What a year it was for nursing homes!

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What a year it was for nursing homes!
What a year it was for nursing homes!

It's too bad that 2010 should end with a damning report about Medicare overbilling. It's not exactly the best way for nursing home providers to greet the new year.

The report in question was released just before Christmas. It concluded that many skilled nursing facilities billed for higher-paying Resource Utilization Group (RUG) categories in 2008. Also, for-profit skilled SNFs were far more likely than nonprofit or government SNFs to invoice for higher paying categories. For-profits billed 32% of RUGs in the ultra-high category, compared to 18% of nonprofits, the Office of Inspector General found.

The American Health Care Association immediately countered, noting that nursing homes are treating more medically complex patients. As a result, more residents are being placed in higher-paying RUG categories.

"Our 2010 Quality Report finds over 50% of Medicare patients treated in nursing facilities are categorized as having ‘major extreme severity of illness,' and that nursing facilities represent the lowest-cost institutional setting,” Bruce Yarwood, AHCA president and CEO, said. “In addition, since 2003, there has been an annual increase in the percentage of Medicare beneficiaries discharged to the community in 100 days.”

It's fair to say that accusations of RUGs overbilling represented one of the biggest stories for long-term care this year. Remember that report in The Washington Post in March? It too alleged that nursing homes are gaming the payment system.

Here are my other top picks for the major events of 2010:

10. The selection of Donald Berwick to head the Centers for Medicare & Medicaid Services—Some opponents charged that his statements advocating care counseling amounted to healthcare rationing. As a result, President Obama avoided possibly contentious Senate hearings by making him a recess appointment. But Republicans are not about to let the appointment go and plan to grill him more in 2011.  

9. Dennis Bozzi being accused of embezzling $670,000 in funds from the Life Services Network of Illinois—This former head of the affiliate of the American Association of Homes and Services for the Aging made national news.

8. The selection of Kansas Gov. Mark Parkinson to take over leadership of AHCA—The announcement that such a high-profile person would lead the largest nursing home association was welcome news to providers. Still, members will not soon forget Bruce Yarwood and his accomplishments at the helm of AHCA .

7. Healthcare reform and the passage of the CLASS Act—Some argued there was not that much for long-term care in the healthcare reform bill. Still, transparency requirements, new plans for bundled payments and accountable care organizations, and other demonstration projects will certainly affect long-term care. The CLASS Act which the American Association of Homes and Services for the Aging championed, also made it in the 2,700-page document. Whether or not this insurance program will work and be affordable remains a topic for debate.

6. More Medicaid funding for states—This political football finally found the end zone in August when Congress approved an additional $16.1 billion in Medicaid dollars to states. Unfortunately, it will run out in June. Most likely, it won't be enough to satisfy states, which could still be grappling with severe budget problems.

5. The hullabaloo surrounding drug policies in nursing homes—Sen. Herb Kohl (D-WI), head of the Aging Committee, was so incensed about the slow delivery of controlled substances to residents that he put a hold on the nomination of Michelle Leonhart to head the Drug Enforcement Agency. He recently lifted the block when the DEA said it would address and improve the issue.

4. HCP Inc.'s $6.1 billion purchase of HCR ManorCare Inc—This deal, which represents the largest real estate investment trust transaction in the United States three years, points to the bigger trend of REIT activity in the long-term care sector. Since these companies have easier access to cash, they are making hay in this lackluster economy. Look for more hefty deals ahead.

3. The Republican takeover of the House—This might not directly relate to long-term care, but Republicans' plans to repeal the healthcare reform law could spell trouble for the CLASS Act.

2. The start of MDS 3.0—Considered the biggest change for long-term care since the development of the prospective payment system in the late 1990s, this resident assessment tool introduces some important changes for long-term care providers. One is the introduction of resident interviews. Of course, accompanying the start were some major system glitches. No one is likely to forget this implementation for a while.

1. The bauble over RUG-IV—It's a go; it's not a go. It's going! Healthcare reform introduced a serious wrinkle for the classification system. While it was set to begin on Oct. 1, lawmakers decided they'd change the start date to next year. Then, during the lame-duck session this month, they repealed the delay. Relief could be felt all the way around.  

Other honorable mentions:

—Cynthia Morton taking the reins of the National Association for the Support of Long Term Care.

—AAHSA changing its name to LeadingAge. The new moniker takes effect in January.

—Congress extending the therapy caps exceptions process through the end of 2011. A delay in payment cuts to Medicare doctors will similarly continue.

—New therapy rules. The Centers for Medicare & Medicaid Services approved a rule that will trim reimbursements when residents receive multiple procedures the same day. Reductions in payments for concurrent therapy also concern therapy providers.

—The introduction of legislation re-examining the way nursing homes are inspected. It is called the Improving the Quality of Nursing Homes Act of 2010.

—More breakthroughs in Alzheimer's research. Among them, a study found that spinal tap fluid accurately identifies those who will develop Alzheimer's.

There is certainly no shortage of stories to follow this coming year. Best wishes, long-term care providers, for a fruitful 2011!

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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