Prospective Payment System

The Centers for Medicare & Medicaid Services (CMS) has issued the proposed rule for skilled-nursing facility (SNF) prospective payment system (PPS) for federal fiscal year (FFY) 2014. Overall, CMS estimates that payments to SNFs would increase 1.4 percent, or approximately $500 million. The new rates would apply to services furnished to Medicare beneficiaries during FFY 2014, beginning with discharges on or after Oct. 1, 2013. CMS also proposes to add to the minimum data set an item to record the number of distinct calendar days of therapy provided by all rehabilitation disciplines, and clarifies that the low rehab resource utilization group category requires three distinct calendar therapy days. CHA will provide a more detailed summary, including facility-specific DataSuite reports, of the proposal in the coming weeks and will work with members to develop comments, which are due by July 1. The proposed rule is attached.

The U.S. Department of Health and Human Services Office of Inspector General (OIG) notified the Centers for Medicare & Medicaid Services last week that many long-term care hospitals (LTCHs) have not, as required by federal regulations, notified their claims processing contractors that they are co-located with another hospital-level provider or skilled-nursing facility. According to the OIG’s early alert memorandum report, the lack of information on co-located status can prevent the application of two payment polices that lower Medicare payments, including the “25-percent rule” governing admission referral sources and payment policy for interrupted stays. The OIG’s preliminary analysis revealed that nearly half of the 211 LTCHs identified as having co-located status had not reported this information to their claims processing contractors. A copy of the OIG’s report is attached.