C U R R E N T I S S U E S

Inpatient Rehabilitation Facility Prospective Payment System Began January 1,2002 Anne Deutsch, MS RN CRRN

Note: The following article is a brief overview of the inpatient rehabilitation facility prospective payment system. Re- fer to the Final Rule (Medicare Program; Prospective Payment System for Inpatient Rehabilitation Facilities: Final Rule. Fed- eral Register 2001:66 (152):41316- 41430) for authoritative guidance.

After several changes in the projected implementation date for a prospective payment system (PPS) for inpatient re- habilitation facilities (IRFs), the Centers for Medicare and Medicaid Services (CMS) announced that IRFs would begin implementing the new Medicare PPS on January 1,2002. The Prospective Pay- ment System for Inpatient Rehabilitation Facilities Final Rule, which provides de- tails about the new payment system, was published in the Federal Register on Au- gust 7,2001 (Medicare, 2001). This arti- cle provides an overview of the new data collection tool and how the data collect- ed will be used to determine Medicare payment for rehabilitation facilities.

The new regulations apply to Medicare Part A fee-for-service patients discharged on or after January 1. LRFs needed to be- gin collecting assessment data prior to January 1 to ensure admission data were available for all patients discharged on or after the start date. Reimbursement based on the new PPS (either blended payments or full prospective payments) began with the facility’s cost reporting period begin- ning on or after January 1.

The major components of the new payment system are a data collection tool called the Inpatient Rehabilitation Facil- ity Patient Assessment Instrument (IRF- PAI), which includes a modified version of the FIMTM instrument, and a patient classification system referred to as the case-mix groups (CMGs).

The IRF-PAI, the data collection tool, includes the following sections: Identifi- cation information, admission information, payer information, medical information,

medical needs, function modifiers, the FIM instrument, discharge information, and quality indicators. Collection of data for items in the medical needs and quali- ty indicators sections is voluntary. The FRvl instrument has been modified to in- clude a code of “0” for some FIM items on admission to indicate that an activity has not occurred. The IRF-PAI Training Manual is available on CMS’s Web site, and provides detailed instructions for com- pleting the IRF-PAI, as well as practice case studies. CMS is also expected to post questions and answers to help clinicians record data as accurately as possible.

Within the medical information sec- tion of the IRF-PAI, a patient’s comor- bidities are recorded. Analyses by CMS found that the presence of a comorbidity could have a major effect on the cost of furnishing inpatient rehabilitation care. A payment adjustment may be made if one of the comorbidities listed in Appen- dix C of the Final Rule is present during the patient’s stay. Comorbidities are sep- mted into 3 tiers: tier 1 (high cost), tier 2 (medium cost), and tier 3 (low cost). Co- morbidities that are identified on the day prior to the day of discharge, or the day of discharge, should not be listed on the discharge assessment since these comor- bidities have less effect on the resources consumed during the entire stay. In addi- tion, medical conditions determined to be inherent to a specific impairment are ex- cluded from the list of relevant comor- bidities for that impairment.

Data from the IRF-PAI is used to clas- sify patients into a distinct CMG. There are a total of 100 CMGs. Ninety-five CMGs are referred to as original CMGs, and 5 special CMGs are used for patients who have a length of stay of 3 days or less (not including transfer patients), or pa- tients who expire. IRFs use the grouper software to assign patients into one of the 95 original CMGs, which will be record- ed on the Medicare bill. The 5 special

CMGs are assigned by the pricer software by a fiscal intermediary in special situa- tions. Providers will never key a claim with any of the special CMGs.

Data needed to assign a patient into one of the 95 original CMGs include:

The patient’s admission Impair- ment Group Code (item 21 on the IRF-PAI), which the grouper soft- ware recodes into a Rehabilitation Impairment Category (RIC).

The patient’s admission motor score, which is the sum of admis- sion scores for 12 of the 13 motor FIMTM items. Transfers: Tub or Shower is not included in this calcu- lation. Also, any motor item with a code of “0’ will be recoded to a “1” in the grouper software. The motor score may range from 12 to 84.

The patient’s admission cognitive score, which is the sum of admis- sion scores for the 5 cognitive FIM items. The cognitive score may range from 5 to 35.

The patient’s age. Each original CMGkornorbidity (tier

1, tier 2, tier 3, no comorbidity) combina- tion is assigned a relative weight, which is multiplied by the budget-neutral conver- sion factor to arrive at a Federal prospec- tive payment. Applicable case- and facili- ty-level adjustments are then applied to the Federal prospective payment to determine the reimbursement that the IRF receives for Medicare Part A fee-for-service covered services furnished by the IRF during the Medicare beneficiary’s episode of care.

The facility-level adjustments are those that account for geographic variation in wages (wage index), Disproportionate Share Hospital (DSH) percentages or Low Income Patients (LIP), and location in a rural area. Case-level adjustments include those that apply for interrupted stays, transfer patients (patients whose length

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Inpatient Rehabilitation Facility PPS continued from page 4

of stay [LOS] is less than average LOS for the given CMG and are discharged to an institutional site), short stays, patients who expire, and outlier patients (i.e., pa- tients with unusually high costs).

Rehabilitation nurses working in IRFs should be familiar with IRF PPS re- sources, including:

CMS Web site (Copy of Final Rule; IRF-PA1 Training Manual; Q&A documents ) : www.hcfa.gov/ medicareh rfpps . htm

IRF-PA1 help desk: - Phone (toll-free): 866/2 16-8089 - Fax (toll-free): 866/2 16-8090

CMS software/data transmission help desk:

- Phone (toll free): 8OO/339-93 13 - Fax (toll free): 888/477-787 1

Reference Medicare Program; Prospective Payment Sys-

tem for Inpatient Rehabilitation Facilities; Final Rule. Federal Register 200/;66 ( 152):413 16-41430.

Anne Deutsch is a research associate with Uniform Data System for Medical Rehabili- tation (UDSMR). She also is a graduate stu- dent in the Department of Social and Pre- ventive Medicine at the State University of New York, University at Buffalo. Address correspondence to Anne Deutsch, UDSMR, 232 Parker Hall, 3435 Main Street, Buffalo, NY 14214, or e-mail adeutsch@udsmr.org.

Succeeding in the Complex World of Rehab 2002 ARN 28th Annual Educational Conference

October 1649,2002 Kansas City, MO

Hyatt Crown Center

Featuring sessions on Cultural competence Post-traumatic stress disorder Pain management

Behavioral problems with SCI Pulmonary and diabetes updates And more!

Check upcoming issues of Rehabilitation Nursing for more information

Rehabilitation Nursing Volume 27, Number I JanlFeb 2002 7