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The Health Care Financing Administration (HCFA) in Baltimore has received hundreds of questions and comments since publishing the proposed rule for inpatient rehabilitation prospective payment system (PPS) on Nov. 3, 2000. The volume of concern and the subsequent decision to give rehab providers an extra month to make comments about the proposed rule led the agency to abandon efforts to have PPS implemented on April 1, 2001, as stated in the proposed rule.
"We are currently examining all aspects of the PPS to determine an appropriate implementation date," HCFA officials write in a recently published report that answers the rehab industry’s most frequently asked questions.
HCFA further states that the new implementation date will include enough time for providers to educate and train staff and to institute system modifications between the time the final rule is published and the implementation date. The implementation date will be published in the final rule, and no date has been given for when that will be published. Here are a few of the questions HCFA has received from rehabilitation facilities, along with the agency’s answers:
Q: How will the planned delay in implementing the PPS affect the application of the transition percentages?
HCFA: Under the Balanced Budget Act of 1997, the federal fiscal year in which a facility’s cost reporting period begins determines which one of the two possible transition period percentages apply. The first transition period percentages are applicable for cost reporting periods beginning during federal fiscal year 2001. This would include only those cost reporting periods that begin on or after the implementation date in the final rule and before Oct. 1, 2001.
The second transition period percentages are applicable to cost reporting periods beginning during federal fiscal year 2002, that is, periods beginning on or after Oct. 1, 2001, and before Oct. 1, 2002. For cost reporting periods beginning during federal fiscal year 2003 and after, payment is based on 100% of the adjusted federal prospective payment. This conforms to proposed section 412.626 of the regulations.
A facility will continue to be paid under the TEFRA (reasonable cost-based) system for its entire cost reporting period beginning prior to the implementation date contained in the final rule. If a facility’s first cost reporting period under the PPS begins during federal fiscal year 2002, the second transition period percentages would apply. [Based on the recently enacted Beneficiary Improvement and Protection Act of 2000, a provider may elect to be paid 100% of the adjusted federal prospective payment regardless of whether its first cost reporting period under the PPS begins during the transition periods. Additional information on this provision will be provided in the final rule.]
Q: Why does the budget-neutral conversion factor of $6,024 appear to be lower than expected?
HCFA: As explained in the notice of proposed rulemaking, the conversion factor is the payment amount that has been adjusted for budget neutrality and has been standardized to account for a number of facility and case level adjustments. The federal prospective payments are the result of applying the budget-neutral conversion factor to the relative weights for each case mix group. In computing a facility’s prospective payment for a case mix group, it is very important to adjust the federal prospective payment by the applicable facility level adjustments.
Q: Does the DSH [disproportionate share] adjustment apply to all facilities?
HCFA: Yes. At this time we propose to adjust payment for each facility that has Medicaid days and/or beneficiaries that receive SSI benefits by the results of the DSH adjustment formula to account for the cost of furnishing care to low-income patients.
Q: Is the ratio of Medicaid days to total days in the calculation of the disproportionate share specific to rehabilitation units?
HCFA: The ratio of Medicaid days to total days is specific to rehabilitation units if the facility identified this information on its cost report. When the unit-specific information was unavailable, we used the overall Medicaid Days and Total Days for the entire facility.
Q: Who can bill under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS)?
HCFA: To be eligible to bill and be paid under IRF PPS, a facility first must meet the conditions for payment under proposed d 412.604 of the regulations. This includes meeting the requirements under d 412.23 (b), which in part states that a facility must:
"Show that during its most recent 12-month cost reporting period, it served an inpatient population of whom at least 75% required intensive rehabilitation services for the treatment of one or more of the following conditions: stroke, spinal cord injury, congenital deformity, amputation, major multiple trauma, fracture of femur (hip fracture), brain injury, polyarthritis (including rheumatoid arthritis), neurological disorders (including multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy, and Parkinson’s disease), and burns."
Q: Will the clinical conditions that are applicable to the 75% rule be modified under the IRF PPS?
HCFA: As stated in the previous answer, in order to be paid under the IRF PPS, we have proposed to use the same requirements (including the clinical conditions referenced in the previous answer) to determine if a facility is exempt from the acute care hospital PPS. We believe that this will preserve the budget neutrality in payments made during the initial years of the proposed IRF PPS. However, we will be analyzing data as it becomes available after implementing the IRF PPS to determine if changes to the requirements to be classified as an inpatient rehabilitation facility are appropriate.