Profitability Under PPS.

Looking at both sides of the coin

In January 1999, the Federal Government implemented a system that would create both a nationwide geriatric database and the Prospective Payment System (PPS) method of reimbursement for nursing home residents. Our institution--a 34-bed skilled nursing facility located within a 450-bed acute-care metropolitan hospital composed of approximately 40 percent Medicare Part A residents--was then faced with a dilemma: How do we implement a system that would efficiently and accurately record and transmit Minimum Data Set (MDS) information more frequently?

And, more importantly, how do we prudently evaluate the financial impact of these changes and translate that evaluation into adjustments in the clinical setting? The answers lay in creating a mechanism appropriately labeled the Resource Utilization Groupings (RUG) Analysis Group.

Before we could proceed, an evaluation of our infrastructure was necessary. Because the number of MDS forms to be completed would increase, it was necessary to add a full-time MDS coordinator position and secretarial support. The MDS coordinator, a registered nurse, educated herself on the technicalities by networking with other MDS coordinators, attending seminars, reading intensively, and subscribing to appropriate PPS publications.

Once educated, she shared her knowledge with the other members of the interdisciplinary team (IDT). At our facility, the IDT consists of a physical/occupational (PT/OT) therapist, nurse, social worker, dietitian, activity coordinator, speech therapist, and respiratory therapist. Once the IDT was thoroughly educated, the format and timing of the daily meeting was changed to facilitate attendance and designate a portion of the meeting to updating the MDS form. The meeting also allowed for corroboration between disciplines so a realistic assessment of resident progress could be made. Although the ultimate responsibility for completion lies with the MDS coordinator, each team member understands and acknowledges her role in the timely and accurate completion of the MDS.

As each discipline evaluated its section(s) of the MDS, other changes were being made. The PT/OT therapists reviewed a variety of resources to have a thorough understanding of the therapy-appropriate sections of the MDS manual. They reviewed the Centers for Medicare and Medicaid Services (CMS, formerly HCFA) definitions and criteria requirements so that more accurate coding on the MDS could occur. They used the CMS Web site and PT/OT professional organizations' Web sites as well. Staff meetings were held within the department to educate its staff on PPS and RUGs. The social workers evaluated their current method of obtaining a social history to assure that the key elements of mood and behavior, psychosocial well-being, and discharge potential are adequately addressed. All members of the IDT who contribute to MDS completion provided an overview on PPS and RUGs by developing an educational videotape. All new employees coming to the skilled nursing unit view this video.

The other key ingredient to building an infrastructure was computer software. We were in need of a reliable database system that could also interface with the UB92 so that billing could be done effectively. Once a system was selected and we were officially operating under PPS, the IDT was then faced with the challenge of evaluating the financial impact of the changes in reimbursement.

A group gathers together

Hospital administration came up with the idea of a RUG Analysis Group. It was the administrator's belief that our financial survival was dependent upon having a thorough understanding, from a clinical perspective, of what types of residents and diagnoses constituted our core patient group. Comparing that information with the reimbursement rate tinder PPS and the actual cost of providing care allowed for conclusions to be drawn and changes to be made.

One of the first things the group did was review the available financial information from the RUG database system and our hospital finance department. We then designed a RUGs Tracking Form for use in our ongoing analysis. The RUGs Tracking Form is generated by the MDS secretary and lists all residents on the skilled nursing unit for a one-month period. It groups the residents by RUG classification and identifies name, medical record number, admission date, length of stay, discharge date, ICD 9 code, reference date, and total projected revenue and average projected revenue by RUG classification. Also available to the group is the cost report, which identifies by specific patient actual costs during the same time period.

The RUG Analysis Group reviews the RUGs Tracking Report and cost reports on a monthly basis. In addition, the MDS secretary provides trended year-to-date information. Monthly meetings focus on evaluating the monthly report to see which RUG category captured the majority of our residents. Since the IDT members who care for the residents are also on the RUG analysis team, each member is given the opportunity to comment on the rankings and identify any classifications that did not seem to fit with the clinical picture of the resident. Other discrepancies are identified and discussed. Whenever there is no explanation for a discrepancy or a year-to-date trend is unexplainable, a closer examination of the clinical picture and associated documentation is done.

Positive outcomes

RUG analysis afforded numerous possibilities for improvement. For instance, we discovered that in some cases we were providing care but were unable to capture it because our documentation was lacking. This discovery led to the re-evaluation of communications between the disciplines related to the patient's ability to perform activities of daily living (ADLs). From that re-evaluation was born an ADL stamp that contains the categories of bed mobility, transfer, ambulation, dressing, eating, and toileting. Any member of the IDT can assess or document these categories using the stamp. The MDS coordinator uses this information to determine the ADL index that is entered onto the MDS form. Another outcome was the evaluation of residents. The MDS coordinator closely monitors their clinical progress to be sure that dates and times of clinical changes correlate with revisions to the MDS.

Significant changes were made in PT/OT as well. Early in the process the therapists were re-educated about RUGS. (See "Specific educational topics for PT/OT," page 40.) A screening tool that would identify the need for PT/OT evaluations on admission was devised to identify residents with any ADL or mobility deficits. A redirection of PT/OT orders and skilled nursing consults to the therapy gym helped to eliminate missed treatments. Early identification of newly admitted residents allowed evaluation and treatment on the same day resulting in the capture of more therapy minutes. A skilled nursing unit consult screen was designed for potential in-house transfers that listed key information that would allow for pre-screening of potential skilled nursing unit admissions.

Intangible byproducts of the RUG analysis process included greater collaboration between team members regarding coordination of care to facilitate discharge to the most appropriate setting. Staff members also report feeling more empowered to act as patient advocates with the potential to have a positive impact on post-hospital care.

Found money

Since the inception of the RUG Analysis Group, our acute-care length of stay has remained stable in spite of the fact that the acuity of our Medicare residents has increased. Our skilled nursing unit has remained open and a viable option for placement for our Medicare and capitated patient populations. In terms of Medicare reimbursement, we noted an upward shift in RUG categories from 1999 to 2000. The shift represents a more efficient process of capturing RUG information as a result of the group's work. This efficiency translated into an approximately $17,000 increase in revenue. Time spent documenting therapy provided has been minimized. Our most important achievement, however, is the ongoing collaboration of the IDT overseeing the PPS process.

The RUG Analysis Group was developed to evaluate the financial impact of the changes in reimbursement and develop strategies for survival effectively. As we move toward further refinement of RUGs and PPS, the ability to monitor our financial viability through an effective work group is paramount.

The authors wish to acknowledge the contributions of Kelly Killeen, MSW: Jeanine Lewis. LOTR; Lisa Smith, PT; Patricia Borrello-Monie, LCSW/ASCW: cindy Russell, RN, Patient Care coordinator; Alecia Barquet Henderson, MDS office assistant; Nancy Glendening, RNC, MDS coordinator, Joan B. Kateiva, RN, MHA, hospital vice president; Linda Landry, RN, Patient Care coordinator; Patricia Houtin, RN, SNF admissions coordinator; Mary Katherine Malloy, RN, BSN, case manager, in the preparation of this manuscript.

Lisa Colletti, RN, MN, is administrator, and Lynn Hillhouse, RN, MSN, SNF is unit director, both at Alton Ochsner Medical Foundation Hospital Skilled Nursing Facility, New Orleans. Ms. Colletti can be reached at 504-842-3061.

SPECIFIC EDUCATIONAL TOPICS FOR PHYSICAL AND OCCUPATIONAL THERAPISTS

* Counting re-evaluation minutes

* Group minutes and defining therapy time

* Anticipating days and minutes of therapy through Day 15

* Using grace days appropriately

* Using patient performance of all shifts during the observation period to determine true functional status

* Documenting ADL rehabilitation potential and change in ADL function

* Translating PT/OT documentation terminology to MDS language for the Interdisciplinary Team meetings

* When to reassess secondary changes in status

* Appropriate completion of the MDS

* MDS sections that impact validation that PT/OT services were reasonable and necessary