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CMS finalizes 2019 payment rules for skilled nursing facilities, inpatient rehabilitation and psychiatric facilities

New skilled nursing payment model is slated to save providers an estimated $2 billion over the next ten years, CMS says.

Beth Jones Sanborn, Managing Editor

The Centers for Medicare and Medicaid Services has finalized rules for increasing payment to skilled nursing facilities, inpatient rehab and psychiatric facilities and includes a new patient-driven payment model which will tie reimbursement to patient conditions and care.

CMS said the final rule, issued Tuesday, will put patients over paperwork, ease provider burden, and make significant strides in modernizing Medicare.

The Skilled Nursing Facilities Prospective Payment System final rule reduces unnecessary burden on providers by easing documentation requirements and offering more flexibility. It establishes a new classification system, the patient driven payment model, which ties skilled nursing facility payments to patients' conditions and care needs rather than volume of services. This is done by focusing on clinically relevant factors rather than volume-based service for determining Medicare payment. The model uses ICD-10 diagnosis codes and other patient characteristics as the basis for patient classification. 

The new model is expected to save providers an estimated $2 billion over the next decade and will be effective October 1, 2019 to allow time for education and training of SNFs, CMS said. Based on changes in the final rule, an $820 million increase in Medicare payments to SNFs is expected, thanks to the market update of 2.4 percent required by the Bipartisan Budget Act of 2018. 

The Inpatient Rehabilitation Facility final rule reduces both administrative and documentation burden for IRF providers by well over 300,000 hours, allowing for more time spent on direct patient care, CMS said. In addition to policies that reduce the number of measures IRFs are required to report, CMS finalized revisions to certain IRF coverage criteria including: allowing the post-admission physician evaluation to count as one of the face-to-face physician visits of the three face-to-face physician visits required in the first week of the IRF admission; allowing the rehabilitation physician to lead the interdisciplinary team meeting remotely without any additional documentation requirements; and removal of the admission order documentation requirement in an effort to reduce duplicative documentation requirements.

The changes are effective for all IRF discharges beginning on or after October 1.

"The Inpatient Rehabilitation Facility (IRF) PPS and Inpatient Psychiatric Facility (IPF) PPS final rules finalize policies that ensure the measures those providers must report are patient-centered and outcome-driven rather than process-oriented. Where applicable, these changes will allow providers to work with a smaller set of more meaningful healthcare measures and spend more time on patient care," CMS said.

For inpatient psychiatric facilities, CMS estimates IPF payments to increase thanks to the IPF prospective payment system by 1.10 percent or $50 million in FY 2019. The increase takes into account a 2.9 percent IPF market update l

The IPF quality reporting program will do away with five measures beginning with the FY 2020 payment determination and subsequent years. Three other measures that were slated to be removed -- physical restraint use, seclusion use, and tobacco use treatment at discharge will stay in the program thanks to "overwhelming public comment that emphasized their importance for patient safety and health issues specific to the patient population," CMS said.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

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