News, Skilled Nursing Facility

The essential role of MDS 3.0 in RCS-1

Written by Steven Littlehale, MS, GCNS-BC, executive vice president & chief clinical officer for PointRight. The full article originally appeared in the October issue of PPS Alert for Long-Term Care.

The clinical and technical eligibility requirements for skilled care coverage in a SNF are unchanged under the proposed RCS-1 system—and frankly, those are just about the only things that are unchanged. Changes implemented by the RCS-1 model include:

  • Where once therapy days and minutes served as the primary reimbursement driver, now in RCS-1, therapy may or may not be an intervention listed in the care plan.
  • The PPS MDS assessment schedule is reduced significantly to requiring just a five-day assessment, a significant change assessment if needed, and a discharge assessment. The five-day MDS assessment will determine payment for the entire skilled stay unless a significant change assessment is submitted. It’s essential to note that the OBRA MDS assessment requirements do not change, and that RCS-1 is only impacting Medicare FFS.
  • Some of the initial responses to RCS-1 suggested the role of the MDS would be devalued; however, the MDS will continue to drive the care for your long- and short-stay population under the RCS-1 model, as well as impact five-star quality measures, survey areas of focus, and Medicaid reimbursement in many states. RCS-1 reimbursement is almost exclusively being driven by resident characteristics data from the MDS. Now, more than ever, the MDS is the care, quality, and reimbursement driver for SNFs!

RCS-1 components and process

RCS-1 has four distinct rate components:

  1. PT/OT: covers utilization of physical therapy (PT) and occupational therapy (OT)
  2. SLP: covers utilization of speech-language pathology (SLP) services
  3. Nursing: covers utilization of nursing services and social services
  4. NTA: covers utilization of non-therapy ancillary (NTA) services

Every resident “goes through” each of these components to get to a final RCS-1 rate. The process begins by first identifying why the resident is with you. These “10 reasons for being a resident in a SNF” come from the codes you place in MDS I8000 and correspond to very specific ICD-10 codes. They include the following:

  1. Major joint replacement or spinal surgery
  2. Non-surgical orthopedic/musculoskeletal
  3. Orthopedic surgery (except major joint)
  4. Acute infections
  5. Medical management
  6. Cancer
  7. Pulmonary
  8. Cardiovascular and coagulations
  9. Acute neurologic
  10. Non-orthopedic/musculoskeletal surgery

In addition, other MDS sections, scales, and individual items play a key role in ultimately determining reimbursement, including:

  • Cognitive state
  • Level of dependency in three ADLs
  • The presence of a swallowing disorder
  • Mechanically altered diet
  • CVA
  • Traumatic brain injury
  • Aphasia, apraxia, dysphagia, or slurred speech
  • MDS-identified services and conditions
  • Examining PT and OT

Let’s examine one specific component, PT and OT, to clearly see the role of the MDS and data accuracy on the final RCS-1 rate. The PT/OT per diem rates are dominated by the resident’s reason for a postacute care (PAC) stay, with the “10 reasons” being collapsed into five categories, specifically:

  1. Joint replacement or spinal surgery
  2. Other orthopedic surgery
  3. Non-orthopedic surgery
  4. Acute neurological
  5. Medical management

However, two other factors are critical:

  1. The resident’s cognitive state
  2. The resident’s level of dependency in three ADLs: Eating, transfer, and toileting

The principle for cognition is that moderate to severe cognitive impairment limits the amount of useful PT and OT that can be done, so if that condition is present, the PT/OT per diem goes down. Across the spectrum of reasons for admission and ADL dependency, the average impact of cognitive impairment (urban, unadjusted) is $27.80 per day, or $389 for a 14-day stay. For ADL dependency, the important factor is an ADL point score that is calculated differently for transfer and toileting than it is for eating. For eating, greater dependency means fewer ADL points. For transfer and toileting, the points go from high to low; you get the most points for limited assistance and the least points for not doing the activity at all. Changing coding from supervision to limited assistance (if appropriate) can raise an ADL score by two points. Changing from extensive assistance to limited assistance (again, if appropriate) can raise a score by one point. Such changes can carry a resident from the range of seven to 13 points to the range of 14–18 points. The impact for PT/OT averages $20.03 per day, or about $280 for a 14-day stay.

SLP by a speech-language pathologist is a separate category in RCS-1, which is assessed independently from PT/OT and subject to different rules. Let’s talk briefly about variable day weight adjustment (VDWA). For example, while PT/OT payments decrease steadily after day 14 down to 0.71 of the base per diem rate by day 99 (VDWA), SLP reimbursement is constant through a PAC stay. The per diem rate for SLP depends on five things:

  1. Whether the resident’s clinical category is acute neurologic or not (with acute neurologic paying approximately $25 more per diem)
  2. Whether the resident has a swallowing disorder such as pain on swallowing or choking on food or fluids
  3. Whether the resident has a mechanically altered diet (adding up to $30 to $50 more per diem depending on how CMS interprets the qualifier)
  4. Whether the resident has an SLP-related comorbidity (diagnoses like ALS or functional impairments such as aphasia, apraxia, dysphagia, or slurred speech can raise the per diem rate)
  5. Whether the resident has mild or greater cognitive impairment

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