fy 2016 medicare inpatient prospective payment system ... · affordable care act of 2010 (the...

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FY 2016 Medicare Inpatient Prospective Payment System (IPPS) Final Rule New Jersey Chapter of HFMA Steve Frankenbach Senior Director, Network Reimbursement St Luke’s University Health Network September 10, 2015

St. Luke’s University Health Network

Introduction Inpatient Prospective Payment System (IPPS) components

Background and key components Hospital wage index Medicare payment and reimbursement changes/updates IPPS capital-related cost Hospitals excluded from IPPS Long-Term Care Hospital Prospective Payment System (LTCH PPS) DRG changes

Not Covered in this presentation: Value Based Billing Readmissions HAC payment reductions Rural and other provisions not applicable to New Jersey Hospitals Quality reporting indicators

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Agenda


FY 2016 inpatient final rule Introduction

July 31, 2015 - Center for Medicare & Medicaid Services (CMS) released the fiscal year (FY) 2016 display version Medicare policies and payment rates Acute IPPS hospitals and LTCH PPS final rule Published in the August 17th Federal Register Effective for discharges on or after October 1, 2015

Information taken directly from the Federal Register [dated August 17, 2015 (volume 80, FR 49325)]

CMS estimates an overall $378 million and .4% Medicare revenue increase from the provisions in this rule (0.6% Increase in base rates does not include $1.2B reduction in IP DSH UCC payments)

CMS is revising IPPS for changes arising from their experience with the systems and to implement certain provisions made by the following Public Law: Affordable Care Act of 2010 (the “ACA”) Pathway for Sustainable Growth Reform (SGR) Act of 2013 Protect Access to Medicare Act of 2014 Improving Medicare Post-Acute Care Transformation Act of 2014 Medicare Access and CHIP Reauthorization Act of 2015

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FY 2016 inpatient final rule Standardized Payment Rates

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Labor Nonlabor Labor Nonlabor Labor Nonlabor Labor Nonlabor$3,780.13 $1,651.09 $3,753.31 $1,639.38 $3,753.31 $1,639.38 $3,726.50 $1,627.66


Did NOT Submit Quality Data and is NOT a Meaningful EHR User (Update = 0.75 Percent)

FY 2015

NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (62 PERCENT LABOR SHARE/38 PERCENT NONLABOR SHARE IF WAGE INDEX IS LESS THAN OR EQUAL TO 1)--FY 2015

NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (69.6 PERCENT LABOR SHARE/30.4 PERCENT NONLABOR SHARE IF WAGE INDEX IS GREATER THAN 1)--FY 2015

Submitted Quality Data & is a Meaningful EHR User (Update

= 2.2 Percent)

Did NOT Submit Quality Data & is a Meaningful EHR User

(Update = 1.475 Percent)

Submitted Quality Data & is NOT a Meaningful EHR User




Did NOT Submit Quality Data and is NOT a Meaningful EHR User (Update = -0.1 Percent)

FY 2016

NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (62 PERCENT LABOR SHARE/38 PERCENT NONLABOR SHARE IF WAGE INDEX IS LESS THAN OR EQUAL TO 1)--FY 2016

NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (69.6 PERCENT LABOR SHARE/30.4 PERCENT NONLABOR SHARE IF WAGE INDEX IS GREATER THAN 1)--FY 2016

Submitted Quality Data & is a Meaningful EHR User (Update

= 1.7 Percent)

Did NOT Submit Quality Data & is a Meaningful EHR User


Submitted Quality Data & is NOT a Meaningful EHR User



FY 2016 inpatient final rule Standardized Payment Rates

FY 2016 includes a 2.4% market basket increase less the ACA <.5%> reduction Less the ATR mandated <0.8%> reduction ($11B recoupment by 2018) Less the <0.2%> reduction for Inpatient Admission and Medical Review Criteria for a net increase of 0.9% After accounting for other budget neutrality adjustments, the real increase in

base rates is only 0.6%

Hospitals not reporting quality measures but achieving meaningful use will see a 0.8% increase in base rates over similarly situated hospitals from the prior year (still significantly below the full update)

Hospitals reporting quality measures but not achieving meaningful use will see a 0.17% increase in base rates over similarly situated hospitals from the prior year

Hospitals failing in both categories will see a base rate increase of 0.028%

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FY 2016 inpatient final rule ACA/ATR/Other Mandated Reductions to Keep in Mind

Productivity adjustment - .5% reduction in FFY 2016 American Tax Relief Act documentation and coding adjustment-

0.8% Adjustments for excess readmissions-potentially up to 3% now as was

the case in FFY 2015 Adjustments for Value Based Billing Continuing Reductions to Medicare DSH Coming Reductions to Medicaid DSH Hospital acquired conditions-1% to applicable hospitals Admission and Medical Review Criteria adjustment- 0.2% Reductions (sequestration) resulting from the increase in the debt ceiling

April 1, 2013 that are continuing Note: ATR 0.8% reduction every year from FFY14-FFY17 was supposed to reverse in it’s entirety in FY18. Section 414 of MACRA passed on 4/16/15 instead mandates adding back 0.5 every year from FY2018-2023 6


FY 2016 inpatient final rule Outliers

Fixed portion of the outlier threshold is set at $22,544 (from current amount of $24,626 and proposed amount of $24,485)

Added to the prospective payment rate for the DRG CMS continued the FY 14/15 methodology, using cases from FY 14 MedPAR file,

adjusting for 2 year charge increase (7.667%) based on 12 Months ended March 2015/ twelve months ended March 2014, and inflating CCRs for estimated two year change in charges and cost

For FY 16, a case will qualify as cost outlier if the cost of the case plus the (operating) IME and DSH (both types) payments is > the prospective payment rate for the MS-DRG, plus the fixed loss amount of $22,544

CMS currently estimates FY 2015 outlier payments will be 4.65% of total DRG payments, rather than the 5.1% targeted and actual FY 2014 outlier payments are now estimated to be 5.38%(PY estimate was 5.71%). 2014 was the first time in many years that outlier payments exceeded the mandated 5% minimum target

Reconciliations are still being applied; we are seeing more of these as cost reports are settled. Despite some commenters concerns in both FFY 15 and FFY 16 Final Rules, CMS felt that the impact of these reconciliations were not material enough to consider in the establishment of thresholds.

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FY 2016 inpatient final rule Wage Index Changes/Update

The imputed Rural Floor is extended again for one more year through September 30, 2016 The rural floor applies to 346 hospitals(442 last year), but the imputed rural floor now only

applies to 21 NJ hospitals and 4 Rhode Island hospitals. Although Delaware is now all urban, no imputed rural floor applies

Still a national rather than statewide adjustment for rural floor budget neutrality(regular and imputed)-big winners are California and Massachusetts

It is still critical to optimize wage data (including OMS!), because: Any new methodology could still be based on reported average hourly wage data The rural floor is only extended for one year The rural floor is based in part on the highest wage index in the applicable state and hospitals should not

assume there will always be NJ hospitals in the NYC CBSA Wage data used to calculate wage indices is three years-it takes a long time to effect change Hospitals in outlying counties of Philadelphia thought they did not need to optimize and some saw a drop

from 1.07 to .99. Some can’t reclassify and others need to wait a year or more Outmigration adjustments are impacted also Preventing another hospital from meeting the 108% individual reclassification criterion could force a group

request to your benefit Non-acute services receive your home area wage index, regardless of reclassification

Note that OMS increase impacts can be more immediate as they apply to all years

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The February 2013 OMB labor market definitions(2010 Census) were adopted in FFY 2015 37 Counties (12 hospitals) changed from urban to rural 105 Counties (81 hospitals) changed from rural to urban 46 Counties changed urban CBSAs CMS considered but did not adopt CBSA status for “Micropolitan” areas (pop. 10K-50K) In New Jersey, Bergen, Hudson, Passaic, Middlesex, Monmouth, and Ocean Counties were moved

into the now very diluted NYC CBSA. Somerset County is now part of the Newark CBSA. Reclassifications were also affected for a number of hospitals as well

Transitional adjustments were incorporated and many continue: The hospitals that changed from urban to rural or from rural to urban were held harmless for three

years, unless they were reclassified Hospitals that had changed urban CBSAs were provided a one year only transition adjustment only at

50% of the difference in wage index-so these hospitals are no longer receiving the hold harmless adjustment

Outmigration adjustments were updated for FFY16 to incorporate the new CBSA definitions

Pension reporting change-now based on current and two preceding years rather than current, prior and subsequent-hospitals can amend until mid October 2015

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Updated Timetable for wage index development-key dates: Preliminary PUF posted mid May Deadline for Hospitals to request revisions first week in September 13

months prior to effective date (exception for Pension this year only) Deadlines for MACs to complete desk reviews-Mid November Updated PUF reflecting MAC revisions-Late January Deadline for Hospitals to request limited revisions (only error correction)-

Mid February MAC deadline to review requests and transmit to CMS-Mid to late March Deadline for hospitals to appeal(on record)-Early April Final PUF-Late April Deadline for very limited Hospital appeal-Late May Final Rule-August 1 Effective date-October 1

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FY 2016 inpatient final rule Occupational Mix Adjustment to the FY 2016 Wage Index

CMS also updated to the 2013 occupational mix survey data to calculate the occupational mix adjustment for the FY 2016 wage index

National average hourly wage is $40.2555 (FY 2015 was $39.2591) {2.5%} National average hourly wages for each occupational mix nursing

subcategory are as follows:

Wages and hours survey were collected for calendar year 2013 in July 2014 and are being implemented for the first time with the FFY16 wage index

Still using 1.0 for hospitals not submitting data, but will ask in future surveys for reasons why hospitals are not submitting the data-response rate 93.2% penalties are still possible

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Occupational mix nursing subcategory Average hourly wage National RN $38.823902202 National LPN and Surgical Technician $22.767361175 National Nurses Aides, Orderlies, and Attendants $15.955866208 National Medical Assistants $18.006207097 National Nurse Care Category $32.875956041


FY 2016 inpatient final rule Medicare Geographic Classification Review Board Reclassifications

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Hospital must apply to reclassify 13 months prior to the start of the fiscal year for which reclassification is sought 282 hospitals were approved for wage index reclassifications by MGCRB

for FY 2016 (effective 3 years). CMS indicated 841 hospitals are in a reclassification status for FY 2016

(includes 2015 and 2014 reclassifications) Applications for FY 2017 reclassifications were due by September 1,

2015 Overall, 841 reclassified hospitals is significantly up from 734 in the

prior year as changes in CBSA definitions help some providers achieve reclassification. The impact of these are applied as a budget neutrality adjustment to the base rates.


FY 2016 inpatient final rule Disproportionate Share

SSI: CMS has now published SSI factors through Federal Fiscal Year 2013 and Hospitals

are seeing final cost report settlements, with many now settled through 2011/2012 The Allina case seems to be in limbo as CMS did not appeal to the Supreme Court but

appears to be in no rush to resolve the issue. There is even some thought that they may try to get around the issue by reissuing SSI factors with their existing methodology as the appeals court did not direct them to calculate the factor using a specific methodology. The MACs have issued “notice of intent to reopen” letters for SSI.

Implementation of Section 3133 of the ACA-Background: Applicable to discharges dated on or after October 1, 2013 Reduces payments to hospitals for operating DSH (capital DSH is not affected) Generally, breaks down payments into “Empirically Justified” payments and

“Uncompensated Care” payments Empirically Justified payments are based on 25% of what each hospital would have

received under the previous methodology Uncompensated Care payments are based on three factors

– 75% of what each hospital would otherwise receive – A reduction adjustment for the change in uninsured – Each hospital’s share of uncompensated care as a percentage of all hospitals

uncompensated care 13



Empirically Justified DSH is calculated based on the old methodology multiplied by 25%-still subject to cost report reconciliation

Eligibility for “Uncompensated Care” payments also subject to reconciliation, but components are prospective, and are the result of multiplying the following:

1. 75% of what hospitals would otherwise receive based on Office of Actuary Estimate of 2016 DSH payments-$10.058 Billion per the final rule, which is prospective

2. A reduction adjustment for the change in uninsured = 1- the percentage change in uninsured, reduced further by 0.2% in 2015 and 2016. CMS is basing this on CBO estimates for 2016. Adjustment = 1-[(.115-.18)/.18]-.002 = .6369. This amount is prospective, and was .9643 in FFY 2014 and .7619 in FFY 2015.

3. Each hospital’s share of uncompensated care as a percentage of all hospitals uncompensated care-amount is also prospective:

CMS considered but opted against worksheet S-10 data as it was deemed unreliable-this could (will?) change in future years

Ultimately CMS decided to use Medicaid days and SSI days based on the traditional DSH definition and based on the most recently available cost report data (2012 and 2011 cost reports) in worksheet S-3, S-2 and published 2013 SSI-also prospective-Note they opted to stay with older cost report data for Medicaid days

See the CMS FFY 2016 IPPS Final Rule Home Page for published amounts by hospitals

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Interim payments and settlement of operating DSH: Empirically Justified DSH to be interim reimbursed and settled using the prior

methodology excepting the 25% adjustment (75% reduction) Eligibility for “Uncompensated Care” payments also subject to reconciliation;

Hospitals not meeting the empirically justified thresholds will not receive uncompensated care payments either

Interim payments will be made on a per case basis and will be estimated based on historic average discharges and the Office of the Actuary estimated DSH payments for each hospital-to the extent that actual discharges are higher or lower in FY 2016, the payments will be reconciled to prospectively determined amounts for eligible hospitals

Hospitals not deemed eligible will receive payments at final settlement if they qualify for DSH by meeting the 15% threshold applicable to empirically justified DSH payments. For purposes of this, each hospital’s uncompensated care as a percentage of aggregated uncompensated care is published, even for providers that have not previously qualified for operating DSH. The aggregated uncompensated care is only made up of hospitals that were expected to qualify based on Office of Actuary estimate.

CMS recognizes that this may result in slightly higher or lower DSH payments overall.

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Methodology discussed in the final rule: CMS is still adamant about no retrospective reconciliation of the

prospective components of the adjustment In FFY15, Medicaid and SSI days were be based on the most recently

available 12 month cost report available to CMS in the March prior to the final rule. For FFY16, CMS is continuing to use cost report periods used for FFY15, though amounts are updated based on March HCRIS-this levels the playing field for hospitals and reduces the concern that the MACs will not transmit amended cost report data to CMS on a timely basis

Providers again suggested the days be wage index adjusted to reflect cost-CMS rejected this

CMS indicated that they will discuss a timeline for transitioning to S-10 in the FFY 2017 proposed rule

CMS continues to use very old CBO projections for the rate of reduction in uninsured

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Ramifications of DSH changes: Places greater emphasis on reporting of Medicaid days on as filed cost

reports since the Medicaid days will not be adjusted at final settlement for the uncompensated care payments

Forces hospitals to consider updating/resubmitting cost reports-puts hospitals with June/July/August year ends at a disadvantage as their cost reports are more current. CMS decision to stay with previously used cost report years in FFY16 mitigates this.

Creates potential abuse/error issue related to such reporting as Medicaid eligible patient days on the filed cost report are not final, and even if the support is audited and adjusted, question remains whether the MAC is updating the database

The fact that CMS was leaning towards using the S-10 data for the uncompensated care cost and still insists that they will do so in the future places more importance on accurately completing that worksheet as well

Provider combination reimbursement impacts may be very different now as the uncompensated care pool amounts don’t work the same way that traditional DSH does

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FY 2016 inpatient final rule Changes for Inpatient Capital-related Costs

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Comparison of factors and adjustments: FY 2016 capital federal rate and FY 2015 capital federal rate

FY 2016 FY 2015 Change Percent Change Update factor 1.0130 1.0150 1.0130 1.30% Geographic Adjustment Factor (GAF) 0.9973 0.9986 0.9973 0.27% Outlier adjustment factor 0.9365 0.9373 0.9982 0.18% Capital federal rate $438.65 $434.26 1.0085 0.85%


FY 2016 inpatient final rule Changes to Hospitals Excluded from IPPS

For cancer and children hospitals and religious nonmedical health care institutions (RNHCI), the FY 2016 rate of increase is 2.4 percent

This update percentage is also used to update Medicaid rates in some states, including New Jersey

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FY 2016 inpatient final rule Add-on Payment for New Services and Technologies

Three new technology payment adjustment expired at end of FFY15: Glucarpidase (Trade Brand Voraxaze) based on ICD-9 code 00.95 at a cost of

$22,500 per vial. Average Medicare cases use 4 vials, for a maximum add-on of $45,000

Zenith Fenestrated Abdominal Aortic Aneurysm (AAA) Endovascular Graft based on ICD-9 code 39.78, with a maximum add-on of $8,171.50

Zilver PTX Drug Eluting Stent with a cost per stent of $1,795 and averaging 1.9 stents per case, for cost of $3,410.50 and a maximum add-on of $1,705.25

New technology applications approved in prior years and continued for 2016: KCentra at a cost of $635 per vial. Average Medicare cases use 5 vials, costing $3,175,

for a maximum add-on of $1,587.5. Not approved for hemophilia patients, because there is already an add-on for blood factors in those DRGs. Now based on ICD-10 code 302831B1

Angus II Retinal Prosthesis System with a cost of $144,057.5 and a maximum add-on of $72,028.75

NeuroPace Responsive Neurostimulator (RNS) System now based on ICD-10 code ONHOON2 with code OOHOOMZ, with a maximum add-on of $18,475

Abbot Vascular MitraClip System Device based on ICD-10 code 02U63J2, with a maximum add-on of $15,000

CardioMEMs Heart Failure Monitoring System based on ICD-10 code 02HQ302 or 02HR30Z, with a maximum add-on of $8,875

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FY 2016 inpatient final rule Add-on Payment for New Services and Technologies

Nine new applications filed, two withdrawn, one did not receive FDA approval Two New technology applications approved for FY 2016: Blinatumomab (BLINTCYTO) based on ICD-10 codes XW03351 or XW04351

with a maximum payment add-on of $27,017.85 LUTONIX Drug-Coated Balloon Percutaneous Transluminal Catheter and

IN.PACT Admiral Paclitaxel Coated Percutaneous Transluminal Angioplasty Balloon Catheter with a maximum payment add-on of $1,035.72

Four applications not approved: VERASENSE Knee Balancer System – no substantial clinical improvement WATCHMAN Left Atrial Appendage Closure Technology – no substantial

clinical improvement DIAMONDBACK 360 Coronary Orbital Atherectomy System – Failed newness

and substantial clinical improvement criteria CRESEMBA (Isavuconazonium)- Failed newness and substantial clinical

improvement criteria

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FY 2016 inpatient final rule Additional Technical Changes

Post Acute Transfer DRG Changes: – DRGs 273 and 274 are now subject to Post Acute Transfer reimbursement methodology

Not much discussion in this rule related to potential wage index methodology changes

CMS proposed to eliminate the simplified cost report allocation method-did not finalize, but made it easier for hospitals to use the method but also use dollar value for Major Movable Equipment expense

Bundled Payment for Care Improvement-seeking comments Note that the OPPS proposed rule addressed the “two midnight rule” and

that the delay in enforcement currently expires 9/30/2015 CMS requested comments on inconsistent cost reporting and use of non-

standard cost center codes in the development of DRG weights Not a change but IME factor is still 1.35

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FY 2016 inpatient final rule Changes to LTCH PPS FY 2016

DRG classification changes are consistent with IPPS MS-DRG changes

The standard federal rate for FY 2016 is $41,726.85 versus previous rate of $41,043.71

LTCHs not submitting quality data will receive 2% less The fixed loss outlier threshold will increase from $14,972 to

$16,423 in FY 2016 The labor share continues to decline and was finalized at 62% (vs.

62.306% in the prior year) New Site Neutral Payment Methodology:

Mandated by Pathway for SGR Reform Act of 2013 Applies to patients with principal diagnosis of psychiatric or

rehabilition (DRGs 876, 880-887, 894-897, or 945-946

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FY 2016 inpatient final rule Changes to LTCH PPS FY 2016

New Site Neutral Payment Methodology Exceptions: The patient received at least 3 days of ICU services in the

discharge immediately preceding admission to the LTCH The patient received 96 hours of ventilation services at the

LTCH Payment is the lesser of IPPS per diem or 100% of cost For cost reporting periods beginning in FFY 2016 or 2017, 50/50

blended rate of site neutral payment and LTCH rate Interrupted stay policy and 25% threshold policy will apply to

site neutral payment cases SSO policy will not apply Beginning with FFY 2016, DRG weights will be calculated

excluding site neutral payment cases Separate outlier threshold of $22,544

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FY 2016 inpatient final rule Coding/DRG Provisions in the Rule

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FY 2016 inpatient final rule Coding Updates

CMS considers DRG changes based on comments received by December 7th of the year prior to the final rule. Comments not addressing potential changes discussed in the proposed rule are reviewed and addressed in the subsequent year.

CMS adopted ICD-10 MS-DRGs version 33 for FFY 2016 CMS added new DRGs 273 and 274 for Percutaneous Intracardiac Procedures with MCC

and without MCC, respectively DRGs 237 and 238 were deleted and replaced with the following five DRGs:

268 – Aortic and Heart Assist Procedures except Pulsation Balloon with MCC 269- Aortic and Heart Assist Procedures except Pulsation Balloon without MCC 270 – Other major Cardiovascular procedures with MCC 271 - Other major Cardiovascular procedures with CC 272 – Other major Cardiovascular procedures without CC/MCC

Code combinations to capture the Version 33 structure for ICD-10 were finalized related to knee replacements for DRGs 466-468, 628-630

New titles were adopted for DRGs 456-458 for Spinal Fusion procedures For DRG 775 (Vaginal Delivery without complicating diagnosis, CMS finalized it’s

proposal to designate 3EOP76Z, 3EOP77Z, 3EOP7SF, 3EOP7SF, 3EOP83Z, 3EOP86Z, 3EOP87Z, 3EOP8GC, and 3EOP8SF as non O.R. 26


FY 2016 inpatient final rule Coding Updates

Six ICD-10-PCS codes were identified as O.R. procedures and pointed to DRG 264: 02HQ00Z (Insertion of pressure sensor monitoring device into right pulmonary artery, open approach) 02HQ30Z (Insertion of pressure sensor monitoring device into right pulmonary artery, percutaneous approach) 02HQ40Z Insertion of pressure sensor monitoring device into right pulmonary artery, percutaneous endoscopic

approach) 02HR00Z, 02HR30Z, and 02HR40Z, representing the same procedures as above, respectively but to the left

pulmonary artery

ICD-10-PCS codes OLBTOZZ and OLBSOZZ (Excision of tendons) are assigned to DRGs 579-581(Other skin subcutaneous tissue and breast procedures)

ICD-10 codes N13.1 and N13.2 were added to list of principal diagnoses that act as their own CC

As always, many additional coding changes were requested by commenters and rejected as unnecessary by CMS

CMS also updated the list of DRGs subject to the payment policy for replaced devices offered without cost or credit; adding 266, 267, and replacing 237 and 238 with 268-272

No new diagnosis or procedure codes and CC exclusion list not changed Many more code changes with FFY 2017 final rule now that ICD-10 is here

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FY 2016 inpatient final rule Inpatient Psychiatric Facility (IPF) PPS

Market basket increase of 2.4% less ACA reductions of 0.7% nets to 1.7%. Overall CMS estimates $75M payment increase

Base per diem rate increasing from $728.31 to $743.73 (2.1%) ECT rate increasing from $313.55 to $320.19 (2.1%) Labor share of rate significantly increasing from 69.294% to 75.2% New CBSA definitions have been adopted 1 year transition with a 50/50 blend of wage index values

3 year phase out for IPFs losing their rural adjustment No phase out for urban>rural IPFs because they will receive the rural adjustment

factor There are no changes to facility and patient specific adjustments for Emergency Room,

teaching, rural status, DRG, comorbidities, patient age and day of stay Outlier threshold is increasing from $8,755 to $9,580

Goal is for outlier payments to be 2% of total payments IPFQRP was implemented in FFY 2014

As with IPPS, measures collected continue to be revised Will lose 2.0% if quality data is not submitted ($729.10 base per diem and $313.89

ECT rates) 28


FY 2016 inpatient final rule Inpatient Rehabilitation Facility (IRF) PPS

Market basket increase of 2.4% less ACA reductions of 0.7% nets to 1.7%-CMS expects payments to increase by $135M

Base case rate increasing from $15,198 to $15,478 (1.8%) Labor share of rate significantly increasing from 69.294% to 71% CMS is adopting the new CBSA wage indices:

1 year transition with a 50/50 blend of wage index values 3 year phase out for IRFs losing their rural adjustment No phase out for urban>rural IRFs because they will receive the rural

adjustment factor There are no changes to facility and patient specific adjustments for LIP (low-

income payment), teaching, rural status CMG weights and ALOS based on FFY 2014 data-no changes to

categories/definitions Outlier threshold is decreasing from $9,149 to $8,658-goal is for outlier payments

to be 3% of total payments (CMS estimates 2.9% in FFY 2015) IRFQRP was implemented in FFY 2014 and measures are changing here also-

lose 2% if quality data not submitted

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FY 2016 inpatient final rule Skilled Nursing Facility

Market basket increase of 2.3% less ACA reductions of 1.1% nets to 1.2%, and CMS estimate of increased payments for FFY 2015 is $430M

The labor share of the rate is slightly decreasing from 69.513% to 69.10%

The 128% AIDS adjustments to specific RUGS categories will continue for FFY 2016

SNFs will be required to submit staffing data for direct patient care starting July 1, 2016

New CBSAs were adopted in the prior year, therefore fully in effect for FY 2016

As elsewhere, quality measures are being collected (starting with pressure ulcers, major falls, and functional and cognitive status) with payment adjustments beginning in FFY 2018

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Questions???? Steve Frankenbach Senior Director, Network Reimbursement Services St Luke’s University Health Network 801 Ostrum Street, Bethlehem, PA 18015 Phone (484) 526-3093 [email protected]

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