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New CMS data set shakes out the RUGs

March 11, 2016
by Pamela Tabar, Editor-in-Chief
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Skilled nursing costs aren’t just about length of stay and long-term care. One of the costliest sectors of care for skilled nursing facilities (SNFs) is rehabilitation, especially if the care falls into certain resource utilization groups (RUGs).

The Centers for Medicare & Medicaid Services has just released a new data set that provides information on what services SNFs deliver, how many beneficiaries received it and how much it cost. The Skilled Nursing Facility Utilization and Payment Public Use File (SNF PUF) divides data by RUG, which sorts the level of rehabilitation care into the categories of medium, high, very high and ultra high. Groups are further distinguished by the number of activities of daily living (ADLs) are involved. The higher the RUG, the higher the reimbursement.

The highest Medicare payments went to “ultra-high rehab, ADL 6-10,” which totaled $7.77 billion in 2013 and had the most days billed at 15.8 million days. “Ultra high rehab, ADL 11-16” accounted for an additional 11.7 million billed days, totaling $5.6 billion. 

Closer examination confirms a trend that recovery auditor contractors (RACs) have noticed before: Many of the billings for these levels of therapy are very close to the minimum number of therapy minutes—in other words, just enough to qualify for the higher reimbursement level.

“CMS strives to ensure that patient need, rather than payment system incentives, are driving the provision of therapy services,” says Dr. Shantanu Agrawal, Deputy Administrator for Program Integrity and Director of the Center for Program Integrity, in a CMS announcement about the data.  “These concerns have prompted us to refer this issue to the Recovery Auditor Contractors (RAC) for further investigation, and our hope is that data transparency will facilitate real changes.”  

The data elements also are sortable by region, which could assist investigators and RACs. Therapy and rehabilitation services have been under deep scrutiny by fraud-watch agencies for years, since therapy is fertile ground for upcharging—where providers bill for the level above what was delivered—and even billing for services that never took place.