Patricia Boyer, MSN, NHA, RN

Providers have done well for themselves under the new Medicare payment system. Too well, according to the federal government.

In an unusual move, CMS proposed a two-pronged payment system that deals with much higher than anticipated outlays. The first option would basically cut payments by $4 billion dollars if providers continue to place residents in the highest possible reimbursement categories. The second plan gives the industry a $500 million raise if coding falls back in line with historic trends.

Providers increased claims in the Rehab Ultra High payment category to almost 41% during the first quarter, said Patricia Boyer, president of Boyer and Associates, Milwaukee. That’s far above the 17% level of five years ago, she noted. Federal regulators believe the uptick is a byproduct of providers taking advantage of the revised RUG-IV payment system that went into effect last October.

During a McKnight’s Super Tuesday webinar in May, Boyer said regulators are studying rehab filing rates for the second quarter of this year to help determine how aggressively they’ll pursue funding cuts, if at all. “Facilities are putting people into high RUG levels almost as an automatic [default],” Boyer told the webcast audience. “That’s one of the dangers we have gotten ourselves into.”