After years of political wrangling, the House of Representatives and the Senate have both passed a long-term fix to the annual Sustainable Growth Rate (SGR) problem. President Obama signed H.R. 2, known as The Medicare Access and CHIP Reauthorization Act of 2015, late last week. The bill replaces the SGR with new systems for establishing payment updates to the physician fee schedules, which also impact Part B therapy payments for nursing facilities. Without the legislation, Part B rates would have decreased by approximately 21% for services on and after April 1, 2015.
The bill provides for a freeze on payment rates from April 1, 2015 through June 30, 2015 and a .5% update for the last six months of 2015. The fee schedules that we provided in January 2015 will continue to be effective through June 30, 2015. We will recalculate the fee schedules for services on and after July 1, 2015 when CMS posts the required information.
The bill also provides for a .5% annual update for services provided in 2016 through 2019. Payment updates subsequent to 2019 will be impacted by various alternative value-based and risk-sharing payment systems. CMS estimates that the bill will increase federal spending by approximately $102 billion over the next 10 years.
Critics of the bill complained that much of the increase was not paid for with cuts in other areas of the Medicare program, resulting in an increase in the federal deficit. In addition, critics, including CMS’s head actuary, see the fix as another short-term fix, albeit over a longer period, pointing to certain provisions that could result in lower payments to physicians after the initial 10 year period.
The bill also extends the therapy caps exception process through December 31, 2017. The caps for 2015 will remain at $1,940. The bill extends the exception process as of April 1, 2015, so there will be no interruption in therapy payments due to the three week delay in passage of the bill.
CMS recently issued its proposed rule for SNF PPS rates effective October 1, 2015 (federal fiscal year 2016). The rule proposes an increase of approximately 1.4% to base SNF rates. The net market basket increase represents an increase of approximately $500 million in SNF payments over fiscal year 2015. Actual rate changes for specific counties will be contingent upon changes in the wage index for each CBSA. In addition, while CMS continues its research into SNF therapy payments, it has not proposed any changes to therapy payments for the upcoming fiscal year.
Fiscal year 2016 will represent the second and final year in CMS’s transition to the new CBSA delineations that were effective October 1, 2014. Rates for counties impacted by the new CBSAs were transitioned in fiscal year 2015 with a 50/50 split between the old CBSAs and the new CBSAs. Rates effective October 1, 2015 will be fully calculated under the new CBSAs. Six Ohio counties (Erie, Hocking, Ottawa, Perry, Preble and Washington) were impacted by the CBSA changes.
The final rule will be released in late July or early August. We will calculate the rates for all Ohio CBSAs and will send out an E-Blast detailing the rate changes at that time.
CMS continues to roll out the changes to the Five Star rating program announced in late 2014. Changes to the quality measure domain, including the addition of two new measures and revisions to the scoring system, were made in February 2015, resulting in lower star ratings for many nursing facilities. Minor changes to the staffing domain were also made at that time.
The staffing domain will change again in 2016 when nursing facilities will be required to begin submitting payroll data to CMS more frequently, rather than once per year during the annual survey. CMS recently announced technical specifications on the new Payroll-Based Journal (PBJ) system developed to meet a requirement in the Patient Protection and Affordable Care Act (PPACA) that long-term care facilities submit payroll information electronically.
CMS has created a website with information regarding the PBJ. The website includes information on the reporting requirements, the new system and technical specifications on how information will be reported. CMS has not yet announced how the data will be verified, how compliance will be enforced or how the data will be shown to the public. We will keep you updated as more information is available.
In January 2015, CMS announced that it would transition from the Individuals Authorized Access to the CMS Computer Services (IACS) system to the Enterprise Identity Management (EIDM) system. Enrollment to the PS&R; system, which is used by providers to obtain the PS&R; reports needed to complete the Medicare cost reports, was previously maintained through the IACS system. In February, CMS discontinued registrations to the IACS system while the transition was made. However, they then announced that the EIDM transition was on hold, though new registrations were still not being accepted.
Due to continued difficulties with the transition, CMS recently announced that registration to the IACS system was being re-enabled. Existing IACS users can continue to use their PS&R; logins to retrieve PS&R; reports for December 31, 2014 Medicare cost reports due on June 1, 2015. Providers that have been unable to register for the system during the transition period can now register through the IACS system. New user registration for the IACS system can be found here (NOTE: as of this writing, certain parts of the registration website were not functioning). If you are in need of assistance during the registration process, you should contact CMS’s External User Services.
The biennium budget for fiscal years 2016-2017 continues to work its way through the Ohio Legislature. The Ohio House of Representatives recently released Substitute House Bill 64, which includes a number of changes from Governor Kasich’s proposed budget. The substitute bill maintains the nursing facility payment formula in statute, lessens the impact of reductions to payments for PA1 and PA2 residents, requires the use of the RUG-IV 48 grouper for rebasing and makes significant revisions to Governor Kasich’s proposed “quality reserve,” including a reduction in the amount withheld from Medicaid rates and revisions to some of the proposed quality measures.
The Medicaid rate system will remain substantially unchanged for Fiscal Year 2016. Rates effective July 1, 2015 will be calculated using the December and March Medicaid case mix scores and will include the $16.44 quality incentive (see article below). Fiscal Year 2017 Medicaid rates, effective July 1, 2016, cannot be accurately estimated at this time, as detail regarding the price rebasing and quality reserves is not yet available.
Provisions impacting ICF/IID providers were revised significantly after an agreement between the provider associations and the Department of Developmental Disabilities. The agreement revises some of the punitive provisions that would have significantly harmed some ICF/IID providers, including restrictions on admissions to some large facilities and flat rates for low acuity residents. In return, the provider associations committed to further downsizing and conversion goals.
The budget bill now moves to the Ohio Senate, where we expect to see additional changes to the nursing facility and ICF/IID provisions. After passing the Senate, a conference committee will reconcile the House and Senate versions. Governor Kasich must sign the bill by June 30, 2015.
The Medicaid quality incentive online survey, which represents over half of the available 20 quality points, is now available to be completed by Ohio nursing facilities. Facilities must complete the survey by May 31, 2015. Medicaid does not accept late submissions under any circumstances. The quality incentive represents up to $16.44 of a nursing facility’s Medicaid rate and failure to earn the minimum of five points could have a drastic impact on a facility’s operations. Each point, one of which must be a clinical point, is worth $3.29, or approximately $65,000 for an average 100-bed facility.
Twelve Ohio nursing facilities did not earn the maximum $16.44 quality incentive for Fiscal Year 2015 Medicaid rates (effective July 1, 2014 through June 30, 2015). Of the twelve facilities, all of them failed to submit the quality incentive survey. We estimate that these providers left approximately $850,000 of Medicaid reimbursement on the table.
Facilities can register for and complete the survey here. Information can be input and saved in the survey tool anytime prior to May 31, 2015. However, facilities must actually submit the survey to Medicaid by May 31, 2015 in order to earn the quality points.
Important note: The Ohio Department of Medicaid (ODM) erroneously stated that facilities that underwent a change of provider (CHOP) in 2014 and 2015 do not have to complete the survey. However, ODM recently clarified that only facilities that underwent a CHOP on or after October 2, 2014 do not have to complete the survey. Those facilities that underwent a CHOP between January 1 and October 1, 2014 do, in fact, have to complete the survey.