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Skilled Nursing Facility Medicare PPS Rates Announced for Fiscal Year-End 2011

Abbreviations Key

CMS: Centers for Medicare & Medicaid Services

PPS: prospective payment system

PPACA: Patient Protection and Affordable Care Act

RUG: resource utilization group

SNF: skilled nursing facility

CMS published the SNF Medicare PPS rates, effective October 1, 2010, in the Federal Register. The notice contains the final rates under the RUG-IV system and the “hybrid” RUG-III rates, which are the result of the one-year RUG-IV payment delay required in the PPACA (also known as the health reform act). A 60-day comment period is now open.

“On the positive side, the new rates include an inflationary increase of 1.7 percent, which is estimated to be an annual increase of $542 million for skilled nursing facilities,” says Debbie Elsey, health care principal with LarsonAllen.

Understanding the hybrid rates

The PPACA postponed the RUG-IV payments; however, it did not delay the change in recognizing concurrent therapy and the hospital look-back period to determine the PPS SNF rates. As a result, CMS has issued PPS RUG-III hybrid rates to accommodate the changes, but is not able to actually make payment using these rates. Thus, CMS will use the actual RUG-IV rates for services on or after October 1, 2010, and make retroactive adjustments when they are able to use and process the hybrid RUG-III rates.

Below is a sample comparison of the RUG rates:

 

Current RUG III Rates

RUG IV Rates Published

RUG III Hybrid Rates Published

RMX (medium rehabilitation plus extensive services)

$448.67

$668.30

$552.43

RVB (rehabilitation very high B)

$400.87

$467.86

$462.80

“Keep in mind the transition from RUG-III to RUG-IV is estimated to be budget neutral for CMS, but may not be budget neutral for your organization,” Elsey says.

Submit comments by September 20

The national health care associations are pursuing legislation to reinstate the RUG-IV payment rates effective October 1, 2010, which would eliminate the need for the hybrid rates.

The public comment and question period is open until 5 p.m. on September 20, 2010. You can submit your feedback in one of four ways. All communications should refer to file code CMS–1338–NC.

Electronically

Follow the instructions under the ‘‘More Search Options’’ tab at http://www.regulations.gov.

Standard Mail

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–1338–NC
P.O. Box 8016,
Baltimore, MD 21244–8016

Express or Overnight Mail

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–1338–NC
Mail Stop C4–26–05
7500 Security Boulevard
Baltimore, MD 21244–1850

By Hand or Courier

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Room 445–G, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

(Leave comments in the CMS drop slots located in the main lobby of the building.)

or

Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244–1850

(For this address, call 410-786-7195 in advance to schedule your arrival with one of our staff members.)

How we can help

We can assist you in determining estimated revenue changes and implementation of RUG-IV for your skilled nursing facility. When the new rates are available, we will post them on the senior living page of our website.
Debbie Elsey, Health Care Principal
delsey@larsonallen.com or 612-376-4642

View our health care principals.

Published: 7/27/2010

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