Medicare Long-term Care Hospital Prospective Payment System Fiscal Year 2016

Transcription

1 Final Rule Summary Medicare Long-term Care Hospital Prospective Payment System Fiscal Year 2016 February P a g e

2 Table of Contents Overview and Resources... 2 Effect of BiBA and PAMA on the LTCH PPS... 2 Site-Neutral Payments Percent Payment Adjustment Threshold... 3 Restrictions on the Establishment/Classification of New LTCHs and Bed Growth... 3 LTCH Payment Rate... 4 Effect of Sequestration... 4 Wage Index, Labor-Related Share, and COLA... 4 Updates to the MS-LTC-DRGs... 5 ICD-10-CM... 5 High Cost Outlier Payments... 5 Short-Stay Outlier Payments... 6 Interrupted Stay Policy... 6 Updates to the LTCH Quality Reporting Program... 6 Future Measure Concepts Under Consideration for the LTCH QRP... 7 If you have any questions about this summary, contact Kathy Reep, FHA Vice President/Financial Services, by at kathyr@fha.org or by phone at (407)

3 Overview and Resources On August 17, 2015, the Centers for Medicare & Medicaid Services (CMS) released the federal fiscal year (FY) 2016 final payment rule for the Medicare long-term care hospital prospective payment system (LTCH PPS). The final rule reflects the annual update to the Medicare fee-for-service (FFS) LTCH payment rates and policies based on regulatory changes put forward by CMS and legislative changes previously adopted by Congress. A copy of the final rule Federal Register and other resources related to the LTCH PPS are available on the CMS Web site at Payment/LongtermcarehospitalPPS/download.html. An online version of the rule is available at A summary of the final rule is provided below along with Federal Register page references for additional details. Program changes adopted by CMS will be effective for discharges on or after October 1, 2015, unless otherwise noted. Effect of BiBA and PAMA on the LTCH PPS Federal Register pages The Bipartisan Budget Act (BiBA) of 2013 and Protecting Access to Medicare Act (PAMA) of 2014 included several significant provisions related to current and future LTCH PPS policies and payments. The laws direct CMS to establish two different types of LTCH PPS payment rates: the standard LTCH PPS payment rates or the new, lower, site-neutral LTCH PPS payment rates based on the IPPS rates. All LTCH discharges meeting certain clinical criteria will be paid at the LTCH PPS standard federal payment rate. LTCHs will be paid the new site-neutral payment rate unless they meet specified exclusion criteria. In particular, CMS will implement a statutory transitional payment method for site-neutral cases occurring in cost reporting periods beginning during FYs 2016 and The laws provide a two-year transition period for those paid at the site neutral payment rate. During that transition, site-neutral payment rate cases will be paid based on a blend of LTCH PPS standard federal payment rate and the LTCH PPS site-neutral payment rate. The following is a summary of the mandates: Site-Neutral Payments (Federal Register pages ): BiBA mandates the use of site-neutral inpatient prospective payment system (IPPS) equivalent payment rates for LTCHs beginning FY2016 (with a two-year phase-in). The following criteria were finalized by CMS in order to identify cases eligible for a standard LTCH PPS payment: o The LTCH discharge does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation; 2 P a g e

4 o A case must be immediately discharged from an IPPS hospital. CMS withdrew its proposed requirement that immediately discharged cases have discharge status code 63 or 91 for the prior hospital stay. This immediate discharge will be evidenced by the dates of discharge and admission to the LTCH and one or both of these criteria: Must receive at least three days of care in an intensive care unit (ICU) or coronary care unit (CCU) during the prior hospital stay. CMS will use the full set of ICU and CCU revenue codes when counting a patient s ICU and CCU days during the prior acute care hospital stay; and/or The patient received at least 96 hours of ventilator services in the LTCH stay. For cost reporting periods beginning in FYs 2016 and 2017, site-neutral cases would be paid a blend of the standard LTCH PPS rate and the applicable site-neutral rate. All applicable adjustments would apply to each of the rates contributing to the blended payment. Following this transition period, site-neutral cases would be paid fully under the site-neutral rates. CMS finalized that the site-neutral payment rate is the lesser of either the IPPS comparable per diem amount, or 100 percent of the estimated cost of the case. The IPPS comparable per diem payment amount is capped at the lower of the IPPS comparable per diem amount and the full comparable amount to what would otherwise be paid under IPPS. In addition, BiBA mandates an IPPS equivalent payment rate for all discharges for LTCHs that fail to meet the applicable discharge threshold (less than 50 percent of patients for whom the standard LTCH PPS payment is made). This mandate would be effective for discharges occurring in cost reporting periods during or after FY2021. The law includes a reinstatement process for LTCHs that fail to meet the required discharge threshold percentage in a particular year. For calculating whether an LTCH or LTCH satellite meets the existing greater than 25-day average length of stay requirement, BiBA mandates the exclusion of cases paid at the siteneutral rate and those paid by Medicare Advantage (MA). The impact of site neutral payments is effective at the start of a LTCH s next cost report period following October 1, Percent Payment Adjustment Threshold (Federal Register pages ): Since 2005, legislative and regulatory action has delayed full application of the 25 percent payment adjustment threshold for most LTCHs. This policy will reduce LTCH payment amounts to the IPPS amount for LTCHs that admit more than 25 percent of Medicare cases from an onsite or neighboring inpatient acute care hospital. Certain grandfathered LTCHs are now permanently exempted from the policy by law. The 25 percent threshold policy will be applied to site-neutral payment rate cases. Restrictions on the Establishment/Classification of New LTCHs and Bed Growth (Federal Register pages ): In 2014, the Protecting Access to Medicare Act (PAMA) established freezes on the increase of the number of hospital beds in existing 3 P a g e

5 LTCHs and LTCH satellite facilities. Without exception, an LTCH may not increase the total number of Medicare certified beds beyond the number that existed prior to April 1, The number of Medicare certified beds in an LTCH includes beds in all locations, including, as applicable, satellite facilities. LTCH Payment Rate Federal Register pages Incorporating the adopted updates and the effects of a budget neutrality adjustment, the table below lists the full LTCH standard federal rate for FY2016 compared to the rate currently in effect. Final FY2015 Final FY2016 LTCH Standard Federal Rate $41, $41, Percent Change +1.7 (proposed at +2.05) The table below provides details of the adopted updates for the LTCH standard federal rate for FY2016: Market Basket Update Patient Protection and Affordable Care Act (PPACA) - Mandated Productivity Market Basket Reduction PPACA Pre-determined Reduction Wage Index Budget Neutrality Adjustment Overall Rate Change LTCH Rate Updates and Budget Neutrality Adjustments (Percent) +2.4 (proposed at +2.7) -0.5 percentage points (proposed at -0.6) -0.2 percentage points (no change from proposed) (proposed at ) +1.7 (proposed at +2.05) Effect of Sequestration Federal Register page reference not available While the final rule does not specifically address the 2.0 percent sequester reductions to all lines of Medicare payments authorized by Congress and currently in effect through FY2024, sequester will continue unless Congress intervenes. Sequester is not applied to the payment rate; instead, it is applied to Medicare claims after determining co-insurance, any applicable deductibles, and any applicable Medicare secondary payment adjustments. Wage Index, Labor-Related Share, and COLA Federal Register pages There will not be any major changes to the standard calculation of the wage index for LTCHs. As has been the case in prior years, CMS will use the most recent inpatient hospital wage 4 P a g e

6 index, the FY2016 pre-rural floor and pre-reclassified hospital wage index, to adjust payment rates under the LTCH PPS for FY2016. The wage index, which is used to adjust payment for differences in area wage levels, is applied to the portion of the LTCH standard federal rate that CMS considers to be laborrelated. For FY2016, CMS will decrease the labor-related share from percent for FY2015 to 62.0 percent for FY2016 (proposed at 62.2%). This change will provide a slight increase in payments to LTCHs with a wage index less than 1.0. Updates to the MS-LTC-DRGs Federal Register pages , Each year, CMS updates the MS-LTC-DRG classifications and relative weights. These updates are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. Although the DRGs used to classify patients under the LTCH PPS are identical to those used under the IPPS, the relative weights are different for each setting. CMS is adopting its proposal that, beginning with FY2016, the MS-LTC-DRG relative weights will be determined using only data from LTCH discharges that meet the criteria for exclusion from the site-neutral payment rate (that is, LTCH PPS standard federal payment rate cases). ICD-10-CM Federal Register page CMS will use the ICD-10 MS-LTC-DRGs Version 33 beginning October 1, High Cost Outlier Payments Federal Register pages , , High cost outlier (HCO) payments were established under the LTCH PPS to provide additional payments for very costly cases. Outlier payments are made if the estimated cost of the case exceeds the payment for the case plus a fixed-loss amount. Costs are determined by multiplying the facility s overall cost-to-charge ratio (CCR) by the allowable charges for the case. When a case qualifies for an outlier payment, CMS pays 80 percent of the difference between the estimated cost of the case and the fixed-loss amount as a separate outlier payment, in addition to the traditional DRG payment. CMS is adopting two separate HCO targets one for LTCH PPS standard federal payment rate cases and one for site-neutral payment rate cases. CMS finalized a fixed-loss amount of $16,423 for LTCH PPS standard federal payment rate cases, lower than the proposed $18,768 amount. The applicable HCO threshold for site-neutral payment rate cases is the sum of the site-neutral payment rate for the case and the IPPS fixed-loss amount of $22,539 (changed from $22,544 in the October CMS IPPS correction notice) under the IPPS, which is lower than the proposed amount of $24,485. CMS is adopting an approach under which the budget neutrality adjustment of for estimated HCO payments to site-neutral payment rate cases will be applied to the site-neutral payment rate portion of the transitional blended rate payment 5 P a g e

7 in FY2016 (and will not be applied to the LTCH PPS standard federal payment rate portion of the transitional blended rate payment). Short-Stay Outlier Payments Federal Register pages Short-stay outlier (SSO) payments were established under the LTCH PPS to ensure that LTCH payments, which are predicated on long lengths of stay (LOS), are not applied to cases where the patient may have received only partial treatment at a LTCH. Currently, the SSO outlier policy applies to cases with a covered LOS of less than or equal to 5/6 of the average LOS for the MS-LTC-DRG. Payments for SSO cases will continue to be based on the lowest of four calculated amounts: 1) the full MS-LTC-DRG amount; 2) 120 percent of the MS-LTC-DRG per diem; 3) 100 percent of cost; or 4) Depending on the LOS of the SSO case relative to the IPPS comparable threshold : 100 percent of the comparable IPPS MS-DRG per diem or a blend of that amount and 120 percent of the MS-LTC-DRG per diem. The IPPS comparable threshold is defined as the geometric average length of stay (ALOS) for the same DRG under the IPPS. CMS is not applying the SSO policy to site-neutral payment rates at this time. Interrupted Stay Policy Federal Register pages Under the LTCH PPS, an interrupted stay occurs when a patient is discharged from an LTCH to an acute care hospital, inpatient rehabilitation facility (IRF), or skilled nursing facility (SNF) for treatment/services not available in the LTCH and subsequently readmitted to the same LTCH for continued treatment. When an interrupted stay occurs, the LTCH is paid a single payment for both stays. CMS finalized its proposal to apply the interrupted-stay policy to site-neutral LTCH cases. CMS did not finalize its proposal regarding the discharge status codes as reported on the preceding hospital s claim. An LTCH discharge will be considered to have been immediately preceded by a discharge from a hospital if there was a direct admission from such a hospital, as evidenced by the dates of discharge and admission to the LTCH. Updates to the LTCH Quality Reporting Program Federal Register pages , Beginning in FY2014, the applicable annual update for any LTCH that does not submit the required data to CMS is reduced by two percentage points. The IMPACT Act of 2014 requires the specification of quality measures for the LTCH QRP, including such areas as medication reconciliation, skin integrity, and functional status, such as mobility and self-care, as well as 6 P a g e

8 incidence of major falls. Also the IMPACT Act stipulates that measures must be standardized so they can be applied across post-acute care settings. The following lists the LTCH Quality Reporting Program (LTCH QRP) measures and applicable payment determination years. CMS is focusing initially on measures that can achieve the standardization across settings over time, and minimize or avoid duplication of existing assessment items. CMS has not proposed any additional LTCH QRP quality measures for the FY2019 payment determination and subsequent years. Measure NQF # Finalized Cross-Setting Measure Payment Determination Year NHSN Catheter-Associated Urinary Tract Infection (CAUTI) #0138 Outcome Measure FY2015 and beyond NHSN Central Line-Associated Blood Stream Infection (CLABSI) #0139 Outcome Measure FY2015 and beyond Percent of Residents or Patients with Pressure Ulcers That Are New #0678 Yes or Worsened (Short-Stay) FY2015 and beyond Percent of Residents or Patients Who Were Assessed and #0680 Appropriately Given the Seasonal Influenza Vaccine (Short-Stay) FY2016 and beyond Influenza Vaccination Coverage among Healthcare Personnel #0431 FY2016 and beyond NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia Outcome Measure NHSN Facility-Wide Inpatient Hospital-Onset Clostridium Difficile Infection (CDI) Outcome Measure All-cause Unplanned Readmission Measure for 30 Days Post- Discharge from Long-Term Care Hospitals FY2017 and Subsequent Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay) Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function Change in Mobility among Patients Requiring Ventilator Support #1716 FY2017 and beyond #1717 FY2017 and beyond #2512 Yes FY2018 and beyond #0674 Yes FY2018 and beyond #2631 (endorsed 7/23/15) #2632 (endorsed 7/23/15) Yes FY2018 and beyond FY2018 and beyond NHSN Ventilator-Associated Event (VAE) Outcome Measure N/A FY2018 and beyond CMS will publicly report LTCH quality data on four quality measures beginning in Fall 2016 on the Hospital Compare Web site. CMS will lengthen the quarterly data submission deadlines from 45 days to 135 days beyond the end of each calendar year quarter beginning with the fourth quarter 2015 quality data in order to align with other quality programs and to allow time for LTCHs to review and correct quality data prior to posting. Future Measure Concepts Under Consideration for the LTCH QRP Federal Register page CMS is reviewing comments on the following measures that remain under consideration for future years (those with an * are cross-setting measures): 7 P a g e

9 Patient Safety: Ventilator Weaning (Liberation) Rate; Compliance with Ventilator Process Elements during LTCH Stay; Venous Thromboembolism Prophylaxis; Medication Reconciliation*; Effective Communication and Coordination of Care: Transfer of health information and care preferences when an individual transitions*; All-Condition Risk-Adjusted Potentially Preventable Hospital Readmission Rate*; Patient- and Caregiver-Centered Care: Discharge to community*; Patient Experience of Care; Percent of Patients with Moderate to Severe Pain; Advance Care Plan; Affordable Care: Medicare Spending per Beneficiary* 8 P a g e