| PROGRAM
MEMORANDUM
INTERMEDIARY |
Department
of Health
and Human Services Health Care Financing Administration |
Transmittal No. A-99-20 Date MAY 1999
CHANGE REQUEST 654
SUBJECT: Payment Safeguard Review of Skilled Nursing Facility Prospective Payment Bills
The purpose of this Program Memorandum (PM) is to provide instructions for conducting medical review of skilled nursing facilities (SNF) prospective payment system (PPS) bills according to the Interim Final Rule (IFR), HCFA-1913-IFC, published in the Federal Register dated May 12, 1998. Subsequent issuances, Part 1 of Provider Reimbursement Manual, Transmittal #405 dated July 1998 and Program Memorandum A-98-45 issued in December 1998, provided clarification of coverage requirements for SNFs under the prospective payment system. These subsequent issuances should not be interpreted to supersede the IFR. Therefore, you are to follow the guidelines in this Program Memorandum until we provide you with further instructions based on the forthcoming Final Rule.Section 4432 of the Balanced Budget Act (BBA) of 1997 modified how Medicare payments are made for SNFs. Effective with cost reporting periods beginning on or after July 1, 1998, Medicare began paying SNFs on the basis of a prospective payment system. Section 1816 of the Social Security Act requires fiscal intermediaries (FIs) to conduct audits of providers' records as needed to ensure that payments are proper. It is under this authority that the following medical review instructions will be implemented.
A. General--Effective with cost reporting periods beginning on or after July 1, 1998, Medicare began paying SNFs under a PPS. PPS payments are per diem rates based on the patient's condition as determined by classification into a specific Resource Utilization Group (RUG). This classification is done by the use of a clinical assessment tool, the Minimum Data Set (MDS) and is required to be performed periodically according to an established schedule for purposes of Medicare payment. Each MDS represents the patient's clinical status based on an assessment reference date and various look back periods for the time that is covered by that MDS. Medicare expects to pay at the rate based on the most recent clinical assessment, i.e., MDS, until the next required assessment is due. This means that the level of payment for each day of the SNF stay may not match exactly the level of services provided. Accordingly, the medical review process for SNF PPS bills must be consistent with the new payment process. The methodology of review for Skilled Nursing Facilities must change under the prospective payment system from a review of individualized services to a review of the beneficiary's clinical condition. Medical review decisions must be based on the observation and look back periods relevant to the MDS(s) for the billing period.
B. Transitioning Schedule--SNFs are transitioning onto the new payment system according to their particular operating fiscal year (FY). Below is a list of the national SNF transition period(s) and projected percentage(s) of SNFs transitioning in each period:
Transition Period National Percentage of SNFs Transitioning
July 1, 1998 through September 30, 1998 18%
October 1, 1998 through December 31, 1998 19%
January 1, 1999 through June 30, 1999 63%
HCFA-Pub.60A
C. Transitioning of SNF PPS Payment to the Federal Per Diem Rate--There is a 3-year transition period. For SNFs that qualify for the transition period, the composition of the blended rates will vary depending on the year of the transition. For the first cost reporting period beginning on or after July 1, 1998, payment will be made based on 75% of the facility specific rate and 25% of the Federal rate. In the next cost reporting period, the rate will be comprised of 50% of the facility specific rate and 50% of the Federal rate. In the following cost reporting period, the rate will be 25% of the facility specific rate and 75% of the Federal rate. For all subsequent cost reporting periods, payment will be based entirely on the Federal rate.D. Medical Review (MR)--All FIs are to review Medicare SNF PPS bills, except for the excluded services identified in §4432(a) of the BBA. The goal is to identify inappropriate billing for SNF services and to ensure that payment is not made for noncovered services. Under PPS, beneficiaries must continue to meet the regular eligibility requirements for a SNF stay as described in MIM §3131 (e.g., 3-day medically necessary hospital stay, transfer to a participating SNF within 30 days after discharge from the hospital, etc.).
In accordance with the IFR, HCFA has established a process for making level of care determinations in which a beneficiary who is accurately assigned to one of the upper 26 of the 44 RUG-III groups is considered to meet the SNF level of care requirement (42 CFR 409.31). That is, the various services ordered for, and the needs of, patients who classify into these groups as a whole add up to an SNF level of care. Accordingly, when reviewing SNF bills with Health Insurance Prospective Payment System (HIPPS) codes that indicate that the beneficiary was properly assigned to one of the upper 26 RUG-III groups, you are to presume that the beneficiary has met the level of care requirement (i.e., ordered by a physician, required daily skilled nursing and/or skilled rehabilitation, and furnished directly by, or under the supervision of a professional). To determine if the beneficiary was properly assigned to one of the upper 26 RUG-III groups, you are to verify that the billed RUG-III group is supported by the associated provider documentation and that the furnished services and intensity (e.g., time) of those services were reasonable and necessary for the beneficiary's condition and payable according to the interim final rule. You are to consider all available information in determining coverage. This includes the MDS, the medical records including physician, nursing, and therapy documentation, and the beneficiary's billing history.
In cases where the provider billed HIPPS codes indicating that the beneficiary was assigned to one of the lower 18 of the 44 RUG-III groups, you are to review the bill and supporting medical information to determine whether the beneficiary did indeed meet the SNF level of care requirement. Accordingly, if the beneficiary met the level of care requirement, you are to also determine whether the furnished services and intensity (e.g., time) of those services, as defined by the billed RUG-III group, were reasonable and necessary for the beneficiary's condition.
1. Types of Review--The primary review strategy for SNF PPS bills will initially be a manual random postpayment process for SNFs that have transitioned onto PPS. FIs are also required to continue review of demand bills and to perform focused medical review on aberrant providers.
a. Random Postpay Review-For those SNFs that have transitioned onto PPS, FIs are to perform a random postpayment review of bills. This review will be a manual process and should be performed only by a health professional (e.g., registered nurse, physical therapist, physician).
FIs are to perform manual random postpayment review of SNF PPS bills with dates of service on or after July 1, 1998. The purpose of the random review is to get a cross-sectional overview of trends in beneficiary care and utilization of services. The information gained will support the FI's data analysis and aid in developing focused medical review criteria that will be unique to their particular provider population.
- Random Review Bill Selection--FIs are not expected to invest in extensive and costly systems changes, new sophisticated sampling processes, or complex techniques to select the sample. While FIs are not precluded from doing so, it is not expected that the sample support
projection to a universe with any statistical confidence. However, you must adhere to the following guidelines.
-- FIs must randomly select for postpayment review the number of bills that they believe to be sufficient to ensure that providers are reporting correct information on the MDS and billing for covered SNF PPS services. The total number of randomly sampled bills must represent at least 80% of the budgeted SNF PPS workload level of 1-3% (see section E). The remaining 20% of the workload can be focused medical review (see b. below).
-- Your selection process must ensure that claims from all transitioned providers are "at risk" of being selected for review.
-- Currently there are 44 RUG codes that drive SNF PPS payment (EXHIBIT I). You are to consider all 44 RUG code categories (i.e., RUC through PA1) in the random review of postpayment bills. Also, all modifier codes (i.e., Minimum Data Set (MDS) clinical assessment time frames) must have an equal likelihood of being selected for review.
-- FIs are to select bills each month for postpayment review based on date of service.
b. Focused Medical Review--In addition to the random review, FIs are to continue focused medial review (FMR) according to MIM §3939. We do not want FMR for aberrant providers to be reduced because of SNF PPS -- though it must be done on a postpayment basis once the provider has transitioned to the PPS.
- FMR Bill Selection--In selecting their overall workload, an FI may choose specific claims or target providers who historically bill at a higher volume, known abusive providers, or newly participating providers. However, this targeted portion of the review must not exceed 20% of the negotiated 1-3% SNF PPS claims workload reviewed by each FI. If an FI determines that it is necessary to perform FMR at a level beyond 20% of their negotiated workload, the FI should contact its Regional Office (RO) to determine what other workload/budget options may be necessary to accommodate these focused medical reviews.
-- It is necessary for the FI to validate that suspected problems exist before reviewing an increased level of a specific provider's claims. Follow the guidelines in MIM §3939 when making this determination.
c. Demand Bills--Continue mandated review of SNF demand bills. Demand bills will be submitted as usual, indicating that the beneficiary requested the noncovered claim be submitted to the fiscal intermediary for consideration. The HIPPS code and revenue code 0022 must be present on the demand bill. If you disagree with the provider's decision of noncoverage, pay at the RUG-III code billed. In the rare instances where the demand bill falls in one of the upper 26 RUG-III groups, follow the medical review instructions to determine that the services were reasonable and necessary and use the RUG-III Adjustment Matrices (EXHIBIT II) to adjust the RUG-III code if necessary. Report workload on the SNF PPS Postpayment MR Report (EXHIBIT V); and savings information on the Report of Benefit Savings (EXHIBIT IV).
2. Bill Review Requirements--FIs must conduct review of SNF PPS bills in accordance with current SNF bill review instructions. This includes all applicable MIM sections, especially MIM §3900, FI standard operating procedure for soliciting additional documentation, time limitations for receipt of the solicited documentation, claim adjudication, and recoupment of overpayment. Supplementary requirements have been added to the review of SNF PPS bills. These additional supplementary requirements are listed below:
a. Revenue Code 0022 must be on the bill. This is a new code, which designates SNF PPS billing.
b. A Health Insurance Prospective Payment System (HIPPS) code must also be on the bill. This is a five digit code. The first three digits are an alpha/numeric code identifying the RUG III classification. The last two digits are numeric indicators of the reason for the MDS assessment.
c. FIs are to use the MDS as part of the medical documentation used to help determine whether the HIPPS codes billed were accurate and appropriate. As a result, when you solicit information necessary to support a medical review decision, include a request for a hard copy version of each MDS related to the billing period being reviewed. Each MDS submitted with the medical record is to be signed.
3. Bill Review Process
a. Request Records--Request a hardcopy version of each MDS related to the billing period being reviewed. You must also request documentation to fully support each MDS, including notes related to the assessment reference date and documentation relating to the look back periods which may fall outside the billing period under review. Since the assessment reference date for each MDS marks the end of the look back period (which may extend back 30 days), the FI must be sure to obtain supporting documentation for up to 30 days prior to the assessment reference date if applicable.
- You are to consider all available information in determining coverage. This includes the MDS, the medical records including physician, nursing, and therapy documentation, and the beneficiary's billing history. We expect that review of the bill (i.e., UB-92) alone would not provide sufficient information in making a coverage determination.
-- If the provider fails to furnish you with solicited documentation (e.g., MDS and medical records including physician, nursing, and therapy documentation), you are to consider the available information when determining coverage. This includes a partially completed or unsigned MDS. In the absence of an MDS, consider the information that is available. If you are unable to make a coverage decision with the available information, deny the bill because the requested information was not provided or was insufficient/incomplete to support medical necessity (§1862(a)(1)(A) of the Social Security Act). A denial based on §1862(a)(1)(A) is subject to appeal rights.
b. Make a Coverage Determination--For all selected claims, review medical documentation and determine whether the services provided were covered. In order to be covered, a service must meet all three of the following criteria:
- Level of care requirement must be met--Determine whether the services met the requirements. Base your review on the following:
-- Beneficiaries assigned to one of the upper 26 RUG-III groups--In accordance with the IFR, a beneficiary who is assigned to one of the upper 26 RUG-III groups is considered to meet the level of care requirement. Accordingly, when reviewing SNF bills with HIPPS codes that indicate that the beneficiary was assigned to one of the upper 26 RUG-III groups, you are to presume that the beneficiary has met the level of care requirements (i.e., ordered by a physician, required daily skilled nursing or rehabilitation, and furnished directly by, or under the supervision of a professional).
-- Beneficiaries assigned to one of the lower 18 RUG-III groups--Review bills and supporting medical information to determine whether the beneficiary did indeed meet the SNF level of care requirement according to the administrative criteria included in the IFR, which eliminated coverage solely on the basis of subcutaneous injections; hypodermoclysis; overall management and evaluation of care plan; observation and assessment of patient's changing condition; and patient education services.
- The services must not be statutorily excluded--Determine whether the services are excluded from coverage under any provision in 1862(a) of the Act other than 1862(a)(1)(A).
- Services are Reasonable and Necessary--Determine whether the services are reasonable and necessary under 1862(a)(1)(A) of the Act. Medical review decisions must be based on the observation and look back periods relevant to the MDS(s) for the billing period. In making a reasonable and necessary determination, you must determine whether the clinical condition and/or services indicated on the MDS are reasonable and necessary for the beneficiary's condition during the observation period only, as reflected by medical record documentation. If you determine that some or all of the services were not reasonable and necessary at the RUG level billed, which if disallowed would result in reclassification to a lower RUG-III category (using the chart in EXHIBIT I--MDS2.0 RUG III Codes), adjust the bill according to the matrices in EXHIBIT II--RUG-III Adjustment Matrices. For examples of case review determinations, see EXHIBIT III--Medical Review Determination Case Examples.
It is important to remember that if the medical record supports that (1) services were delivered as documented on the MDS, and (2) that such services were reasonable and necessary during the relevant assessment period, the billed RUG-III group should be accepted for payment. It is also important to recognize the possibility that the necessity of some services could be questioned and yet not impact the RUG-III classification. The RUG-III classification may not change because there are many clinical conditions and treatment regimens that qualify the beneficiary for the RUG-III group to which he was classified. For instance, a beneficiary who classifies into the Special Care category because he is aphasic, is being tube fed and has a fever, would continue to classify into this category even though the reviewer notices that the documentation of his fever does not support the presence of a fever during the assessment period under review. Although fever with tube feeding is a qualifier for classification into the Special Care category, so is tube feeding with aphasia. The beneficiary is still being tube fed and is still aphasic; that combination of clinical conditions is adequate to qualify him for the Special Care category. None of the qualifying conditions listed on the chart in Exhibit I of this document has a higher weight than any other, and the presence of any one condition or combination of conditions as listed is adequate for classification. If that occurs, no change in RUG-III classification should be made. If the medical record does not support one or both of the above conditions, appropriate adjustment to the RUG-III classification should be made.
We are not currently focusing our MR efforts on whether significant change assessments are taking place in between required assessments. According to the Long Term Care Resident Assessment Instrument (RAI) User's Manual, SNFs should be conducting reassessments when significant changes occur in a beneficiary's condition or treatment. For Medicare beneficiaries in Part A stays, any such change may also affect the billed HIPPS code. We will be working with providers and contractors to develop further guidance for medical reviewers regarding the appropriate use of off-cycle assessments such as the Significant Change in Status Assessment (SCSA), in the coming months. This guidance will include information on Asignal events@ that medical reviewers could look for in determining whether the SNF should have performed an off-cycle (SCSA or Other Medicare Required Assessment) assessment to reflect a change in the beneficiary's clinical condition. Pending such guidance, if the FI questions the necessity of some services taking place between regular assessments, the FI is only to make appropriate payment adjustments for situations involving a beneficiary's discharge from the facility for reasons other than a temporary visit home or if all therapies have been discontinued by the physician
When reviewing bills, if you suspect fraudulent behavior, e.g., a pattern of intentional reporting of inaccurate information for the purpose of payment or the billing for services which were not furnished, it is your responsibility to comply with HCFA's Fraud and Abuse guidelines (MIM §3950).
4. Outcome of Review
a. For all HIPPS codes billed, if you determine that the billed RUG-III group(s) are reasonable and necessary (i.e., covered), accept the claim as billed.
b. For HIPPS codes indicating rehabilitation services, if you determine that the rehabilitation services were appropriate, but not at the level billed, adjust the billed RUG-III code according to Matrix A of RUG-III Adjustment Matrices, EXHIBIT II.
c. If rehabilitation services or the clinical group billed were not appropriate, select the proper category that reflects the skilled services provided to the beneficiary or the beneficiary's clinical condition at the time of the MDS observation period (e.g., Extensive Services, Special Care, Clinically Complex) according to the MDS2.0 RUG III Codes chart (EXHIBIT I). Based on the selected category, adjust the RUG-III code billed according to Matrix B of Rug-III Adjustment Matrices, EXHIBIT II.
d. For all HIPPS codes billed, if you determine that any of the services billed were not furnished, deny the bill in part or full for the entire payment period and, if applicable, apply the fraud and abuse guidelines in MIM §3950.
e. For HIPPS codes billed indicating classification into the lower 18 RUG-III groups, if the beneficiary did not meet the SNF level of care requirement, deny the bill in full for the entire payment period.
f. If you determine that none of the services furnished were reasonable and necessary and there are no clinical diagnoses or conditions that qualify classification into a covered RUG-III category, deny the bill for the entire payment period.
For any full or partial denials made, adjust the claim accordingly to recoup the overpayment. A partial denial because of classification into a new RUG-III code or a full denial because the level of care requirement was not met are considered reasonable and necessary denials and are subject to appeal rights.
E. Workload--All FIs must review SNF PPS bills. This includes performing postpayment random review of SNF PPS bills and continued FMR. SNF PPS workload projections are considered in the annual Budget Performance Requirement process. The target review level is 3% of the total SNF PPS inpatient bill volume, however, intermediaries may reduce the review level based on resources available. The minimum acceptable review level is 1% unless otherwise negotiated with your RO, although it is expected that intermediaries will review as many claims as is possible. FIs are not prohibited from reviewing more SNF PPS bills than projected, however, they must consult their Regional Office before reviewing above the negotiated review level.
F. Data Analysis--The random postpayment review of SNF PPS bills will assist in identifying normal practice patterns, aberrancies, potential areas of overutilization, and patterns of noncovered care. This MR activity should add a strong foundation for focused medical review of claims. FIs should begin evaluating and developing their SNF PPS focused medical review criteria. As indicated in MIM §3939, continue data collection and analysis of SNF PPS billing information, data from other Federal sources (PROs, carriers, Medicaid); and referrals from internal or external sources (e.g., provider audit, fraud and abuse units, beneficiary or other complaints) to ensure targeting and directing MR efforts on bills where there is the greatest risk of inappropriate program payment.
G. MIP-PET-The SNF PPS is a new payment methodology and we believe education is key to ensure proper billing. As problems are identified, FIs should not only educate the individual providers of problems, but also the SNF community about the results of the random review and of common problems found through medical review. This education should be as interactive as possible. FIs should be proactive in using the results of medical review to educate providers and prevent future errors. The costs associated with these work products and activities are to be budgeted and charged to the MIP-PET CAFM2 code 24001.
H. Savings--Savings resulting from the review of SNF PPS bills are to be reported in the Report of Benefit Savings (RBS), according to MIM §Section 2301--SNF PPS. Use the following method to capture savings on the RBS for SNF PPS.
- Screens on the RBS that are affected for capturing savings for SNF PPS and SNF Non-PPS are 1, 2, and 5. (EXHIBIT IV)
- Presently, we capture SNF Non-PPS savings on screens 1 and 2, on lines 5, 7, and 17. For this reason, the definition we currently use will be modified to clarify that the data reported on these line items are for SNF Non-PPS activity, exclusively.
- The conversion factor will be changed in the system to reflect the SNF Non-PPS rate, which is $280.39. This rate was obtained from the Office of the Actuary. This rate will remain in effect until such time that the Office of the Actuary provides conversion factors for FY 2000.
- Screen 5 of the RBS allows the contractor to place the data in manually. For this reason, we have selected line items 4 and 5 to be used for capturing savings, cost, and medical review data for SNF PPS days, and SNF PPS demand days.
- Without changing the titles of the line item categories, the line items on screen 5 of the RBS are redefined to allow for capture of SNF PPS Savings, as well as SNF PPS Demand Days.
- The conversion factor for the SNF-PPS is $233.72. This rate was obtained from the Office of the Actuary and will be updated for FY 2000.
- When calculating the dollar amount of SNF PPS days denied and/or reduced multiply that number by the SNF PPS conversion factor, which is $233.72. For example: If the number of days denied and/or reduced equals 100, then you would multiply that number by $233.72. This would result in a figure of $23,372.
I. Reporting-- FIs are to report each month the information requested in the SNF PPS Postpayment Medical Review Report (EXHIBIT V). This report will be sent to you in an Excel 5.0 file. Continue to utilize the FMR Activity Report for non-SNF PPS medical review activity.
Instructions for Completing SNF PPS POSTPAY MR REPORT:
Total Bills Paid
# of bills - This represents the total # of SNF PPS bills that were paid during the month and should be obtained from your payment system.
# of days - This represents the total # of days that were paid during the month for SNF PPS and should be obtained from your payment system.
$ amount reimbursed - This represents the reimbursement amount paid during the month for SNF PPS and should be obtained through your payment system.
Total Bills Reviewed
# of bills - Report the actual # of SNF-PPS claims that were reviewed during the month.
# of days - Report the total # of days that were billed on SNF PPS claims that were reviewed during the month.
Reimbursement $ amount reviewed - Report the total $ amount reimbursed on the SNF PPS claims that were reviewed during the month. This is the reimbursement amount associated with revenue code 0022.
RESULTS OF RANDOM POSTPAYMENT MEDICAL REVIEW - Report in the columns under this heading the results of your postpay medical review activities for all SNF PPS claims reviewed during the month that were selected Randomly. Do not include in this section any claims that were specifically selected because of a known problem. These claims should be reported in the Focused section of this report.
RESULTS OF FOCUSED POSTPAYMENT MEDICAL REVIEW - Report in the columns under this heading the results of your postpay medical review activities for all SNF PPS claims reviewed during the month where the selection process of the claims focused on a specific problem or a specific provider. Do not include in this section any claims that were randomly selected. These claims should be reported in the Random section of this report.
Below are the definitions of the columns under both the Random and Focused sections of this report. Use these definitions to report, in their respective sections, the results of your random and focused medical review activities for SNF PPS claims.
Bills Paid in Full
# of bills - Report the # of SNF PPS bills that were reviewed during the month that required no adjustments.
# of days - Report the # of days that were billed and paid on SNF PPS claims that were reviewed during the month and required no adjustment.
$ amount reimbursed - Report the amount reimbursed on the SNF PPS bills that were reviewed during the month and required no adjustment.
Bills Denied - Insufficient Documentation
# of bills - Report the # of SNF PPS bills that were reviewed during the month and were denied in full or in part because requested documentation received was insufficient or not submitted.
# of days - Report the # of days billed on SNF PPS bills that were reviewed during the month and denied in full or in part because requested documentation were not submitted.
Reimbursement $ amount denied - Report the reimbursement amount being denied, on SNF PPS claims reviewed and denied in full or in part during the month, because the required MDS assessments were not submitted. This is the reimbursement amount for revenue code 0022 in the FSS or the Arkansas system for the MDS period being denied.
Bills Denied - Not Reasonable and Necessary
# of bills - Report the # of SNF PPS bills that were reviewed during the month and denied in full or in part for any reason other than insufficient documentation (i.e., services were not reasonable and necessary).
# of days denied - Report the # of days that were denied during the month because of a full or partial denial of a SNF PPS bill for any reason other then insufficient documentation (i.e., services were not reasonable and necessary).
Reimbursement $ amount denied - Report the reimbursement amount being denied because SNF PPS bills reviewed during the month were denied in full or in part for any reason other than insufficient documentation (i.e., services were not reasonable and necessary). To compute this amount multiply the # of days denied by the rate for revenue code 0022, as determined by the FSS or Arkansas system, for the days being denied.
Bills Paid At an Adjusted RUG III Code
# of bills - Report the # of SNF PPS bills that were reviewed during the month where either the entire bill or part of the bill was paid at an adjusted RUG III code.
# of days reduced - Report the # of days that are being paid at an adjusted RUG III code because either the entire bill or part of the bill was reduced because inappropriate RUGs were billed.
$ amount saved - Report the amount of savings related to adjusting the RUG III code billed. This savings should be calculated by subtracting the total federal rate for the new RUG category from the total federal rate for the category originally billed (The federal rates for FY 1999 were published in the IFR. Updates to the federal rates will be published in the Federal Register before August 1 of each fiscal year). Multiply this result by the # of days that were reduced (i.e., for FY 1999, if 5 days were reduced from RUC to RMC, the calculation would be $384.21-267.34 = $116.87; $116.87 times 5 days = $584).
Within 30 days after the close of each month, submit one copy of the report to your Regional Office and one copy to Central Office at the address below:
Health Care Financing Administration
Office of Financial Management
Attn: Program Integrity Group
Mail Stop: C3-02-16
7500 Security Boulevard
Baltimore, MD 21244-1850
You may send the report electronically to the Central Office corporate ID at SNFPPSREPORTS@hcfa.gov.
J. Implementation Dates --SNF PPS random review will be performed for bills with dates of service on or after July 1, 1998. It is expected that each FI will begin selecting its random sample and requesting the supporting documentation from the skilled nursing facilities upon receipt of this program memorandum.
We have developed language for you to use to notify SNF providers of pertinent information regarding the medical review process for SNF PPS claims. Please post the attached SNF PPS MR Fact Sheet (EXHIBIT VI) on your website and include similar notification in the next bulletin issued to your providers. Do not post this entire program memorandum on the website.
These instructions should be implemented within your current operating budget.
Contact your Regional Office if you have questions regarding this Program Memorandum.
This Program Memorandum may be discarded December 31, 2000.
EXHIBIT I
MDS2.0 RUG III Codes
|
INDEX |
SPLITS |
RUG III CODES |
| REHABILITATION | |||
| ULTRA HIGH
Rx 720 minutes a week minimum At least 2 disciplines, 1st -5 days, 2nd - at least 3 days |
9-15 4-8 |
NOT USED NOT USED |
RUB RUA |
| VERY HIGH
Rx 500 minutes a week minimum At least 1 discipline - 5 days |
9-15 4-8 |
NOT USED NOT USED |
RVB RVA |
| HIGH
Rx 325 minutes a week minimum 1 discipline 5 days a week |
8-12 4-7 |
NOT USED NOT USED |
RHB RHA |
| MEDIUM
Rx 150 minutes a week minimum 5 days across 1, 2 or 3 disciplines |
8-14 4-7 |
NOT USED NOT USED |
RMB RMA |
| LOW Nrsg. Rehab
6 days in at least 2 activities and
Rehabilitation therapy Rx 3 days/ 45 minutes a week minimum |
4-13 |
NOT USED |
RLA |
| EXTENSIVE SERVICES
- (if ADL <7, beneficiary classifies to Special Care)
IV feeding in the past 7 days (K5a) IV medications in the past 14 days (P1ac) Suctioning in the past 14 days (P1ai) Tracheostomy care in the last 14 days (P1aj) Ventilator/respirator in the last 14 days (P1al) |
7-18 7-18 |
count of other categories code into plus IV Meds + Feed |
SE2 SE1 |
| SPECIAL CARE
-- (if ADL <7 beneficiary classifies to Clinically Complex)
Multiple Sclerosis (I1w) and an ADL score of 10 or higher Quadriplegia (Ilz) and an ADL score of 10 or higher Cerebral Palsy (Ils) and an ADL score of 10 or higher Respiratory therapy (P1bdA must = 7 days) Ulcers, pressure or stasis; 2 or more of any stage (M1a,b,c,d) and treatment (M5a, b,c,d,e,g,h) Ulcers, pressure; any stage 3 or 4 (M2a) and treatment (M5a,b,c,d,e,g,h) Radiation therapy (P1ah) Surgical, Wounds (M4g) and treatment (M5f,g,h) Open Lesions (M4c) and treatment (M5f,g,h) Tube Fed (K5b) and Aphasia (I1r) and feeding accounts for at least 51 percent of daily calories (K6a=3 or4) OR at least 26 percent of daily calories and 501cc daily intake (K6b=2,3,4 or 5) Fever (J1h) with Dehydration (J1c), Pneumonia (Ie2),Vomiting (J1o) or Weight loss (K 3a) Fever (J1h) with Tube Feeding (K5b) and, as above, (K6a=3 or 4) &/or (K6b = 2,3,4,or 5) |
15-16 7-14 |
NOT USED NOT USED |
SSB SSA |
| CLINICALLY
COMPLEX --
Burns (M4b) Coma (B1) and Not awake (N1 = d) and completely ADL dependent (G1aa, G1ba, G1ha, G1ia = 4 or 8) Septicemia (I2g) Pneumonia (I2e) Foot / Wounds (M6b,c) and treatment (M6f) Internal Bleed (J1j) Dialysis (P1ab) Tube Fed (K5b) and feeding accounts for: at least 51% of daily calories (K6a = 3 or 4) OR 26 percent of daily calories and 501cc daily intake (K6b = 2, 3, 4 or 5) Dehydration (J1c) Oxygen therapy (P1ag) Transfusions (P1ak) Hemiplegia (I1v) and an ADL score or 10 or higher Chemotherapy (P1aa) No. Of Days in last 14 there were Physician Visits and order changes: visits >=1 days and order changes >=4 days; or visits >=2 days and order changes on >=2 days Diabetes mellitus (I1a) and injections on 7 days (O3 >= 7) and order changes >=2 days (P8 >= 2) |
17-18 12-16D 12-16 4-11D 4-11 |
Signs of Depression Signs of Depression |
CC1 CB2 CB1 CA2 CA1 |
| IMPAIRED COGNITION
Score on MDS2.0 Cognitive Performance Scale >= 3 |
6-10 4-5 4-5 |
not receiving Nursing Rehabilitation not receiving |
IB1 IA2 IA1 |
| BEHAVIOR ONLY
Coded on MDS 2.0 items: 4+ days a week - wandering, physical or verbal abuse, inappropriate behavior or resists care; or hallucinations, or delusions checked |
6-10 4-5 4-5 |
not receiving Nursing Rehabilitation not receiving |
BB1 BA2 BA1 |
| PHYSICAL FUNCTION
REDUCED
No clinical conditions used |
16-18 11-15 11-15 9-10 9-10 6-8 6-8 4-5 4-5 |
not receiving Nursing Rehabilitation not receiving Nursing Rehabilitation not receiving Nursing Rehabilitation not receiving Nursing Rehabilitation not receiving |
PE1 PD2 PD1 PC2 PC1 PB2 PB1 PA2 PA1 |
|
|
*To qualify as receiving Nursing Rehabilitation, the rehabilitation must be in at least 2 activities, at least 6 days a week. As defined in the Long Term Care RAI User's Manual, Version 2 activities include: Passive or Active ROM, amputation care, splint or brace assistance and care, training in dressing or grooming, eating or swallowing, transfer, bed mobility or walking, communication, scheduled toileting program or bladder retraining
EXHIBIT II
RUG-III ADJUSTMENT MATRICES
Matrix A
RUG Category Billed |
Adjust to: |
| Rehabilitation - RUC, RVC, RHC |
|
| Rehabilitation - RUB, RVB, RHB |
|
| Rehabilitation - RUA, RVA, RHA |
|
| Rehabilitation - RMC |
|
| Rehabilitation -RMB, RMA |
|
Note: The adjusted RUG codes in the above matrix, were determined by selecting the RUG code in the Medium rehabilitation service category that most closely matched the billed ADLs. Services billed in the Medium Rehabilitation category were reduced to Low Rehabilitation category.
MATRIX B
Note: The adjusted RUG codes in the above matrix were determined by selecting the RUG code for each category that most closely matched the ADL index of the billed RUG code. When the ADL index was the same for the entire category the lowest RUG code in that category was selected. In some cases, the adjusted RUG code may fall into a different category than was selected when using the MDS2.0 RUG III Codes chart (EXHIBIT I) because of a low ADL index.
EXHIBIT III
EXAMPLE 1--A Medicare beneficiary classified into the SE1 RUG-III group based on his 5 day Medicare assessment in the SNF. On review of the medical record documentation, the reviewer finds that the beneficiary classified into the SE1 group based on his ADL sum score of 8 and his receipt of IV medications during his acute care hospital stay, 7 days before the MDS assessment reference date. The reviewer further notes, however, that he has received no IV medications during his SNF stay. The bill would not be adjusted. The bill would be paid in full for the entire payment period. Classification into the SE1 group is legitimate and the reviewer is to look no further to make a determination regarding the beneficiary's need for skilled level of care.
EXAMPLE 2--A Medicare beneficiary classified into the SE3 RUG-III group based on his 14 day MDS (ARD on day 12). The facility billed at this rate for 16 days (days 15 through 30). The beneficiary had received IV medication during his acute care stay, was hemiplegic with an ADL sum score of 12, was being tube fed, was aphasic and required surgical wound dressing changes. Although he no longer received IV medication, he met Medicare coverage guidelines based on his MDS and clinical condition. His classification into the SE3 group was appropriate and payment should be made in full.
EXAMPLE 3--A Medicare beneficiary classified into the SSA RUG-III group based on her Medicare 14 day assessment. Her MDS reflects a surgical wound and dressing changes, tube feeding (and receiving 51 percent of daily calories through the tube), aphasia, hemiplegia, and an ADL sum score of 12. However, there is no documentation to support that the requirement for tube feeding was met, nor is there any supporting documentation for the provision of surgical wound dressing changes. In this case, the reviewer should adjust the claim according to Matrix B. The beneficiary has no medical condition that would qualify her for the Special Care category, but she is a hemiplegic with an ADL score greater than 10, so she does qualify for classification into the Clinically Complex category. The bill would be adjusted for payment at the CA1 level for the entire 16 day payment period.
EXAMPLE 4--A Medicare beneficiary was classified into the RUA RUG-III group. On review it was determined that two of the three rehabilitation therapy disciplines provided were not reasonable and necessary for this beneficiary. This determination was based on the fact that there was no documentation to indicate that the beneficiary had any communication or swallowing problems that would support the need for speech and language therapy services. Likewise, there was no documentation supplied indicating any functional deficits that supported the need for occupational therapy services. However, the amount of physical therapy provided was determined to be appropriate. Therefore, using the matrix, the reviewer adjusted the RUG-III code billed to RMA for the entire payment period.
EXAMPLE 5--A Medicare beneficiary was classified into the RUA RUG-III group. The beneficiary's deficits were impaired strength and endurance related to a medical condition, e.g., pneumonia. On medical review the reviewer determines that the beneficiary had no medically reasonable and necessary requirement for rehabilitation therapy services, because his deficits would be expected to spontaneously improve as the beneficiary resumes normal activities. There was no documentation to indicate that there were any medical conditions to support the need for rehabilitation therapy services. In this case, the reviewer would disallow all rehabilitation therapy services and use Matrix B to adjust payment for the entire payment period. The reviewer would reclassify the bill from RUA to the CA1 group based on his pneumonia diagnosis. The bill would be adjusted for the entire payment period.
EXAMPLE 6--An insulin-dependent diabetic Medicare beneficiary was classified into the RHB RUG-III group. The beneficiary had a fever and was dehydrated. On review, there was no documentation to support the need for rehabilitation therapy services and it was determined that no rehabilitation therapy was medically reasonable or necessary. Based on her fever with dehydration and frequent fluctuation in her blood sugar levels, using Matrix B, the medical reviewer adjusted the bill to the SSA level for the entire payment period.
EXAMPLE 7--Based on his 14 day Medicare assessment a beneficiary was classified into the SSB RUG-III group based on his ADL sum score and fever with dehydration. He also was an unstable, insulin-dependent diabetic with four order changes and physician visits in the past two weeks. On review of the medical record, the reviewer found no documentation of treatment for dehydration. Using Matrix B, the bill was adjusted for the entire 16 day payment period to the CB1 level.
EXAMPLE 8--On the 5 day assessment (ARD day 7), the beneficiary was classified into the RLB RUG-III group. He has lost range of motion in his right arm, wrist and hand due to a CVA several years ago. He has moderate to severe loss of cognitive decision-making skills and memory. To avoid further ROM loss and contractures to his right arm, the OT fabricated a right resting handsplint and instructions for its application and removal. The OT saw the beneficiary 3 times each week for splint fabrication, monitoring and teaching nursing staff and family members. The RN developed instructions for providing passive ROM exercises to his right arm, wrist and hand 3 times per day. The CNA s have been instructed on how and when to apply and remove the handsplint and how to do the passive ROM exercises. These plans are documented in the care plan and the beneficiary's progress is documented in the medical record. The classification is appropriate and the bill is paid in full for the entire period.
EXAMPLE
9--A facility submits a demand bill for a beneficiary who classified
into the BA1 RUG-III group. He was verbally abusive, and wanders most of
every day. Nursing rehabilitation services were not being provided. The
beneficiary's family requested that a demand bill be sent by the facility.
The medial reviewer upheld the facility's decision and denied the bill
for the entire payment period.
EXHIBIT IV
Screens 1 and 2 of the Report of Benefit SavingsDefinitions
Screen 5, Line item 4, Other Audits, of the Report of Benefit Savings
Definitions
| Column Heading | Present Definitions for Lines 4 of Screen 5. | Revised Definitions for Line 4 of Screen 5. |
| Number of Bills Reviewed | Definition: Enter the number of bills reviewed. | Definition: Enter the number of bills reviewed under SNF-PPS |
| Number of Providers Audited On-site | Definition: Enter the number of providers audited on-site | Definition: Enter the number of SNF-PPS days reduced and/or denied. |
| Number of Providers Audited In-house. | Definition: Enter the number of providers audited in-house. | Definition: Enter the number of SNF-PPS days previously denied which were overturned upon appeals. |
| Bill Cost On-site | Definition: Enter cost of on-site audits. | Definition: Enter the dollar amount of SNF-PPS days denied and/or reduced. This is the savings. |
| Bill Cost In-house | Definition: Enter cost of in-house audits. | Definition: Enter cost for conducting medical review of the SNF PPS days. |
Screen 5, Line Item 5, Other Audits, of the Report of Benefit Savings
Definitions| Column Heading | Present Definition for Line Item 5 of Screen 5. | Revised Definition for Line Item 5 of Screen 5. |
| Bills Reviewed | Definition: Enter the number of bills reviewed. | Definition: Enter the number of SNF/PPS demand bills reviewed. |
Note: The remaining columns will not be used for line item five.
EXHIBIT IV (cont.)
Category Revisions to theReport of Benefit Savings to Capture Non-PPS Savings
| Current Categories | Revised Category Revisions (* items) |
| 1 -- Hospital PPS | 1 -- Hospital PPS |
| 2 -- Hosp. Non-PPS | 2 -- Hosp. Non-PPS |
| 3 -- Hosp. Outpatient | 3 -- Hosp. Outpatient |
| 4 -- Hosp. Ancillary -- IP | 4 -- Hosp. Ancillary -- IP |
| 5 -- SNF Days | 5 -- SNF Days Non-PPS _ |
| 6 -- SNF Outpat. Chg | 6 -- SNF Outpat. Chg. |
| 7 -- SNF Ancill. Chg | 7 -- SNF Non-PPS Ancill. Chg _ |
| 8 -- ESRD | 8 -- ESRD |
| 9 -- Outpat. PT/Rehab | 9 -- Outpat. PT/Rehab |
| 10 -- CORF | 10-- CORF |
| 11 -- Rural Hlth Ctr. | 11-- Rural Hlth Ctr |
| 12 -- Other Part B | 12 -- Other Part B |
| 13 -- Program Integrity Savings | 13 -- Program Integrity Savings |
| 14 -- Open Biopsy | 14 -- Open Biopsy |
| 15 -- O/P Hosp. Audit | 15 -- O/P Hosp. Audit |
| 16 -- Other Audits | 16 -- Other Audits |
| 17 -- SNF Demand Days | 17 --*SNF Non-PPS Demand Days _ |
| 18 -- HHA S.N. Visit | 18 -- HHA S.N. Visit |
| 19 -- HHA S.T. Visit | 19 -- HHA S.T. Visit |
| 20 -- HHA P.T. Visit | 20 -- HHA P.T. Visit |
| 21 -- HHA Aide Visit | 21 -- HHA Aide Visit |
| 22 -- HHA O.T. Visit | 22 -- HHA O.T. Visit |
| 23 -- HHA M.S.S. Visit | 23 -- HHA M.S.S. Visit |
| 24 -- HHA DME & Supplies | 24 -- HHA DME & Supplies |
| 25 -- OP Home Health | 25 -- OP Home Health |
| 26 -- Hospice | 26 -- Hospice |
| 27 -- CCR S.N. Visit | 27 -- CCR S.N. Visit |
| 28 -- CCR S.T. Visit | 28 -- CCR S.T. Visit |
| 29 -- CCR P.T. Visit | 29 -- P.T. Visit |
| 30 -- CCR Aide Visit | 30 -- CCR Aide Visit |
| 31 -- CCR O.T. Visit | 31 -- CCR O.T. Visit |
| 32 -- CCR M.S.S. Visit | 32 -- CCR M.S.S. Visit |
Present -- Screen 5, Line Items 4 and 5
| Category | Bills Reviewed | No
or Providers Audited
On-site |
No. of Providers Audited In-house | Bill
costs
On-site |
Bill
Costs
In-house |
| 4 -- Other Audits | |||||
| 5 -- Other Audits |
Revised -- Screen 5, Line Items 4 and 5
This table reflects what the columns and line items should represent, as changes were not made to the system.
Category |
Bills Reviewed |
SNF-PPS Days Denied/Reduced |
SNF-PPS Days Over- turned on Appeal |
Amount of SNF-PPS Denied/Reduced |
Cost to Review SNF-PPS Bills |
4 -- SNF-PPS |
|||||
5 -- SNF-PPS Demand Bills |
 |
|
EXHIBIT VI
SNF PPS Medical Review
Fact Sheet
Background
The Balanced Budget Act of 1997 modifies how Medicare payments will be made for skilled nursing facilities (SNF). Effective with cost reporting periods beginning on or after July 1, 1998, Medicare began paying SNFs on the basis of a prospective payment system (PPS). PPS payments are per diem rates based on the patient's condition. The health care provider is required to use a patient assessment tool, the Minimum Data Set (MDS), to classify patients into a resource utilization group (RUG) category. This assessment is required to be done periodically according to a Medicare assessment schedule. Each MDS represents the patient's clinical status based on the assessment reference date and various look back periods for the time that is covered by that MDS.Facts about the medical review process
· Fiscal Intermediaries will be reviewing bills with dates of service on or after July 1, 1998 for providers who have transitioned onto the prospective payment system.· SNF PPS bills will be reviewed on a postpayment basis. We will be reviewing a random sample of SNF PPS bills as well as conducting focused reviews.
· Since the MDS represents the patient's clinical status and is the basis of the RUG-III classification, the MDS is a part of the medical documentation. When you receive a request for additional documentation for a billing period, you are to include a signed hardcopy version of each MDS related to that billing period along with the medical records to support the observation and look back periods related to that MDS. Failure to submit requested documentation within the allowed timeframe may result in a denial of the bill.
· Currently, fiscal intermediaries do not have the capability to electronically reclassify a claim into a different RUG category. Therefore, if the reviewer determines that certain services were either not furnished or were not reasonable and necessary, and when disallowed would indicate classification to a lower RUG category, the federal rate portion of the payment will be reduced to a pre-determined RUG-III classification based on the patient's clinical condition.
· Demand bills should be submitted as usual, indicating that the beneficiary requested the noncovered claim be submitted to the fiscal intermediary for consideration. The HIPPS code and revenue code 0022 must be present on the demand bill.
Please contact your fiscal intermediary if you have questions about the prospective payment system for skilled nursing facilities.