Reimbursement method for Medicare patients remains up in the air
Reimbursement method for Medicare patients remains up in the air
Keep your eye on Washington for developments
There’s no doubt about it: Medicare reimbursement is going to change dramatically for subacute providers. The Balanced Budget Act of 1997 includes major changes to the Tax Equity and Financial Responsibility Act of 1982 (TEFRA) and a new prospective payment system (PPS).
But even after Congress has mandated the changes in the Balanced Budget Act, there’s no clear indication of exactly how the reimbursement will change. As early as this month, however, several provisions of the act take effect that virtually eliminate incentive payments for TEFRA and slash reimbursement per discharge for some providers. (For details on the TEFRA changes, see story, p. 123.)
Many in the rehabilitation field have assumed that a PPS for rehabilitation will be based on function related groups (FRGs), but some Washington watchers say that may not be the case. A recent dispute between the Uniform Data System for Medical Rehabilitation (UDSMR) and the Health Care Financing Administration (HCFA) over proprietary information in the Santa Monica, CA-based RAND Corp.’s report on FRGs has delayed the release of the report and HCFA’s final decision on a PPS.
The Balanced Budget Act, signed into law by President Clinton in early August, requires development of a PPS for medical rehabilitation by the year 2000. The PPS will be phased in and fully operational by fiscal year 2003, which begins in October 2002. The original legislation specifying a PPS for rehabilitation, introduced in February 1997 by U.S. Rep. Frank LoBiando (R-NJ), provided for a PPS based on FRGs for inpatient rehab hospital and rehab unit services.
FRGs no longer basis for reimbursement
A similar measure LoBiando introduced in July 1996 went nowhere. The final version passed by Congress, however, did not specify FRGs as the basis for reimbursement but used broader language, specifying that the case mix groups should be based on age, impairment, co-morbidities, prior hospitalization, and functional status.
The new law says HCFA can base its classification system on a per-discharge, per diem, or other method determined by the secretary of Health and Human Services.
HCFA awarded a contract to the RAND Corp. in 1995 to develop a prospective payment model for rehabilitation based on FRGs. HCFA received the RAND report in June, but the report’s release has been held up because of a conflict with the Buffalo-NY based UDSMR, which developed the Functional Independence Measure on which the FRGs are based. UDSMR claims it has exclusive rights to the term FRG and other information in the re-port and is moving to protect its intellectual property.
Some in the rehab field are concerned that the controversy with the UDSMR will cause HCFA to consider mandating the Resource Utilization Groups (RUG) system that will be implemented as a PPS for skilled nursing facilities beginning July 1, 1998. (For details, see the related story, p. 123.)
Bill Buczko, research analyst in HCFA’s office of strategic planning, says HCFA has set an October 2000 deadline for putting rehabilitation on a PPS. That leaves little time to waste with disputed systems.
"We are currently discussing issues related to proprietary information in the report with the UDS[MR]. When we resolve that, we will be able to release the report," he adds.
A long delay in the report’s release and HCFA’s choice of a PPS could cause difficulties down the road for rehab and other subacute providers, officials say.
"The next six to eight months are absolutely critical for the field in getting this information released," says Carolyn Zollar, JD, general counsel for the Reston, VA-based American Rehabilitation Association.
Access to information is critical
It is crucial for rehabilitation providers to have access to the information in the RAND report so they can analyze the impact it will have and support it or suggest modifications to HCFA, Zollar says.
"The biggest challenge facing the field is working to ensure that whatever system HCFA picks reflects rehab patient characteristics and needs," she says.
The October 2000 implementation data were based on HCFA’s estimation during Congressional hearings on how much time it needed to implement a PPS. Subacute providers need to know what reimbursement system they will be dealing with as soon as possible because it will take all the time between now and the implementation date for HCFA to collect data, analyze them, and create payment rates using the new system, Zollar says.
There is concern in the field that HCFA may make a different choice, such as the RUGs, that won’t be as representative of rehab patients’ needs as an FRG-based system. Zollar adds that such a system may not make a clear distinction between types of patients. She urges providers to stay in contact with HCFA to make sure that any PPS chosen by HCFA is in their best interests.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.