact of Assessment Reference Date (ARD) and Activities of Daily Living (ADL) coding on RUG assignment and reimbursement

VI. CMS transition plan from 44 RUG to 53 RUG systemA. Billing purposes

Live Q&A

viiRUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

Speaker profiles

Elizabeth Petersen, moderator

Elizabeth Petersen is a managing editor with HCPro’s long-term care group. She serves as the group’s bookeditor and writes two e-zines, Long-Term Care Nursing Advisor and Ask SNFinfo.

Ronald Orth, RN, NHA, RAC-C

Ronald Orth is the owner and president of Clinical Reimbursement Solutions, LLC. He has more than 20years of experience in the healthcare field and has spent the past eight years specializing in the area ofMedicare SNF regulations and the PPS reimbursement system. Orth holds an associate degree in nursingand a bachelor’s degree in healthcare administration. He also holds a nursing home administrator’s license inthe state of Arizona.

Clinical Reimbursement Solutions offers an array of consulting services in the area of clinical reimbursement.For additional information, visit www.clinicalreimbursement.com.

Exhibit A

Presentation by Ronald Orth, RN, NHA, RAC-C

EXHIBIT A

2 RUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

1

RUGS 53: Navigating theNew Payment Categories

Clinical Reimbursement Solutions, LLCClinical Reimbursement Solutions, LLC

2

Why RUG Refinements??

• RUGs system inadequate in defining clinicalcomplexities of NH population

• Miscalculation of Medicare savings by CMS

• Increased costs since 1995 cost reports

• Some organizations ill prepared for changein reimbursement system

3RUGs 53: Navigating the new payment categories from the SNF PPS Final Rule

EXHIBIT A

3

Impact on Industry

• 9 of the top 10 nursing home organizationsfiled bankruptcy

• Represents approx. 10% of the industry

• Unable to meet contractual agreements

• Generated concern that NH placement maybecome difficult for many acute careproviders

4

Government Response

• BBRA of 1999

– Temporary increase in payment rates by 20%for 15 of the RUG classification

– 4% increase in all RUG classifications

– Mandated refinement of RUGs system orpayment system

– Caused a Case Mix Index Maximization‘Anomaly’

– Rehab Medium RUGs paid more than Rehab High

– Rehab Medium had lower Case Mix Index

EXHIBIT A


5

Government Response cont’d

• BIPA of 2000

– Requires CMS to conduct a study of alternatecase-mix classification systems for SNF PPS

– Add-on for Rehab RUGs changed from 20%to 6.7%

– 6.7% add-on to remaining RUGs

– Continuation of 20% add-on for 12 NursingRUGs implemented in 1999

Problem Solved?

6

Broken Case Mix Maximization

• SE3 had lower CMI than many of theRehab RUGs however it paid MORE.

• Proper Case Mix Maximization = higherCMI higher payment


EXHIBIT A

7

Broken Case MixMaximization cont’d

SE3 36 $374.96

RMC 37 $344.10

Lower

Weight

Higher

Payment

8

RUG Refinements 2006

EXHIBIT A


Rehabilitation

Extensive Services

Special Care

Clinically Complex

Cognitively Impaired

Reduced Phys. Funct.

Behavioral

Reduced Phys. Funct.

Behavioral

Cognitively Impaired

Clinically Complex

Special Care

Extensive Services

Rehabilitation

Rehab/Extensive

PresentPresent FutureFuture


EXHIBIT A

11

New RUG LevelsRehabilitation/Extensive ServicesRehabilitation/Extensive Services

Category ADL Score

RUX 16-18

RUL 7-15

RVX 16-18RVL 7 -15

RHX 13-18

RHL 7-12

RMX 15-18

RML 7-14

RLX 7 -18

12

New RUG Criteria

Rehabilitation Component

• Remains unchanged from current system

• Therapy projection rules remain unchanged for 5-day and return/readmission assessments

EXHIBIT A


13

New RUG Criteria cont’d

Extensive Services Component

Must have ONE of the Extensive Services

K5a IV Fluids/TPN (7-day lookback)

P1ac IV Meds (14-day lookback)

P1ai Suctioning (14-day lookback)

P1aj Trach (14-day lookback)

P1al Vent/Respirator (14-day lookback)

ANDAND……

14

New RUG Criteria cont’d

ADL Component

ADL Score must be >=7

Same as current Extensive

Services criteria


EXHIBIT A

15

Case Example

Resident received 250 minutes PT over 5days, 150 minutes OT over 5 days. IVmedications given in past 14 days, ADLscore 10.

Current RUG = RHB

New RUG = RHL (so you think!!)

Things that Make you go Hmmmmm……

16

New CMI and Hierarchy

• New system has resolved hierarchalissue

• Can be viewed as looking at two differentsystems

• 53 RUG System

• 44 RUG System

EXHIBIT A


30RLB30RLB

31SE231SE2

32RLX32RMA

33RMA33RLX

34RMB34RHA

35RHA35RMB

36RMC36RMC

37RHB37RHB

38SE338RVA

39RHC39RHC

40RVA40SE3

41RHL41RHL

42RHX42RHX

43RVB43RVB

44RML44RML

45RVC45RVC

46RVL46RVL

47RMX47RMX

48RVX48RUA

49RUA49RVX

50RUB50RUB

51RUC51RUC

52RUL52RUL

53RUX53RUX

Rural CMIRUGUrban CMIRUG

RUGIII 53 CMIRUGIII 53 CMI

Grouper Version 5.20Grouper Version 5.20

1. Resident can qualify

for multiple RUGs

2. Index Maximized –

will assign RUG

with highest CMI

3. Higher the CMI

higher the Payment

4. CMI Values 1-53

18

Case Mix Index Maximization

Mr. Smith’s 14-day MDS reveals the following:

5-days and 500 minutes of therapy

Dialysis

Short Term Memory Problem

Poor Decision Making

IV Meds

Pneumonia

Fever

ADL Score 10


EXHIBIT A

19

Case Mix IndexMaximization cont’d

Mr. Smith’s would qualify for the followingRUG Categories:

5-days and 500 minutes of therapy

(RV,RH,RM)

Dialysis (Clinically Complex)

Short Term Memory Problem/Poor Decision Making (Impaired Cognition)

IV Meds (Extensive Services)

Pneumonia (Clinically Complex)

Fever (w/pneumonia = Special Care)

20

Strategies for Success

Main Considerations

�Accurate ARD Selections

�Accurate ADL Capturing

�Capturing Hospital Services

EXHIBIT A


21

Strategic ARD Selection

On Day 5 – Can capture 325 minutes and IV Meds, ADL Score 10

Day 6 – Can capture 350 minutes, however no IV Meds, ADL score 10

Which do you choose?

22

Strategic ARD Selection cont’d

Day 5 – Can capture 325 minutes and IV Meds, ADL Score 10 = RHL (41)

Day 6 – Can capture 350 minutes, however noIV meds, ADL score 10 = RHB (37)

Although resident qualifies for the RHL RUG category,grouper will place in RML due to higher CMI score.

Difference = $60.81/day


EXHIBIT A

RUG-III Nursing Therapy Nursing Therapy Non-case Mix Non-case Mix Total

Category Index Index Component Component Therapy Comp Compo-RUX 1.90 2.25 $261.42 $233.19 $70.22 $564.83

RUL 1.40 2.25 $192.63 $233.19 $70.22 $496.04

RVX 1.54 1.41 $211.89 $146.13 $70.22 $428.24

RVL 1.33 1.41 $182.99 $146.13 $70.22 $399.34

RHX 1.42 0.94 $195.38 $97.42 $70.22 $363.02

RHL 1.37 0.94 $188.50 $97.42 $70.22 $356.14

RMX 1.93 0.77 $265.55 $79.80 $70.22 $415.57

RML 1.68 0.77 $231.15 $79.80 $70.22 $381.17

RUC 1.28 2.25 $176.12 $233.19 $70.22 $479.53

RUB 0.99 2.25 $136.21 $233.19 $70.22 $439.62

RUA 0.84 2.25 $115.58 $233.19 $70.22 $418.99

RVC 1.23 1.41 $169.24 $146.13 $70.22 $385.59

RVB 1.09 1.41 $149.97 $146.13 $70.22 $366.32

RVA 0.82 1.41 $112.82 $146.13 $70.22 $329.17

RHC 1.22 0.94 $167.86 $97.42 $70.22 $335.30

RHB 1.11 0.94 $152.72 $97.42 $70.22 $320.36

RHA 0.94 0.94 $129.33 $97.42 $70.22 $296.97

RMC 1.15 0.77 $158.23 $79.80 $70.22 $308.25

RMB 1.09 0.77 $149.97 $79.80 $70.22 $299.99

RMA 1.04 0.77 $143.09 $79.80 $70.22 $293.11

SE3 1.86 $255.92 $13.65 $70.22 $339.79

SE2 1.49 $205.01 $13.65 $70.22 $288.88

SE1 1.26 $173.36 $13.65 $70.22 $257.23

SSC 1.23 $169.24 $13.65 $70.22 $253.11

SSB 1.13 $155.48 $13.65 $70.22 $239.35

SSA 1.10 $151.35 $13.65 $70.22 $235.22

CC2 1.22 $167.86 13.65 70.22 $251.73

24

Strategic ARD Selection

On Day 5 – Can capture 325 minutes and IV Meds, ADL Score 10

Day 6 – Can capture 350 minutes, however no IV Meds, ADL score 10

Which do you choose?

EXHIBIT A


25


Day 5 – Can capture 325 minutes and IV Meds, ADL Score 10 = RHL (41)RHL (41)

Although resident qualifies for the RHL RUGAlthough resident qualifies for the RHL RUGcategory, grouper will place in RML (44) due tocategory, grouper will place in RML (44) due to

higher CMI score.higher CMI score.

Day 8 – Can capture 510 minutes, however no IV meds, ADL score 10 = RVB (43)

Difference = $ 14.85Difference = $ 14.85

26


Day 1 – Can capture SE3 RUG score, no therapy yet initiated

Day 3 – Can capture 300 minutes, can continue to capture enough extensive services to get SE2, ADL score 15

Day 8 – Unable to capture any extensive services qualifiers, ADL score up to16, therapy minutes 585.

Which do you choose?Which do you choose?


EXHIBIT A

27


Day 1 – Can capture SE3 RUG score, no therapy yet initiated = SE3 (40)

Day 3 – Can capture 300 minutes, can continue to capture enough extensive services to get SE2, ADL score 15 = RMX (47)RMX (47)

Day 8 – Unable to capture any extensive services qualifiers, ADL score up to 16, therapy minutes 585 = RVC (45)

28


Day 1 – Can capture SE3 RUG score, no therapy yet initiated

Day 3 – Can capture 300 minutes, can continue to capture enough extensive services to get SE2, ADL score 15

Day 8 – Unable to capture any extensive services qualifiers, ADL score up to 15, therapy minutes 725.

Which do you choose?Which do you choose?

EXHIBIT A


29


Day 1 – Can capture SE3 RUG score, no therapy yet initiated = SE3 (40)

Day 3 – Can capture 300 minutes, can continue to capture enough extensive services

to get SE2, ADL score 15 = RMX (47)

Day 8 – Unable to capture any extensive services qualifiers, ADL score up to 15, therapy minutes 585 = RUB (50)RUB (50)

30


• Do not RUSH to choose date

• Must be flexible

• Must be reviewed frequently

• May have to wait until last day ofobservation period to determine best date


EXHIBIT A

31


Accurate ARD selection will greatly

depend on:

– Obtaining and reviewing hospital records forextensive service qualifiers

– Identify furthermost ARD date to capture newextensive/rehab RUG

– Establish estimated therapy plan for first 8 days

– ARD planning between the MDS Coord and Rehabmanager/staff

– Estimation/calculation of ADL score on frequent basis

32

Accurate ADL Capturing

ADLs drive nursing index of each RUG score

Number of RUGs requiring an ADL score > 6increases from 6 to 15

• Rehab/Extensive 9 RUGs

• Extensive Services 3 RUGs

• Special Care 3 RUGs

EXHIBIT A


33

Accurate ADL Capturing cont’d

Financial Impact of Inaccurate ADL coding

225 minutes therapy, IV meds, ADL score of 6

RUG = RMA = $293.11

225 Minutes therapy, IV meds, ADL score 8

RUG = RML = $381.17

Difference $ 88.06 x 14 days = $1232.84

34


Financial Impact of Inaccurate ADL coding

550 minutes therapy, IV meds, ADL score of 15

RUG = RVL = $399.34

550 Minutes therapy, IV meds, ADL score 16

RUG = RVX = $428.24

Difference $ 28.90 x 14 days = $404.60


EXHIBIT A

35

Medicare ADL < 7Loss during first 14 days

SE3 SSA: ($104.57/day)

($1,463.98)

SE2 SSA: ($53.66/day)($751.24)

SE1 SSA: ($22.01/day)

($308.14)

36


Key points to remember regarding ADLS

• (A) Self Performance is 3 occurrences inassessment period, not 3 shifts

• (B) Support Provided need ONLY occur ONCEin lookback period

• Review all areas of the clinical record, includingtherapy notes

• Interview staff, resident if documentation notavailable

• Assess ADL status in person, if needed

• Clarify conflicting data in separate note, ifneeded

EXHIBIT A


37

Hospital Documentation

• CMS did not eliminate the lookback period

into the hospital, imperative to receive the

following

• MARS, TARS

• IV Records

• I & O

• H & P

• Most recent labs

• Physician progress notes/orders

• Nurses Notes

38

Hospital Documentation cont’d

Don’t forget aboutreadmissions to the SNF after

a rehospitalization!!!!


EXHIBIT A

39

Hospital Documentation cont’d

• Be alert to key hosp. admitting diagnosis

• Chest Pain

• MI

• CHF

• Pulmonary Edema

• Pneumonia

• UTI

• Dehydration

40

Billing Implications

EXHIBIT A


41

Billing Implications

• New RUGs effective 1/1/06

– Service Dates beginning 1/1/06

– Assessments may be billed under bothsystems (44 Rug & 53 Rug)

– CMS has a transition plan

42

Billing Implications cont’d

• Transition Plan

– CMS is requesting software vendors tobe compliant with 53 RUG grouper by11/22/05

– Software should calculate both RUGscores between 11/22/05 and 1/13/06


EXHIBIT A

43


• Transition Plan

– Assessments with an ARD 11/22/05have the potential to be billed underboth systems.

– Assessments with an ARD up to 1/13/06have the potential to be billed underboth systems

44


• Transition Plan

– Will need to review current billingprocesses to ensure billing the approp.RUG score effective 1/1/06

– No change in HIPPS codes

EXHIBIT A


45


• Transition Plan

– Submission reports will display both RUG

classifications beginning 11/22/05 thru

1/13/2006

ClinicalClinical

Reimbursement Reimbursement

Solutions, LLC Solutions, LLC

““Keeping you Informed, Compliant and SuccessfulKeeping you Informed, Compliant and Successful””

www.clinicalreimbursement.comwww.clinicalreimbursement.com

Exhibit B

RUG III PPS Grouper Version 5.20—Case Mix Indices

Source: Ronald Orth, RN, NHA, RAC-C. Reprinted with permission.

EXHIBIT B


Exhibit C

RUG III PPS Grouper Version 5.20—Case Mix Indices


EXHIBIT C


Exhibit D

ARD Selector Worksheet



EXHIBIT D

Resources

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RESOURCES

Speaker resources

Ronald Orth, RN, NHA, RAC-CClinical Reimbursement Solutions, LLC215 W Maple Street, Suite 107Milwaukee, WI 53204Phone: 888/225-7147E-mail: [email protected] site: www.clinicalreimbursement.com

HCPro sites

HCPro: www.hcpro.com

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RESOURCES


The Greeley Company: www.greeley.com

Get connected with leading healthcare consultants and educators at The Greeley Company’s Web site. Thisonline service provides the fastest, most convenient, and most up-to-date information about our quality con-sulting, national-education offerings, and multimedia training products for healthcare leaders. Visitors will finda complete listing of our services that include consulting, seminars, and conferences.

If you’re interested in attending one of our informative seminars, registration is easy. Simply go to www.greeley.com and take a couple of minutes to fill out our online form.

Visitors of www.greeley.com will also find

• faculty and consultant biographies. Learn about our senior-level clinicians, administrators, and faculty whoare ready to assist your organization with your consulting needs, seminars, workshops, and symposiums.

• detailed descriptions of all The Greeley Company consulting services.• a list of Greeley clients.• catalogue and calendar of Greeley’s national seminars, conferences, and available CMEs.• user-friendly online registration/order forms for seminars.

HCPro’s Healthcare Marketplace: www.hcmarketplace.com

Looking for even more resources? You can shop for the healthcare management tools you need at HCPro’sHealthcare Marketplace at www.hcmarketplace.com. Our online store makes it easy for you to find what youneed, when you need it, in one secure and user-friendly e-commerce site.

At HCPro’s Healthcare Marketplace you’ll discover all of the newsletters, books, videos, audioconferences,online learning, special reports, and training handbooks that HCPro has to offer.

Shopping is secure and purchasing is easy with a speedy checkout process.

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