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Can You Cope With the Codes?
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It took awhile, but CMS got the message: The Resource Utilization Groups (RUGs) established by CMS based on time studies done from 1995 to 1997 didn’t anticipate that many nursing home patients would need both intensive therapy and intensive nursing. For nine years, facilities have been forced to choose whether to get paid for rehab or for nursing. With CMS’s RUG Refinement Rule, which took effect January 1, 2006, that is no longer the case.
Under RUG Refinement, CMS has added nine new RUG categories that combine rehab and nursing needs. [See SIDEBAR below.] The nine new categories are at the top of the reimbursement pole. CMS anticipates that approximately 20% of patients will reclassify into the new RUG categories. However, consultants are quick to point out that there are a couple of anomalies in the new categories. “Initially, RUG Refinement looks like a good thing because we have combined therapy and nursing levels,” says Pat Boyer, president of the consulting firm of Boyer & Associates, LLC, in Brookfield, Wisconsin. “However, from a dollar standpoint, we have not gained anything. The monies that were allocated for the 44 groups are now spread across 53 groups. The key now is to make sure facilities have good processes in place to capture the correct RUG and to capture their fair share of those combined RUGs.”
The second anomaly occurs in the reimbursement structure itself: CMS does not pay in the order of the hierarchy of RUG levels. “People have to understand that the RUG III categories encompass both rehab and nursing services,” says Michael Lesnick, senior vice-president and director of healthcare consulting with Kellogg & Andelson. “The data from the studies CMS has conducted show that patients in the new Rehab Medium categories (RMX and RML) consume more total resources than patients in the corresponding new Rehab High categories (RHX and RHL). That’s because the nursing index figures for the new medium levels are significantly higher than the nursing index figures for the new high levels.”
RUG STRATEGIES
CMS simplified the transition to the new categories by making no changes to the MDS process at all. However, there are some strategies that will help nursing homes capture the correct reimbursement for the services they provide.
“Because providers will be paid more if the patient receives medium rehab as opposed to high, they are incentivized to bring on therapy slower for the medically complex patient, especially during the first 14 days,” says Joseph Lubarsky, partner and national director of long-term care services for BDO Seidman, LLP. “This may be good from the standpoint of the instability of the patient. It also creates a bit of a push/pull relationship between the nursing home and the therapy department.”
1. The crucial Assessment Reference Date—That push/pull takes place at admission when the MDS nurse seeks to establish the Assessment Reference Date (ARD). Because RUG payments are made in anticipation of the patient’s future needs based on the most recent past needs, looking back to capture the clinical services the patient received in the hospital becomes a defining factor. Five criteria qualify patients for the extensive services categories: (a) parenteral/IV, (b) IV medication, (c) suctioning, (d) tracheostomy care, and (e) ventilator or respirator. The look-back periods into the hospital stay are 14 days, with the exception of 7 days for parenteral/IV.
“Before RUG Refinement, a lot of facilities with rehab patients didn’t bother with the clinical notes from the hospital—it wasn’t a critical need. Now it’s critical for everybody,” says Boyer. She cites the example of a resident who is admitted to the nursing home at the traditional Rehab High level of RHA, with a rate of $296/day; what admission missed was that during the previous 14 days in the hospital, the patient had an IV med or IV fluid, which would have put the resident into the new Rehab High plus Extensive Services category (RHL) that pays $356/day.
Under the old categories, therapy would customarily choose an ARD on days 5 to 8 to capture therapy minutes. Now, setting the ARD at day 1 or 2 can capture that clinical data from the hospital necessary for the new Extensive Services categories. “In this new system, more therapy is not always better,” says Boyer. “In fact, if the medical situation precludes immediate therapy, the resident could appropriately fit into a Rehab Medium level of service, and the facility would actually receive higher reimbursement than from one of the new Rehab High categories. It’s beneficial that you don’t have to throw a lot of therapy at a patient right away to get a better payment. You can actually truly manage the patient care.”
2. Correct coding of ADL scores—Because the new RUG levels demand a score of at least 7 in Activities of Daily Living (ADL), correct scoring is essential. “I was in a facility recently where a resident was coded with an ADL score of 6. I could find documentation that it should have been an 8. That’s a difference of $70 per day,” says Boyer. She stresses that nurses, not therapists, perform the coding, and she likes to see it happen on every shift of the 7-day look-back period. “In the evening, the resident may need extensive assistance in transferring, while in the morning in therapy, he may be less dependent and doing his best because he wants to go home,” she says.
3. Ramping up and ramping down—Treating the medically complex patient may mean a longer length of stay for residents, but that’s not necessarily a bad thing. “We don’t have to throw all this high-level therapy up front and then send the resident home with nothing or with just home health,” says Boyer. “We encourage ramping therapy, both up and down, using the Rehab Low category to provide a transition. A great strategy is to use the time span during therapy’s home evaluation to transition the resident to restorative care.”
Nursing and therapy should discuss the care to be delivered to the patient upon admission and on an ongoing basis, so they can manage that care to best serve the patient and to best consider the timing rules associated with the MDS and RUG III categories. “Therapists need to know RUGs,” says Boyer. “I can’t say that enough because I still run into so many who don’t understand the whole RUG system.”
SIDEBAR
Definitions of New Rehabilitation "Plus Extensive Services" Groups:
RUX — Rehab Ultra High, plus Extensive Services High
RUL — Rehab Ultra High, plus Extensive Services Low
RVX — Rehab Very High, plus Extensive Services High
RVL — Rehab Very High, plus Extensive Services Low
RHX — Rehab High, plus Extensive Services High
RHL — Rehab High, plus Extensive Services Low
RMX — Rehab Medium, plus Extensive Services High
RML — Rehab Medium, plus Extensive Services Low
RLX — Rehab Low, plus Extensive Services
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