FY 2015 Proposed Rule for IRFs: Closer Scrutiny of Therapy Service Delivery

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Original story posted on: June 18, 2014

The 2015 Proposed Payment Rules for Inpatient Rehabilitation Facilities published May 7, 2014, is open for comments until June 30, 2014. The proposed rules included a number of provisions consistent with what we have seen in the past:

  • An overall update to payments to IRFS by 2.2 percent, or approximately $160 million;
  • A freeze in facility-level adjustment factors to the 2014 levels;
  • Routine updates to the CMG Relative Weights and Average Length of Stay values;
  • Routine updates to the wage index and labor-related share;
  • Updates to the outlier threshold amount;
  • Updates to the cost-to-charge ratio ceilings;
  • Refinements to the Impairment Group Codes and Diagnoses Codes that presumptively meet the 60 Percent Rule; and
  • Revisions to quality measures and reporting requirements.

An additional proposal, one we have been expecting to see in some form for quite some time, is a proposal to add new data items to the IRF-PAI document in order to measure the type of therapy and how much of each type the patient receives during the IRF stay. This article will explore those proposed requirements.

Why Therapy Data Collection?

For a number of years, CMS has discussed the importance of “Individual Therapy” as the standard of care in IRFs and made frequent references to the use of “Group Therapy” as an adjunct to individual therapy services and not as the primary source of those services. With the implementation of the IRF-PPS payment system, some regulators were concerned there would be a financial incentive for organizations to provide therapy services in a group setting as a strategy to reduce the cost of service. CMS admits that while there can be an incentive for IRFs to provide more group treatment and less individualized treatment, they “do not know whether IRFs provided different modes of therapy in response to the new incentives or how much Individual Therapy and Group Therapy IRFs currently provide.” The proposed change will allow CMS to collect data on the amount of therapy being provided individually, in groups, and via co-treatment rather than rely on anecdotal evidence and, hopefully, to make more informed decisions related to the utilization of therapy services within the IRF.

And, while it is commonly accepted that the majority of therapy services provided in an IRF should be one-on-one services, industry experts and CMS are in agreement that there is an important role for group therapy in the IRF. CMS proposes to use the data collected to analyze the types of therapy currently being paid for under IRF prospective payment and to monitor the amount of therapy given and the use of different modes of therapy to support future rulemaking related to IRFs.

Definitions of Type of Therapy

CMS has defined the different types of therapy in the proposed rule:

Individual therapy means the provision of therapy services by one licensed or certified therapist (or licensed assistant, under the appropriate direction of a licensed or certified therapist) to one patient at a time; sometimes referred to as one-on-one therapy.

Group therapy means the provision of therapy services by one licensed or certified therapist (or licensed assistant, under the appropriate direction of a licensed or certified therapist) to between two and six IRF patients at one time, regardless of whether those two to six patients are performing the same activity or different activities.

Co-treatment means the provision of therapy services by more than one licensed or certified therapist (or licensed assistant, under the appropriate direction of a licensed or certified therapist) from different therapy disciplines to one patient at the same time.

Note that CMS has not utilized the terms “concurrent therapy” or “dovetailing” in these definitions and it will require some clarification of how CMS will classify these approaches.

Changes to the IRF-Patient Assessment Instrument (IRF-PAI)

In order to collect this data, the IRF-PAI would be modified to include sections for entering the total minutes of each type of therapy during weeks 1 and 2 and the average minutes of each type of therapy for all remaining weeks. See Therapy Information in Sections O0401A thru O0403C of the proposed updated IRF-PAI.

Based on the data collected over time, CMS plans to address therapy delivery in the IRF. One consideration would be to limit the total treatment time permitted in a group setting to 25 percent of the patient’s total therapy time.

Impact on the Industry

While there has already been a great deal of discussion within the industry about the use of group therapy in the IRF setting, the proposed regulatory changes will bring a closer look at therapy delivery in general within the IRF. 

Administrative Burden

Because Medicare believes that recording the type, amount, frequency, and duration of therapy is already an expectation, CMS has estimated the increased administrative burden for collecting this data from the record as an average of 4 minutes per case and an annual total cost per IRF of only $1,060.

Operational Issues

IRFs will need to address their documentation processes to assure that, if the proposed rule is implemented, therapy services are appropriately classified into individual, group, and co-treatment and that the correct minutes of therapy are captured to each category.   Further, since IRFs currently monitor compliance with the “3-Hour Rule,” the processes should be interconnected to eliminate duplication of effort in managing therapy time.

Best Practices

While providers rarely embrace increasing oversight, the industry has long recognized that the intensive level of therapy services provided in the IRF is a differentiating factor between IRFs and other levels of care. Additional data, prior to the implementation of further regulations related to therapy services in the IRF, can provide valuable information to the IRF in evaluating best practices in the delivery of therapy services.

Comment Period

Comments on the proposed rule must be received no later than June 30, 2014. CMS has specifically requested public comment on all of the therapy proposals, including whether 25 percent is the most appropriate limit to establish for the IRF setting.

About the Author

Angela M. Phillips, PT, is president and chief executive officer of Images & Associates. A graduate of the University of Pennsylvania, School of Allied Health Professions, she has more than 35 years of experience as a consultant, healthcare executive, hospital administrator, educator, and clinician. Ms. Phillips is one of the nation’s leading consultants assisting Inpatient Rehabilitation Facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance.

Contact the Author

angela.phillips@att.net

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Angela Phillips, PT

Angela M. Phillips, PT, is President and Chief Executive Officer of Images & Associates. A graduate of the University of Pennsylvania’s School of Allied Health Professions, she has more than 40 years of experience as a consultant, healthcare executive, hospital administrator, educator, and clinician. Ms. Phillips is one of the nation’s leading consultants assisting Inpatient Rehabilitation Facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance. Ms. Phillips is a member of the RACmonitor editorial board and a popular guest panelist on Monitor Mondays.

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