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How are you faring with RUGs refinement?

August 1, 2008
by Patricia J. Boyer, MSM, RN, NHA
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Medicare giveth and taketh away. Coping with a frustrating reimbursement system

Prior to 2006, the skilled nursing provider community felt they were managing the Resource Utilization Group (RUG) reimbursement system well. They were rolling along with about 75% of their days in the Rehab RUG levels. Rehab companies were also very happy with these results. The push was to increase the rehab minutes to get the highest RUG level possible. Many facilities depended on their rehab staff to determine the best Assessment Reference Date (ARD) for this purpose. Many rehab companies also saw the advantage of providing higher minutes of therapy to capture higher reimbursement. In addition, rehab companies provided a lot of oversight of their staff and additional “value added” services, including education and participation in meetings and quality assurance activities, all to best meet the federal Center for Medicare & Medicaid Services (CMS) reimbursement criteria.

A shift in emphasis

But then, in 2006, the long-term care world changed. Suddenly the emphasis was on capturing the nine new combined RUGs categories resulting from CMS's RUGs refinement process. Providers did a pretty good job of it and, by 2008, have realized over 30% of their RUG days in the combined RUG categories, with some companies realizing over 38%. CMS had projected that only 18.63% of the RUG days would shift to the upper nine RUG categories. The results were double what CMS had projected and providers have been very happy with the resulting increased reimbursement.

Not surprisingly, CMS decided in 2008 that providers had done too good a job of reflecting the actual care they were providing. So, once again, CMS is making changes. There are several things anticipated to happen in the next year, and some of those changes are being seen already.

First, let's look at how providers implemented the four key strategies to capture reimbursement after January 1, 2006. These strategies continue to work well for many facilities today.

1. Preadmission screening. Facilities have always encouraged their staffs to capture all clinical indicators that would apply to the resident from the acute hospital stay. But, prior to 2008, the reality was that many facilities only looked for those clinical indicators when the resident was not having rehab services. Retraining efforts looked at assisting facilities in capturing this critical information for all residents and identifying the last date that the Extensive Services qualifiers of IV fluids, IV medications, tracheostomy care, suctioning, and ventilators were received. This crucial information then gave the facility the ability to determine the best ARD for each resident, with the best date, meaning the best reimbursement.

Of course, there was some initial fallout, especially for those facilities with outside therapy contracts, where the push was to get the highest minutes possible. Facility staff had to amend contracts to make sure that they met the needs of the facility as well as the needs of the rehab provider; the contract needed to be fair to both. Many facilities found that per-minute contracts fit that need. Per-minute meant that the facility paid the therapy provider only for the actual minutes of therapy provided. It is, however, surprising that now, in 2008, some facilities still do not understand the need for nursing and therapy to collaborate on this process.

2. Strategic management of the ARD. Once a facility learned how to capture the correct data from the acute care stay, the next lesson was how to strategically manage that information. This meant that sometimes it was better to have fewer therapy minutes and capture an Extensive Services RUG than to capture the highest Rehab RUG level. In 99% of cases, this strategy meant more reimbursement for the facility. Managing RUGs is, in effect, “getting paid what you deserve to get paid for the care you are providing.” To do this, the facility needed to have a good preadmission screening process and good communication between the Rehab Director and the MDS nurse.

3. Care management/case management. The third important component of RUGs management is good case management or care management. This means that an interdisciplinary approach to resident care is essential to map out the appropriate course of care. It is the realization that more therapy is not always the best for all residents. Sometimes, clinical comorbidities need to be managed first, and the resident needs to stabilize before an aggressive course of therapy is appropriate. It may be the approach of utilizing Rehab Low with restorative nursing at the onset of therapy and then increasing up to Very High when the resident is able to handle that level of service. It also means weaning residents off therapy prior to their going home so that they recover more successfully in the home environment. Too often, facilities expect that a resident can go from over 500 minutes of therapy over five days to home health therapy of maybe three times a week. The staff needs to make sure that the resident can carry over learned tasks to the home environment before discharge.

4. ADL coding. The last important strategy is accurate coding of Activities of Daily Living (ADLs). In the Refined RUGs system, in order for a resident to qualify into a combined RUG category, the resident needs to meet the requirements of rehab RU to RL, have at least one Extensive Services qualifier, and have an ADL sum score of at least 7. That means that a resident who is very independent or only minimally dependent (under 7 in ADL score), will not qualify for a combined RUG category, even if meeting the other qualifiers.