Delay of RUGs-IV confuses calculation of nursing home reimbursement rates, regulators say

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Ryan budget proposal calls for Medicare vouchers, Medicaid transformation
Ryan budget proposal calls for Medicare vouchers, Medicaid transformation

Federal health officials said Thursday that they still don't have a way to calculate proper Medicare nursing home reimbursement rates after mandated changes are to take place this fall with the introduction of MDS 3.0.

A provision of the recently passed healthcare reform law partially delays implementation of new payment groupings—the fourth set of Resource Utilization Groups (RUGs). That is causing havoc because the groupings were devised to operate in sync with a new version of the MDS resident assessment tool, which is set to go live Oct. 1.

“What we don't have is a grouper that actually handles the amendment provisions,” Sheila Lambowitz of the Centers for Medicare & Medicaid Services told listeners on a SNF Open Door Forum conference call. “We don't have a way to use existing systems to pay a modified RUGs III system with the addition of concurrent therapy and look-back changes."

While CMS must proceed with implementation of the dramatically changed MDS 3.0 resident assessment tool on Oct. 1, Congress delayed implementation of all but the provisions regarding concurrent therapy and look-back rules for RUGs-IV.

Lambowitz said Thursday that CMS staff is still in the process of briefing agency leadership and trying to figure out how to make the systems work together.

“If you just hold on for a couple of weeks, we'll probably know a lot more on how to do this,” she said. “We're looking to see how we can comply with the new legislation without jeopardizing successful implementation of MDS 3.0, or RUGS-IV a year later.”

Lobbying efforts are underway to get legislation passed that would mandate that all parts of RUGs-IV be implemented Oct. 1, concurrently with MDS 3.0. One possibility is that it could be part of a Senate bill that would soon address Medicare physician payment levels.