The ARD dilemma: how assessment reference dates became even more crucial in the new RUGs environment.

It's been a year since refinements to the Skilled Nursing Facility Prospective Payment System (SNF PPS) went into action. Because the refinements represented a major change that required some important modifications to facility processes, this milestone seems to be a good time for providers to take stock of how things are going.

In 2006, changes to SNF PPS centered around the Resource Utilization Groups (RUG), the payment categories that form the foundation of SNF PPS. Refinements to the RUGs seemed relatively uncomplicated: Without employing any additional data from the Minimum Data Set or creating unfamiliar new groups, the RUG refinements combined two existing groups--rehabilitation and extensive services--to add nine new RUGs known as "rehabilitation plus extensive services."

This change was necessary to more accurately reimburse skilled nursing facilities (SNF) when they provided skilled rehabilitation services and extensive nursing services at the same time. Although the changes seemed simple, providers identified some important challenges to meet to benefit from the RUG refinements.

One year later, many SNFs still are struggling with some of these challenges, which include--crucially--a new understanding of the importance of assessment reference dates (ARD).

Less money for rehab without extensive services

To review: To classify into the rehabilitation plus extensive services category, a resident must receive both

* a level of skilled rehabilitation services that qualifies as a rehabilitation category

* one of the following: IV fluids, IV medications, suctioning, tracheostomy care, or ventilator/respirator care

In addition, the resident's score for dependence with activities of daily living (ADL), as calculated from the MDS, must meet a specified threshold, (i.e., an ADL index of greater than 7).

Many nursing homes have welcomed the additional reimbursement. For another group of SNFs, however, the news was not as good. Because additional funds were not allocated for the new RUG groups, money to pay for them came from the rehabilitation RUG levels--the categories for residents receiving skilled rehabilitation without also receiving extensive nursing services.

The net effect for nursing homes that focused on rehabilitation and did not traditionally admit many residents with extensive services needs has been an overall decrease in reimbursement. Those SNFs must make a decision: Either settle for the reduced reimbursement, or adapt hiring, training, and admission efforts to target the new revenue stream.

Capturing earned reimbursement

Capturing the reimbursement to which the nursing home is entitled has taken on a new dimension with the RUG refinements. SNF PPS has always been set up to identify all RUGs the resident classifies into given a particular ARD and to pay for the category with the highest rate. It is, of course, the case-mix index (CMI)--the relative amount of nursing and therapy staff time involved in providing the services in each category--that determines the rate.

Before the RUG refinements, it was predictable that in most cases the rehabilitation RUGs paid more than nursing RUGs. As a result, the order of payment by rate was fairly predictable. The RUG refinements changed some of that predictability.

The actual payment rate reflects the amount of nursing and rehabilitation time based on time studies conducted by the government. Because an hour of nursing staff time is worth more in dollars than an hour of rehabilitation therapy, when nursing and rehab are combined, the rate depends on the relative amount of each type of service.

Therefore, a rehabilitation plus extensive services category that is heavy on nursing and light on therapy is likely to pay more than one that is heavy on therapy and light on nursing. For example, when a resident classifies into both rehabilitation high plus extensive services and rehabilitation medium plus extensive services, it is the medium RUG that you receive. That's because the rate is higher for that category due to the amount of nursing time relative to therapy time for the medium groups. Still with me?

ARD adjustments

The CMI always has been the basis for the payment, but combining extensive nursing services with therapy means that providers must be aware of all of the categories a resident might fall into to establish an MDS observation period that will capture the services. That means the ARD has taken on more importance than ever.

The ARD is the last day in the observation period for an MDS item and, as such, determines the window in time for collecting information for coding the item on the MDS. The facility MDS team has always had to be keenly aware of the care and services captured in the window, and team members had to adjust the ARD at times, within the limits of the regulation, to capture the intensity of care that best represented the services expected for the resident.

For example, if the resident received skilled rehabilitation, the team would set the ARD to ensure that the number of rehab minutes captured accurately represented the intensity of rehabilitation services to be delivered. On the other hand, if the resident received little or no rehabilitation on admission to the SNF, the team might set the ARD to capture skilled nursing services, such as IV medications, that would classify the resident into a skilled nursing RUG.

With the RUG refinements, the MDS team must be even more focused on setting the ARD appropriately because some combinations of therapy and extensive nursing services will more accurately account for the care and services delivered than other combinations will for a given resident. It is very important that the team try out different what-if scenarios, moving the ARD and resulting assessment windows to different dates to capture the RUG that will pay the reimbursement level to which the facility is entitled.

For example, for a resident receiving both skilled therapy and W medications, moving the ARD in one direction might capture only the rehabilitation services, while moving it by a few days in the other direction might capture only the IV medications. Depending on the level of rehab being provided, the better reimbursement may be for the combination of the two.

Another possibility is that the what-if scenarios might reveal that it makes more sense to forgo the rehab minutes if doing so will result in a better rate with an extensive services RUG alone.

As the one-year anniversary of the RUG refinements approaches, SNF providers should take a look at their systems to be sure they've adapted to the new challenges. Administrative team members should

* check whether PPS team members have a copy of the fisting of RUG categories by CMI on hand when making decisions about setting the ARD

* verify that team members can demonstrate how to perform what-if scenarios to select the ARD that results in the RUG that best represents the intensity of services provided

* facilitate communication with hospitals to ensure that the SNF obtains hospital documents that reflect extensive nursing services captured on the MDS

* ensure that facility staff conduct routine audits to confirm that staff code MDSs accurately, set ARDs appropriately, and meet all regulatory requirements 

Rena R. Shephard, MHA, RN, FACDONA, RAC-C, is the president of RRS Healthcare Consulting Services in San Diego, providing long-term care consulting and training services to facilities, corporations, and attorneys nationwide. Contact her at 858/592-6799.