Center for medicare and medicaid activity therapy

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PCL payment provides an incentive to avoid residents requiring complex or rehabilitative care and to reduce high-intensity care for admitted residents Reschovsky, This study does not include data from these States. PFS payment is a common method of payment for nursing homes. Under PFS, reimbursement is equal to the facility's average costs from a prior year, adjusted for inflation in input prices.

The cost year used to calculate the reimbursement rate the cost rebase year is typically between 1 and 3 years prior, though some States have rebase years up to 12 years prior.

Under PFS, facilities may restrict access to costly treatments, such as rehabilitation, to keep average facility costs below the level used to calculate reimbursement.

To provide incentives for facilities to admit and provide care to more resource-intensive residents, Medicaid Programs introduced patient-based case-mix adjustment to prospective payment. The number of States with PCM payment increased from 14 in to 25 in PCM requires that residents be categorized based on their need for resources primarily direct nursing care and other treatments. A resource-intensity index is associated with each category, representing the relative resources used caring for this type of resident.

Typically, the reimbursement for a category of residents is calculated by multiplying the average reimbursement rate by this index. Under PCM, facilities whose residents have higher care needs receive higher reimbursement.

The effect of PCM on rehabilitation therapy depends on the extent to which rehabilitation costs are accounted for in the case-mix categorization algorithm. The resource utilization groups RUG case-mix measurement system Fries et al. The RUG algorithm specifies reimbursement based on several criteria, including the degree of dependence in eating, toileting transferring, and moving on a bed; and the number of rehabilitation therapy types, the number of days of therapy, and the total weekly minutes of therapy.

RUG-based case-mix adjustment specifically provides additional payments for rehabilitation. Previous studies of Medicaid payment methods found that nursing homes respond to different payment methods by adjusting admission patterns, staffing levels, and care costs Cohen and Dubay, ; Grabowski, ; Norton, ; Reschovsky, However, these studies are limited to facility level analyses or small resident samples.

We employ assessment data from all residents in six States over a 4-year period. We also compare the care provided to Medicaid and private-pay residents.

Private-pay residents are a useful comparison group because access and treatment decisions are individually determined for each resident, based on resident need and market price while for Medicaid residents they are determined by resident need and payment policies for treatment. Wodchis employed a similar strategy to examine the effect of Medicare's prospective payment system PPS payment on rehabilitation therapy. This approach assumes that nursing homes tailor their care to fit the payer type of residents; a hypothesis that we test.

The present research focuses on a particular component of direct care costs, namely physical rehabilitation therapy services. Therapies are high cost treatments, which should be provided differentially according to residents' diagnoses and functional status.

However, little is known about the non-clinical determinants of rehabilitation treatment in nursing homes Berg et al. Rehabilitation is sometimes considered an ancillary service. As such, not all States include rehabilitation services in the calculation of Medicaid reimbursement rates.

To control for these differences, this study only examines residents in States that include ancillary therapy in the Medicaid reimbursement rates. The data represent all nursing home residents between and in Kansas, Missouri not available , New York, Pennsylvania, South Dakota, and Vermont.

The choice of years and States for the current study was determined by the availability of nursing home resident assessments and the inclusion of ancillary therapy in State Medicaid reimbursement rates. Resident level data were obtained from the minimum data set MDS —resident assessment instrument for nursing homes. The MDS was mandated since for use as a resident assessment and care planning tool for all residents in U.

The MDS contains more than items related to resident functioning and treatments. Evaluations of the MDS provide evidence of its validity and reliability for research purposes Hawes et al.

State-level Medicaid payment variables were obtained from a database that includes Medicaid reimbursement rates and payment methods. The latter data have been used to describe the U. Wage indices for metropolitan statistical and non-urban areas were obtained from CMS hospital wage index file and used to adjust for local price levels. Facility characteristics were extracted from the online survey certification and reporting OSCAR file.

Facility information was linked to MDS data assessments based on the Federal identification number. Residents in this study were admitted to nursing homes between January 1, , and December 31, Residents were excluded if they were under age 65 9 percent , if no payment source was specified on the assessment 3 percent , if key data items were missing i.

The admission assessment for each Medicaid or private-pay resident was selected. Residents with Medicare and other payment sources typically receive short-term post-acute rehabilitation care with limited duration of benefits. Thus, with the focus for the present study on Medicaid payment, private-pay residents are a better comparison group. On admission, the primary difference in Medicaid and private-pay residents is ability to pay for one's own care.

The analyses also included variables to control for additional sources of resident heterogeneity. The final sample population of nursing home residents was , The empirical analyses were designed to determine the effect of Medicaid payment methods on the delivery of rehabilitation therapy to Medicaid residents in nursing homes.

Two sets of empirical analyses were conducted. First, differences in rehabilitation therapy for Medicaid residents across payment systems were examined. Second, a differences-in-differences identification strategy was used to control for unobserved variables associated with State variation in rehabilitation use. In the latter analyses, private-pay residents were used as a within-State control group.

Medicaid payment source versus private pay was identified with a dummy variable, as was the payment method used in each State. An interaction between Medicaid payment and the payment method identified differential treatment given to Medicaid residents under each payment method. For each set of analyses, multivariate models were estimated for two dependent variables. First, a logistic regression explained the receipt of any rehabilitation therapy versus none. Second, an ordinary least squares OLS regression estimated the number of minutes of weekly therapy conditional on receipt of some therapy.

Huber-White Greene, robust standard errors were used to ensure that the standard errors were not biased downward due to clustering of residents within facilities and States.

The results of the regression analyses were used to predict the probability of rehabilitation therapy for residents under each payment method.

As previously described, this study examined physical and occupational rehabilitation therapy delivered to each resident. The MDS records the total number of days that the resident received each in the week preceding the assessment. With the exceptions of Missouri and Vermont who used slightly abbreviated versions of the MDS total weekly therapy time in minutes in the week preceding the assessment was also recorded.

Two dependent variables were created. First, a dichotomous variable was created to indicate receipt of either physical or occupational therapy. Second, for those residents receiving therapy, a continuous variable was created as the sum of weekly occupational and physical therapy time.

This sum was log-transformed to correct for skew. Payment source was identified from MDS admission assessments. Medicaid reimbursement rates and payment methods were identified for each State and year of the study. Medicaid payment methods were as shown in Table 1. As some States changed payment method over time, we isolated these time-series effects from the cross-sectional effect arising from differences across States in payment methods.

PFS is prospective facility-specific. PCM is prospective case-mix. NA is not available. Besides payment methods, State payment policies have other minor variations.

All States except South Dakota allowed adjustments to facility payment rates throughout the year. All States except Pennsylvania used ceilings 1. There was some range in the lag in rebase years and State average Medicaid payment rates. All States used a medical-specific, market-level price index to adjust reimbursement rates from the rebase year.

Such State-level characteristics were addressed in multivariate analyses by including State-level fixed effects dummy variables. Annual State average Medicaid reimbursement rates were used to identify the generosity of the Medicaid Programs.

This is not the same as identifying the effect of a reimbursement rate on rehabilitation therapy. Because facility-specific reimbursement levels for rehabilitation therapy are related to facility-specific costs, facility-specific reimbursement would be endogenous to facility rehabilitation costs. Other researchers have used State average Medicaid rates Grabowski, , or two-stage approaches Cohen and Spector, to develop instruments for exogenous reimbursement rates.

Grabowski compared these two approaches and found that the effect of reimbursement on facility staffing was similar for both approaches. Facilities differ in their cost structures and capacities to provide rehabilitation therapy. Hence, measures of facility size, for-profit ownership, hospital-based versus freestanding , and the proportion of Medicaid residents served were included in the analyses.

Market level competition was measured by a transformed Herfindahl Index. With the transformed Herfindahl Index, the most competitive markets have values near one, while the least have values near zero. Consistent with prior research, we used the county as the market area and the number of beds to calculate the market share. The CMS market level wage index was used to measure area wage costs. Additional resident heterogeneity was identified with the RUG-III nursing case-mix index, which is based on resident need for care from nursing and aide staff.

Unlike the overall case-mix index, it does not include adjustments for rehabilitation therapy which would introduce endogeneity. Table 2 summarizes receipt of therapy and therapy time for the study sample of nursing home admissions, grouped by payment method. The average Medicaid State reimbursement rates and rebase lag periods are also shown. As hypothesized, among Medicaid residents, RCB payment was associated with the highest prevalence and highest intensity of rehabilitation therapy, while PFS payment was associated with the lowest prevalence and the lowest intensity of rehabilitation therapy.

The average Medicaid payment rate was also lowest under PFS. Private pay residents were less likely to receive therapy than Medicaid residents except for Medicaid residents paid for by PFS the most restrictive payment. Of those receiving therapy, private pay residents received less therapy time than Medicaid residents under all payment methods.

RCB is retrospective cost-based. Descriptive statistics for the study population are shown in Table 3. The prevalence of characteristics were as expected, with high prevalence of females, older residents, cardiac comorbidity, recent falls, and cognitive and physical impairment.

However, few of these differences were large. Notably, private-pay residents were slightly older than Medicaid residents and were nearly twice as likely to have a discharge planned. Given the observed differences in expected discharge, we further compared the prevalence of an expected discharge according to each Medicaid payment method and found that discharge was planned for 16 percent of Pennsylvania residents RCB , 26 percent of residents in PFS States, and just 10 percent of residents in PCM States.

CPS is cognitive performance scale. ADL is activity of daily living. RUGs are resource utililization groups. CMI is cardiac mycardial infarction. Table 4 contains multivariate results for the Medicaid sample. Medicaid residents in States that used PCM payment throughout the study period also had higher likelihood of receiving therapy and received more therapy time compared with residents in States that used PFS payment, though only the therapy time result was significant.

RCB was also significantly associated with more therapy time. The State average reimbursement rate had no significant association with receipt of therapy. A higher rebase lag time period time since the base-year used in setting rates was associated with lower use of therapy. For-profit facilities provided more therapy to more residents, and the proportion of Medicaid residents in the facility was negatively associated with the likelihood of receiving therapy.

Greater competition was significantly associated with greater use of rehabilitation therapy. For answers to many common questions about the Settlement, see our Frequently Asked Questions.

The revisions, pursuant to the Jimmo vs. Sebelius Settlement, clarify that improvement is not required to obtain Medicare coverage.

Medicare has long recognized that even in situations where no improvement is possible, skilled care may nevertheless be needed for maintenance purposes i.

The manual revisions now being issued will serve to reflect and articulate this basic principle more clearly. The Jimmo settlement was approved on January 24, after a fairness hearing, marking a critical step forward for thousands of beneficiaries nationwide.

See the Order Granting Final Approval. The lawsuit was brought on behalf of a nationwide class of Medicare beneficiaries by six individual beneficiaries and seven national organizations representing people with chronic conditions, to challenge the use of the illegal Improvement Standard.

The proposed Jimmo settlement agreement [2] was originally filed in federal District Court on October 16, The plaintiffs joined with the named defendant, Secretary of Health and Human Services Kathleen Sebelius, in asking the federal judge to approve the settlement of the case.

With only one written comment received, and no class members appearing at the fairness hearing to question the settlement, Chief Judge Christina Reiss granted the motion to approve the Settlement Agreement on the record, while retaining jurisdiction to enforce the agreement in the future, as requested by the parties. CMS must also develop and implement a nationwide education campaign for all who make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve.

It is important to note that the Settlement Agreement standards for Medicare coverage of skilled maintenance services apply now — while CMS works on policy revisions and its education campaign. The Center is hearing from beneficiaries who are still being denied Medicare coverage based on an Improvement Standard, but coverage should be available now for people who need skilled maintenance care and meet any other qualifying Medicare criteria.

This is the law of the land — agreed to by the federal government and approved by the federal judge. We encourage people to appeal should they be denied Medicare for skilled maintenance nursing or therapy because they are not improving. Patients should discuss with their health care providers the Medicare maintenance standard and whether it is applicable to them. Health care providers should apply the maintenance standard and provide medically necessary nursing services or therapy services, or both, to patients who need them to maintain their function, or prevent or slow their decline.

Use this fact sheet now as evidence that skilled maintenance services are coverable for skilled nursing facility care, outpatient therapy, and home health care. The Center for Medicare Advocacy has Self-help Packets to help pursue Medicare coverage, including for skilled maintenance nursing and therapy. You can access a request for re-review form here. CMS discusses and links to the form here. For people needing assistance with appeals, the Center for Medicare Advocacy has self-help materials available, including a Jimmo toolkit for skilled Nursing facility coverage.

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Skilled nursing falls under Original Medicare Part A. Medicare Part A covers up to days of skilled nursing facility care per benefit period. There are no limitations on the number of benefit periods. Before you receive Medicare-covered skilled nursing care, you have to have a new three-day qualifying hospital stay each benefit period.

Medicare Part A Hospital Insurance may cover skilled nursing care on a short-term basis if all of these conditions are met:. A condition that started while you received care in the SNF for a hospital-related medical condition.

Inside tip: Original Medicare is split up into hospital care and medical care. Your out-of-pocket costs will depend on the number of days skilled nursing care is required. If you refuse your daily skilled care or therapy , you could potentially lose your Medicare-eligible skilled nursing coverage. But what about Medicare Part B? Another factor that may affect your out-of-pocket Medicare costs is additional services your health care provider orders.

There may be instances when Medicare does not cover specific care, or the care may not be covered as often as your doctor wants. If this happens, you may have to pay for some or all of the recommended care or services. Medicaid provides health coverage to over 80 million Americans, including eligible low-income adults, seniors, and people with disabilities. Eligible Medicaid recipients have to meet criteria for SNF care in their own state, yet the individual states must also abide by federal law and regulations when setting their skilled nursing care requirements and guidelines.

According to federal requirements, Medicaid-covered skilled nursing service must provide the following: 4 Nursing and related services Specialized rehabilitative services Medically related social services Pharmaceutical services Dietary services individualized to the needs of each resident Room and bed maintenance services Routine personal hygiene items and services Professionally directed program of activities to meet the interests and needs for the wellbeing of each resident Emergency dental services and routine dental services to the extent covered under the state plan From the pros: Our Medicare and Medicaid health insurance guide shares all the essentials of Medicare and Medicaid, their differences, and how to know if you qualify for either or both.

In addition to Medicaid, there may be other ways to get help paying for skilled nursing costs and other costs, including these programs:. Pro Tip: Need clarification on coverage? This state program provides free local health counseling to Medicare recipients.

If you or your loved one are in the hospital and need the services of an SNF, the hospital care team is your first point of contact. Follow the instructions on the last page of the MSN for how to file the appeal.

Receive the Redetermination decision. If the Redetermination decision is unfavorable, request a Reconsideration. Follow the instructions in the decision on how to do this. Receive the Reconsideration decision. Follow the instructions in the Notice of Hearing on how to respond. Receive the hearing file. Be sure it includes all records you have obtained and submitted during your appeal.

If it does not, send the missing records to the ALJ. Attend the hearing and argue your case. Explain in detail to the ALJ why your therapy was erroneously denied by Medicare. Receive the ALJ decision. Physical, speech, and occupational therapy should be covered by Medicare Part B if the therapy meets the following criteria:.

Outpatient Therapy Appeal Details. Typical Scenario: You are a Medicare beneficiary receiving therapy. Medicare Part B is paying for this care because it is provided by a skilled professional a physical, occupational or speech therapist.

Action Steps: Medicare is an insurance program; it only pays for care that has been provided, it does not pay for care that should have been provided. In other words, once your care is discontinued, it will be essentially impossible to remedy the problem with a Medicare appeal. So the first step is to keep the care in place. The best way to keep therapy in place is by understanding the rules about when Medicare should cover therapy and enlisting the assistance of your physician.

There are many reasons why a therapist might discharge you. However, the following two are the most common:. Often these discharges are inappropriate, done too early, and may endanger your long term health or limit your independence.

If you understand the law and advocate for yourself you may be able to keep your medically reasonable and necessary care in place. Therapists work under the orders of physicians.

If the physician ordered three therapy sessions, the therapist will discharge you after three therapy sessions. If you do not think you are ready for the discharge, contact your physician and ask him or her to order more care. Medicare will only pay for therapy if it is medically reasonable and necessary.

Unfortunately, for a long time, many believed that Medicare would only cover therapy if the patient would improve significantly in a short period of time. Because of the devastating effect of the improvement standard on the lives of people living with chronic conditions, the lawsuit Jimmo v. Sebelius was brought on behalf of a nationwide class of Medicare beneficiaries. On January 24, , a settlement agreement was filed. In that settlement, all parties agree, Medicare coverage does not require actual or even the possibility of improvement.

If you cannot access the settlement via the web, please call the Center at and we will send you a copy. Since the Settlement was finalized, the Center for Medicare and Medicaid Services CMS published the following, clarifying that maintenance therapy is covered by Medicare:.

If your therapy is ending because your therapist believes you will not improve or not improve quickly enough, but also thinks that continued care is necessary to maintain your condition or slow determination, give him or her a copy of this settlement. Also encourage the therapist to read the CMS publications listed above. In addition, ask your physician to give your therapist copies of published research or clinical guidelines from professional sources supporting the medical benefit of maintenance therapy for your medical condition.

This information, in combination with the Jimmo settlement, should convince your therapist to continue maintenance therapy and bill Medicare. If the steps above do not succeed, Medicare denies coverage, and you continue therapy, paid by you or another agency, the denial can be appealed through the Medicare Part B appeals process.

The best way to keep Medicare covered outpatient therapy in place is to know your rights and have the support of your physician. You should not lose access to therapy because you will not improve or because you have reached the financial cap. If coverage is denied, with the support of your therapist and your physician, you can win a Medicare appeal.

Additional Information. Medicare is the national health insurance program to which all Social Security recipients who are either at least 65 years old or are permanently disabled are eligible. Medicare was established in by Title 18 of the Social Security Act. Although the Medicare Advantage system is different from the original Medicare program, Medicare Advantage plan benefits are required to be identical to, or more generous than, those in the original program.

There is a long standing myth that Medicare coverage is not available for beneficiaries who have an underlying condition from which they will not improve. As an overarching principle, the Medicare Act states that no payment will be made except for items and services that are "reasonable and necessary for the diagnosis or treatment of an illness or injury, or to improve the functioning of a malformed body member.

While it is not clear what a "malformed body member" is, clearly this language does not limit Medicare coverage only to services, diagnoses or treatments that will improve illness or injury. Yet, in practice, beneficiaries are often denied coverage on the grounds that they are not likely to improve, or are "stable", or "chronic," or require "maintenance services only.

This issue was finally resolved in federal court in Jimmo vs. Sebelius, D. The manuals now make it clear that improvement is not necessary for coverage of physical, occupational, and speech therapy. Physical therapy, occupational therapy, and speech therapy services can be covered by Medicare Part B for people residing in the community, and for those with continuing hospital or nursing home stays that are not otherwise covered by Medicare, if they meet certain criteria.

A physical therapist evaluates components of movement such as strength, range of motion, balance, endurance and mobility. Physical therapists also provide a treatment program to help people move, reduce pain, restore function, and prevent disability.

An occupational therapist helps a person perform activities of daily living by, for example, teaching people how to use adaptive equipment such as devices to help with bathing, dressing, or eating. Speech-Language Pathology services involve the evaluation and treatment of speech and language disorders, which result in communication disabilities and for the diagnosis and treatment of swallowing disorders dysphagia , regardless of the presence of a communication disability.

In addition to being medically reasonable and necessary, outpatient physical, occupational, and speech-language pathology services must meet the following criteria in order for Medicare to cover the services. The question to ask is does the patient meet the qualifying criteria listed above and need skilled therapy — not does the patient have a particular disease or will she or he improve.

The Bipartisan Budget Act of became law on February 9, The Act repealed the Medicare outpatient therapy caps, which functioned as a barrier to care for those receiving outpatient therapy services. Gov or Medicare. Gov webpages to account for the repeal of outpatient therapy caps. Together with the Settlement Agreement in Jimmo v.