After the Medicare prospective payment system (PPS) for Part A took effect, the long-term care industry identified areas where reimbursement failed to cover expenditures. Many claimed to be taking a big hit under the new payment system. Nursing facility owners testified before Congress that reimbursement for medically complex residents dropped from an average of $408 to $231 per day. Residents in this care category typically require 24-hour medical attention, extensive therapy, IV antibiotics, multiple medications, tube feedings, and products and other services. Residents with complex wounds and stage III and IV pressure ulcers may also fall into this category.
In some parts of the country, local facilities have found that they cannot provide these services at the rate paid by Medicare under the resource utilization group (RUG) system. The end result? Beneficiaries are often unable to access skilled nursing facility (SNF) care when needed and must often be placed in facilities outside of the communities where they live. Many SNFs have turned away the sickest Medicare patients who require post-hospital care. In other instances, facilities have dramatically reduced their resource utilization.
This is particularly true for wound treatment and preventive skin care. In some cases, wound care consultants are no longer available for education, care planning and assessment of resident outcomes. Many medical suppliers, including home medical equipment (HME) providers, have also noticed the change in terms of the type and quantity of wound care products ordered by the nursing facilities.
While facilities struggle with providing appropriate care under the fixed-price PPS rate, the Health Care Financing Administration (HCFA) continues to pursue quality of care as a major initiative. HME providers should be aware that some facility administrators are now selecting wound care supplies and skin care products based solely on price while compromising resident outcomes. This practice is certainly penny-wise and pound foolish. HME providers should advise facility administrators that it will cost them more in penalties and citations than they would spend on appropriate treatment modalities and high quality preventive products. One of the best ways to save money in nursing facilities is to prevent malnutrition, alterations in skin integrity, and pressure ulcers – not waiting until these conditions present and then intervening.
Under the old payment system for Medicare Part A SNF care, many wound care items were billed as ancillary medical supplies, or claims were filed separately under Part B. Wound care dressings that promote autolytic debridement and provide an appropriate environment to enhance healing were part of most facilities’ treatment protocol. Physical therapists utilized modalities such as pulsed lavage, electrical stimulation and other devices as indicated for specific types of wounds that many HME providers carry. With the advent of PPS, physical therapists (PT) could no longer bill separately for services. In facilities where PT once took the lead in wound care, it is now the responsibility of nursing. Wound care nurses used to freely develop treatment plans and use a wide variety of topical treatments, but now the choices are severely limited – usually to the cheapest products.
Although the Balanced Budget Act of 1997 (BBA) placed constraints on Medicare payment to SNFs, solutions to the problem will come later this year as new provisions contained in the Medicare, Medicaid, and Schip Balanced Budget Refinement Act of 1999 become effective.
The bill, signed by the president on Nov. 29, 1999, includes more than $11 billion over five years to restore cuts to Medicare made by the 1997 Act. The package provides $500 million in relief to SNFs by increasing Medicare payments for certain complex RUGs. Increases of 20 percent will go to complex diagnoses found to be seriously underpriced in earlier payment schedules. This increase will remain in effect until HCFA recalibrates its payment schedule by next October.
The legislation provides relief funds to be distributed over five years and will increase Medicare reimbursement to SNFs. The following are some of the major provisions:
- there will be a temporary increase in payment for certain high cost patients (including the complex medical care and special care patients where most wound care cases fall)
- the increase is for the federal per diem PPS payments which will be raised 20 percent for 15 categories of Medicare patients in SNFs starting April 1
- this add-on to RUG (PPS per diem) payments will total about $332 million
- there will also be an across-the-board 4 percent increase in payments for all RUG groups during fiscal years 2001 and 2002
- this add-on is anticipated to restore $1.1 billion to SNFs over three years
- SNFs may elect to receive Medicare payments based 100% on the federal per diem rate rather than partially on a federal per diem rate and partially on a pre-PPS facility specific rate (means a higher rate of payment for some facilities)
- SNFs will receive separate payment for certain services like ambulance, chemotherapy, and prostheses (over and above the PPS rate)
- SNFs serving certain patient populations (patients immuno-compromised secondary to an infectious disease) will receive special payments
Although the Medicare SNF population is a small percentage of the millions of Americans residing in nursing facilities, wound care is often focused on this group. For others, chronic wound care is subject to the policies and payment schedule established by the four regional DMERCs under Medicare Part B of which HME providers should educate themselves.
For residents of nursing facilities who are not eligible for the Medicare Part A benefit or who have exhausted their benefits, wound care dressings and physical therapy services are billed under Part B. The BBA placed a $1,500 cap per year on outpatient physical therapy services. This also contributed to significant changes in wound care delivery for nursing home residents. This year’s legislation puts a 2-year moratorium on this cap.
For 2000 and 2001 the caps will not be in effect; however, Medicare will be conducting focused medical reviews of claims for payment of outpatient rehabilitation services provided to residents of SNFs. Physical therapists responsible for wound care services should make certain that they carefully document and meet the specific coverage criteria to avoid denials or overpayment decisions.
Hopefully, the increases in payment rates for Part A and the moratorium on the outpatient therapy cap for those residents eligible for these services under Part B will refocus wound care. HME providers should know that prevention and treatment protocols should focus on outcomes and quality products and not cost. Only then will we achieve the quality of care that every nursing facility resident deserves.