CMS to implement Interim payment system for RUG-IV in October

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[Editor's Note: Previous "SPECIAL BULLETIN" story has been revised to reflect new information provided by the Centers for Medicare & Medicaid Services.] 

A new payment plan for the RUG-IV case-mix classification system will take place on Oct. 1, the Centers for Medicare & Medicaid Services said Monday.

As it builds a payment infrastructure, CMS will apply interim payment rates, effective Oct. 1, that reflect “not only the use of MDS 3.0 but also the new RUG-IV system in its entirety,” CMS said in a release issued on Monday.

“Once the necessary infrastructure is in place, we will then retroactively adjust the rates to reflect a hybrid RUG-III (HR-III) system which incorporates RUG-IV's specific revisions on concurrent therapy and the look-back period within the framework of the existing 53-group RUG-III system, along with the use of MDS 3.0,” CMS continued.

CMS originally was planning to implement RUG-IV this October, along with the new resident assessment instrument, known as MDS 3.0. But the healthcare reform law pushed the start of RUG-IV (with the exception of concurrent therapy and certain look-back provisions) back until 2011.

Congress is expected to vote this week on the American Jobs and Closing Tax Loopholes Act bill, which would repeal the delay and “thus eliminate the need to retroactively adjust payments,” CMS noted in its update.

Providers have been urging CMS to implement the RUG-IV groupings alongside MDS 3.0 this October. CMS recently acknowledged in an “Open Door Forum” that it did not have a way to properly calculate reimbursement rates as a result of the delay. The groupings were designed to operate in sync with the MDS resident assessment tool.

Restoring the original implementation date for RUG-IV “will allow CMS to make payments with the least disruption for providers and beneficiaries,” CMS noted in its update.