Special Report: Inpatient Rehab PPS

Rehab experts air concerns about inpatient rehab PPS

Transfer policy, comorbidities top list

Although the Centers for Medicare and Medicaid Services (CMS) in Baltimore listened to the rehab industry’s concerns about its inpatient rehab prospective payment system (PPS) and made many changes to the proposed rule, industry representatives and providers say they still have significant concerns about the final rule.

"Some of the concerns are tracking the transfers and short stays, and for us there may be some significant concerns for outlier patients, particularly burn and spinal cord injury patient care," says Bonnie Breit, MHSA, OTR, administrative director of rehabilitation services for Crozer-Keystone Health System in Upland, PA.

Here are some of the potential problems and changes seen in the final rule:

Comorbidity list: Rehab facilities will need to educate staff about what is on the comorbidity list, what isn’t, and how to document every relevant comorbidity.

"One thing that’s more important than everyone had realized before is that coding comorbidities has to be absolutely critical to payment," says Carolyn Zollar, JD, vice president for government relations for the American Medical Rehabilitation Providers Association in Washington, DC.

"It will have a significant impact on cost, up to 27% to 28%," Zollar adds.

The final rule provides four weights for each group. Three of those weights relate to the severity of the comorbidities, which in turn relates to the cost of the comorbidities, Zollar explains. "Rehab providers will need to know the [ICD-9-CM] coding very, very well, and anyone involved in the clinical process probably needs to be familiar with the coding."

The list of comorbidities is very long and specific, and rehab providers will need to make certain that physicians are fully aware of which comorbidities have an impact on reimbursement and which do not, says Laura Landmeier, OTR, MSOT, MBA, assistant vice president of quality and outcomes management for Schwab Rehabilitation Hospital & Care Network in Chicago.

"That comorbidity list is going to be a bear to work with in an efficient manner, and it will take a smooth system to deal with it," Landmeier says.

Another problem is that the list still doesn’t include all of the comorbidities that a rehab facility might encounter and that might affect the cost of care, says Joe Golob, PT, director of the inpatient rehab center at Bon Secours St. Francis Health System in Greenville, SC.

"The comorbidity list provides some more opportunities, but it still is not as inclusive as a lot of us would like to see," Golob says.

For example, deep vein thrombosis is not included on the comorbidity list, although rehab patients sometimes will have that comorbid diagnosis, which may result in more costly care.

However, it’s not too late for the rehab industry to influence changes to the comorbidity list. CMS has indicated a willingness to make modifications according to inpatient rehab data collected over the first years of PPS.

"This is another reason why we really want to make sure the medical conditions that are present as comorbidities, even if they are not necessarily listed on comorbidity sheets, are reported to the government," Landmeier says. "So then they can track that information and see if these comorbidities are in fact adding to costs and need to be adjusted in the future."

Transfer policy: Although CMS has improved the transfer policy by putting into the PPS regulations a provision to pay facilities 150% of the per diem on the first day of admission, it still will result in lower payments whenever a patient has less than the average length of stay (LOS) and then moves to another institutional setting, says Barbara Marone, senior associate director of policy for the American Hospital Association in Washington, DC.

"We had argued for the feds to eliminate that policy totally or to narrow it if they didn’t eliminate it," Marone says.

The transfer policy — which results in a per diem payment when the patient has not met the average LOS and is moved to a skilled nursing facility, a long-term care hospital, acute care, or another rehab unit — is contrary to the concept of PPS, Marone adds.

Under the short-stay transfer policy, the rehab provider will be paid a per diem rate that is determined by dividing the payment for a particular case mix group (CMG) by the average LOS for that CMG. The first day receives 150% of that per diem rate.

"We feel that in any kind of prospective payment system, it is a system of averages, where you pay an average payment, and as providers you will lose money on higher-resource intensive cases with higher LOS," Marone explains. "But you can’t balance out higher-cost cases with lower LOS cases when a transfer policy is imposed at all."

For example, suppose a diagnosis has an average LOS of 15 days. Rehab facilities will not receive full payment for any cases that do not go up to day 14, Marone says. "If they had a transfer policy apply to those days between three and eight, then you could say, We don’t like it, but we understand.’"

But with the transfer policy, rehab providers will not be able to recoup losses incurred by outlier cases because they will be penalized for having lower-than-average LOS on other cases, Marone adds.

Low Income Patient Adjustment (LIPA): Previously called the disproportionate share adjustment, this has been changed significantly. Rehab providers objected to the proposed rule’s adjustment because it would have given an enormous increase in payment to those facilities that served a few low-income people. The new adjustment provides some incentive to treat low-income people, but has raised the base rate so the adjustment is less dramatic.

"They almost doubled the base rate, so you would have to look at both the effect of the LIPA decrease and the base rate increase to determine what the true financial impact of this will be," says Tom Davis, president of inpatient services for RehabCare Group in St. Louis.

"Our cursory review would appear to show it’s pretty neutral over a large number of units," Davis says. "There are winners and losers within a group, but when looking at the whole universe of rehab hospitals, it’s a pretty minor change."