CMS makes major revisions to RCS model, introduces new proposed Patient-Driven Payment Model

Apr 30, 2018
The Bottom Line

Many concerns and questions from stakeholders followed the introduction of the Resident Classification System (RCS), a proposed replacement for the Prospective Payment System’s RUG-IV model published in an Advanced Notice of Proposed Rule-Making (ANPRM) last April. Highly anticipated ever since, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule late Friday, announcing significant revisions to the RCS model. The result? The Patient-Driven Payment Model (PDPM).

The proposed rule includes an effective date for the new PDPM of October 1, 2019, a year later than the proposed RCS model was intended to be implemented. It also recommends a 2.4% Medicare pay raise for fiscal 2019. Mark Parkinson, President and CEO at the American Health Care Association (AHCA) says this rate increase is “critical for providers who are struggling to make ends meet and keep their doors open.”

Comments on the proposed rule, which includes changes to the SNF Value-Based Purchasing Program and the SNF Quality Reporting Program, will be accepted until June 26, 2018. A technical report detailing the additional research and analyses conducted in the development of the proposed PDPM, many in response to feedback provided by stakeholders on the ANPRM, can be accessed here. CMS will also hold an open door forum on Tuesday, May 1, 2pm ET, to answer stakeholders’ questions about the revised model and additional proposed rule details.

Concerns regarding the RCS model included doubts that software to support the new system could be developed by the implementation date. Other concerns that seem to be remedied in the PDPM include the ability to change a resident’s case mix group over the duration of his or her stay—a component that was static in RCS—as well as the ability to record the amount of therapy provided to a resident, information that was not accounted for in RCS.

Another significant complaint from commenters on the proposed RCS model was its lack of ties to the IMPACT Act and other major laws. PDPM would incorporate patient assessment information from Section GG rather than Section G, creating a necessary link between points outlined in the requirement.

HCPro will continue to analyze the proposed rule and provide timely guidance for providers. AHCA’s Parkinson says they “appreciate CMS’ effort to listen to input from providers and make revisions. Adequate reimbursement and reasonable regulation must be a priority as skilled nursing prepares for the Gray Tsunami.”

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