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The American Medical Rehabilitation Providers Association (AMRPA) and the American Hospital Association’s (AHA) legislative office, both in Washington, DC, acknowledge the need for a Medicare prospective payment system (PPS) for inpatient rehabilitation facilities. But the two organizations, which represent the gamut of rehab organizations and facilities, express concern over how PPS would work under the proposed rule published in the Federal Register in November 2000 by the Baltimore-based Health Care Financing Administration (HCFA).
After spending nearly three months reviewing the more than 700-page proposed rule, the organizations have made a variety of suggestions about how HCFA may improve the PPS rule. Here is a very brief summary of their comments:
1. Data collection.
The AHA supports the recommendation of the independent Medicare Payment Advisory Commission (MedPAC) to use the functional improvement measure (FIM) for rehabilitation PPS. The AHA suggests the FIM be expanded to include items necessary for complete and accurate patient classification and necessary patient demographic information. The AHA also recommends that HCFA use terminology that is familiar to the rehab industry, including the terms "functional related groups (FRGs)" and "functional independence measure," according to a letter written by Rick Pollack, AHA executive vice president.
The AMRPA also recommends replacing the MDS-PAC with the FIM instrument, adding information on patient identification, age, length of stay, comorbidity, and discharge destination. "We believe the use of such in the modified FIM instrument would generate the necessary data pertinent to the payment system during the initial years of the IRF-PPS, while allowing HCFA to obtain the information it will need for future quality monitoring activities," writes Kenneth Aitchison, chair of the AMRPA PPS task force. Aitchison is president and chief executive officer of Kessler-Rehab Corp. in West Orange, NJ.
2. Payment for medically complex cases.
"We are very concerned about the compression of the case weights recognized in the RAND Interim Report of July 2000," Aitchison writes on behalf of the AMRPA. "The net result of case weight and case mix compression is chronic underpayment for more costly, more medically complex cases."
Aitchison’s letter suggests the causes for this dilemma may be the incomplete and inaccurate coding of all comorbidities, the use of averaged routine costs that include nursing cost, and other factors. "If the weights are corrected, ideally fewer cases will become outliers, and a transfer policy will more accurately reflect actual costs," Aitchison adds.
The AHA makes the point that the proposed payment methodology will fail to recognize the higher costs of facilities that care for disproportionate numbers of medically complex cases. "The systematic under-reimbursement of medically complex cases, a persistent problem in many case-mix systems, results from the interplay of the compressed’ case-mix group weights, shortfalls as a result of HCFA’s proposed transfer policy, and the inadequacy of the proposed outlier payments to rectify the shortfalls," Pollack writes.
He also notes that many of these same concerns about case-mix weight compression are shared by the RAND Corp., which is HCFA’s contractor for the proposed rule.
Further, Pollack writes, "The AHA believes that the fundamental cause for underpayments to facilities with medically complex patients is the failure of the prospective payment system to adequately ascertain variation in routine costs for patients with multiple, clinically relevant comorbidities."
The two reasons this occurs, Pollack adds, are that the cost measure used to set the payment weights inadequately measures variation in routine costs at the patient level, and the proposed comorbidity measure has no distinction between one comorbidity and multiple comorbidities for any particular patient.
"Our greatest concern is that, if the PPS is implemented as proposed, access to inpatient rehabilitation for medically complex cases will be jeopardized and facilities with disproportionate numbers of high-cost cases will be unfairly penalized," Pollack writes.
The AHA recommends these changes:
3. Facility-level adjustments.
Aitchison at the AMRPA recommends that HCFA establish a wage index specific to rehabilitation and correct calculations based on multiple labor shares. Another AMRPA suggestion is that HCFA make changes to the disproportionate share hospital (DSH) adjustment, which currently accounts for about 40% of total payments. "This formula could result in wide payment variations that could change from year to year," writes Aitchison. A better strategy, he writes, would be for HCFA to do the following:
The AHA also has voiced significant concerns with the disproportionate share policy. "We agree with the concerns raised by MedPAC that there has not been adequate analysis and discussion of the nature of the relationship between low-income patients and costs per case," Pollack writes. "The AHA urges HCFA to proceed cautiously before establishing a DSH payment that represents such a large proportion of total payments, effects which may be compounded by the disparity in data available from freestanding hospitals and rehabilitation units in acute care hospitals."
4. Interrupted stays.
The AHA comment letter to HCFA presses HCFA to review its proposed policy about interrupted stays and perhaps reduce the time frame for the interrupted stay, because a patient’s status may change significantly during the course of a brief re-hospitalization.
The AMRPA comment letter recommends HCFA clarify the definitions of interrupted stay cases under various scenarios; shrink the window for such stays to 24 hours; clarify which entity is responsible for paying for the acute care stay; and include a payment rule in the regulations.
5. Timing of start-up.
Both organizations express concern about the proposed implementation date of April 1, 2001, for inpatient rehab PPS. Pollack’s AHA letter to HCFA says the date is both unrealistic and undesirable and that HCFA should instead delay the start-up of the PPS until Oct. 1, 2001, to allow for all refinements.
Aitchison’s AMRPA letter to HCFA also states that the April 1, 2001 implementation date is unrealistic. Aitchison asks HCFA to announce as soon as possible the anticipated dates for: training on the MDS-PAC, availability of the data assessment tool software, testing for transmission of data, the deadline for all facilities to submit data on cases, and implementation for payment, including treatment of the transition period. "We recommend that HCFA clarify the implications for the transition period if the IRF-PPS is not implemented until Oct. 1, 2001," Aitchison writes.