Ready or Not — Medicare 2006
The final rule to update the Skilled Nursing Facilit y (SNF) Prospective Payment System (PPS) for FY 2006 contains a number of policy changes. Has your facilit y figured out the impact to revenue? Under the new policy, facilities will experience two rate adjustments for FY 2006. The first adjustment took place October 1, 2005.
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Payments for the first quarter of FY 2006 will use the 44 Resource Utilization Groups, version III (RUG–III) case–mix classification system.
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Balanced Budget Refinement Act (BBR A) of 1999 add–on payments will continue for the first quarter.
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Rates include a market basket update increase of 3.1 percent.
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Labor market definitions’ geographical designations used to calculate the wage index will be revised from Metropolitan Statistical Areas (MSAs) to Core-Based Statistical Areas (CBSAs). Some facilities that used to be considered "rural" will now be "urban" and others will go from "urban" to "rural."
- There is a one–year transition policy that provides relief for those SNFs that will get a wage index decrease in FY 2006 and minimizes the rate f luctuations for the majorit y of the SNFs, which will have either an FY 2006 increase or will keep the same wage index.
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The transition will provide for a blend of the FY 2006 MSA–based and CBSA–based wage indices (i.e., 50 percent MSA/50 percent CBSA blended rate); the blended rate will be used for all SNF providers for FY 2006.
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The 128 percent adjustment for SNF residents with AIDS that was enacted in the Medicare Modernization Act (MMA) of 2003 will be continued for FY 2006.
The most significant policy change implements a refinement to the RUG–III case–mix classification system. As of January 1, 2006:
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There will be no more BBR A add–on payments to any of the RUGs.
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The number of RUGs will increase from 44 to 53; nine groups were added to ref lect the higher costs of residents requiring both rehabilitation and high intensity medical services.
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With the implementation of the 53 RUG categories, the nursing case–mix weight for all 53 RUG categories will be increased by 8.51 percent.
The facility needs to be prepared to capture the residents with both rehab and extensive medical care services. Have you determined how many residents using your current MDS process and timing will be classified in the new RUGs?
To appreciate the impact of the 53 RUGs grouper, look at the following daily rates for the current most commonly billed groups and the rates for the new groups.
The nine new groups have rates that appear favorable; however, note the current commonly billed groups and how those rates drop as of January 1, 2006.
The MDS team will need to implement strategies to capture extensive services criteria on both the 5–day and 14–day assessments, while therapy needs to plan for deliver y of services at the same intensit y. Issues for consideration to successfully implement Medicare 2006:
The Plante & Moran Clinical Group can help your facility look at these factors and, with the interdisciplinar y team, determine the most beneficial strategies.
For additional information, contact Jane Belt at 614-849-3020.
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