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August/September 2003

By Frances J. Fowler, FAAHC

The journey to the Prospective Payment System may have had its ups and downs, but much was learned along the way.

It has been a smooth road for some and a bumpy road for others. But by September 30, 2003, all providers, even those who elected the 2-year transition route, will have completed the journey into 100% Medicare payment through the Prospective Payment System (PPS).

Regardless of the challenges, most providers would agree on three points: 1) PPS, in general, is more equitable than the old payment system. The Centers for Medicare & Medicaid Services (CMS) achieved its goal of tying payments to the functional levels and resource needs of patients rather than basing them on "cost" regardless of patient requirements. 2) Most providers are financially stronger under PPS than under the cost-based system, although some have not achieved the financial results that were initially envisioned. 3) The road to success under PPS has been steep, replete with challenges that were unanticipated.

LESSONS LEARNED

During the transition to PPS-the most significant change to acute rehab since 1983-providers have learned many lessons. Some have been costly, some most aggravating. As new challenges loom on the horizon, success under PPS is more important than ever. Here are some tips from those who have come through unscathed.

1. Be prepared. The old Boy Scout adage certainly holds true for the implementation of PPS. Providers who used the 6 months prior to PPS start-up for system design and integration appear to be faring better financially and clinically than their counterparts who waited until the last minute. Sufficient time is necessary for the new systems to be incorporated into the practice patterns of clinicians at all levels. Based on audit experience, lost revenue for the unprepared reached as much as $1.8 million for a 30-bed rehab unit.

The key systems that have led to success for providers include:

One-person accountability for the quality/effectiveness of the functional measurement system and documentation for PPS
Training and education at all levels of the organization, including reinforcement and retraining at key levels of rehabilitation
Documentation systems that do not overburden the staff and support the ratings on the patient assessment instrument.

2. Centralize accountability. Accuracy of and consistency in rating and documentation are enhanced by having one person accountable for the overall day-to-day functioning of the PPS system. Providers are then able to find and fix problems in a timely manner, educate staff and physicians on the spot and as needed, and ensure that chart documentation is consistent and supports the patient assessment ratings. They are also better able to fill out the patient assessment instrument. Cost-benefit analysis of rehab providers indicates that while the position of the PPS coordinator adds costs, it generates increased revenue that significantly outweighs the additional expense.

3. Keep documentation simple. Nursing's role is critical in meeting the CMS rating instructions rule. Nurses' chart documentation is vital to ensure the most accurate information is available for completing the Patient Assessment Instrument (PAI). Simple documentation is the key to obtaining the right information.

CMS's rule states that the 3-day look back assessment must capture the patient's lowest functional level. As clinicians know, this does not occur in the therapy gym at 9 AM, but rather in the middle of the night when functional and cognitive limits are more apparent. Because the number of nurses staffing the evening and night shifts is lower than during the day, the systems used by nursing need to be simple and create the least amount of additional paperwork. Based on the author's experience, cumbersome systems to document for PPS can create an additional .75 to 1.5 hours of paperwork per day for nurses.

Likewise, teaching nurses to use the Functional Independence Measure (FIM) system is not a viable option if your goal is consistent and accurate rating. For example, in one case, the chart audit for a provider who trained nurses in FIM scoring revealed significant discrepancies between the functional scoring and nurse-written chart document. It also showed a consistent pattern of ratings, suggesting that perhaps nurses, under time pressure, may have gone along with the rating of the prior shift rather than actually rating the patients.

The solution seems to be a combination of the two systems. The first is a simple paper checklist system for the evening or night shift that captures key areas that could impact the functional rating. Staff entering the patient's room record the pertinent information, which is then collected and charted by the nurse at shift change. The second part is an integrated charting system in which members of the clinical team (nursing and each of the therapies) document the patient's condition in the same chart. This allows the staff member responsible for PPS coordination more easily to observe any discrepancies in the documentation that would need to be addressed before the rating form is completed.

4. Build a PPS backup system. The problem with centralized accountability is that the knowledge usually rests with one or two staff members. Should something happen to these staff, your entire system could grind to a halt, creating chaos and financial shortfalls. Therefore, it is critical to have a backup plan that involves more staff. A tight audit system can control problems with inconsistencies among staff that take over certain aspects of PPS activities.

5. Capture comorbidities. Prior to PPS, capturing comorbidities was not a concern because they had no financial impact. Now, however, additional PPS payment is allowed if certain comorbidities are present. For a 30-bed unit with a mix of orthopedic and stroke patients, the additional payment can be in the range of $150,000 to $300,000 annually. Hence, capturing this information has a definite impact on the bottom line. Many providers have found, however, that even after educating physicians, the ability to capture comorbidities continues to be a major problem.

Successful providers have addressed this problem in the following ways:

Streamline the CMS list to a checklist that includes only the most common comorbidities seen in acute rehab patients.
Develop a "reminder" system that includes posting the list on the outside of the patient's chart, in physician dictation areas, and in the nurses' station. Laminate the list for physicians or assessors to use when screening admissions.
Educate and reeducate your physicians.
Increase overall awareness by including discussion and update of comorbidities as part of the team meeting.
Educate the acute care physicians who are the frequent referrers to acute rehabilitation to help resolve some of the documentation problems experienced before patients reach rehab.
Benchmark your organization against other rehab providers relative to the percent of patients with important comorbidities. Available industry data suggest that 25% to 30% of rehab patients have a comorbidity that impacts payment.

It is also important to note that coding of comorbidities is critical in justifying that the admission to acute rehab is medically necessary. Currently, a number of providers nationwide are undergoing audits for medical necessity. Many have found that their systems for capturing this information fall way short of what is needed to satisfy payors.

6. Evaluate how your PPS system is working. Systems depend on structure and processes, not on people. However, the PPS coordinator is a crucial player. If the person responsible for the "nuts and bolts" of making the system work suffers burnout or the information needed for financial and clinical documentation is missed, rehab providers are put at high risk.

Your system is working well if, after PPS has been in place for 6 months or more, you determine:

The amount of time the PPS coordinator spends on PPS-related activities has decreased.
The number and types of problems have decreased.
Staff feels comfortable and the PPS coordinator is easily handling the job.

EMERGING CHALLENGES
Mastering the basics of PPS is critical because new challenges lie ahead. Rehab providers are about to be tested by the government in several different ways. As noted in the 2003 Workplan, rehab is on the radar screen of the Office of Inspector General (OIG). This means closer scrutiny by the intermediaries on all claims submitted and notice to OIG of those providers who consistently cannot document their claims. The current emphasis on medical necessity is one example of how the government is applying pressure on intermediaries.

In addition, rehab providers can expect random on-site audits that will compare and contrast chart documentation to the rating on the Patient Assessment Instrument. Whether this occurs in 2003 or 2004 is still a question, but it would be wise to plan for this event now.

Finally, because rehab providers must submit a significant amount of newly required information, CMS can now more closely observe how rehab providers comply with other CMS acute rehabilitation rules. For example, the proposed rule to enforce the previous rule that 75% of all rehab admissions come from 10 defined medical conditions is a direct result of rehab providing sufficient information for CMS to conclude that this rule was not being enforced.1

Other challenges may lie ahead. Providers should begin to track compliance with the 3-hour therapy guideline, which is one of the factors that differentiate acute rehab from other levels of providers. While reporting this information is not currently required, do not be surprised to see interest in this area, particularly as CMS strives to find another measurable way to differentiate acute rehab from other levels of care.

Reference

42 CFR Part 412, Medicare Program: Inpatient Rehabilitation Facility Prospective Payment System for FY 2004; Proposed Rule. Federal Register. May 16, 2003;68(95):26790-26795.

Frances J. Fowler, FAAHC, is president of Fowler Healthcare Affiliates Inc, a national firm specializing in rehab and other postacute venues. She can be reached at (770)261-6363 or at ffowler@fowler-consulting.com.

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