Payment systems for services: documentation through the care continuum

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CHAPTER 10

Payment systems for services: documentation through the care continuum

BARBARA EDMISON, PT and JOHN G. WALLACE, JR., PT, MS, OCS

Importance of documentation

Physical therapists (PTs) and occupational therapists (OTs) are in the business of providing a health care service to improve quality of life. Because of the myriad insurance options available from both private and government-run programs, people rarely pay cash (self-pay) for physical and occupational therapy. Therapists want to be paid a “fair” amount for their skills and knowledge, but they generally rely on a third party to provide this payment. Clinicians must convince the third-party payer, an entity that was not present and did not receive the therapeutic interventions, that the patient received valuable, unique, and worthwhile services. Documentation is one method used to persuade the third-party payers to pay for the professional services provided.

Documentation is a skill a therapist must acquire. Its importance is equivalent to other forms of therapy skills. Documentation creates a lasting impression of the practitioners who represent the profession. Occupational therapy and physical therapy are an imperative and integral part of patient care; the documentation must reflect that. In addition, PTs and OTs are legally responsible for interventions provided by personnel under their supervision. Therapists then depend on other people to interpret their documentation and, on the basis of contracted rates, determine how much should be paid for each service. Third-party payers often submit documentation to peer reviewers to ascertain excessive, useless, or fraudulent treatments.

Securing payment for services rendered is, and will continue to be, a crucial element for the therapist as a professional as well as for the therapist’s livelihood. Documentation, which is a legal and professional responsibility, is the basis for billing and is the proof that treatment was provided. Documentation is critical for success in the payment appeals process. For these reasons, documentation and payment for services are tightly linked together. This chapter will look at the payer sources at the national level and their required documentation components for payment.

It is important to remember that all the federal programs mentioned in this chapter are constantly changing. The process of legislating health care is dynamic and will be significantly modified in the next several years because there are not enough dollars available to cover the projected total costs. The supply of funds is in direct conflict with both the increased numbers of patients and their need for services. Major changes must occur in the future to enable health care, as expected by the public, to survive. One of the keys to these changes lies in documentation. A new national health policy plan for United States citizens was voted on and accepted in the spring of 2010, and new payment schedules or structure may be the outcome; but the need for documentation will remain constant, and documentation will always be a tool used for evaluating and justifying payment for services.

Why document? Documentation provides baseline status, records pertinent information, measures progress and success, fulfills predictions, and declares the final outcomes. It creates a record of the appointments the patient or client had. It provides data for concurrent or retrospective audits as well as evidence for research. It serves as an itemized bill for services rendered. The medical record may also become evidence in legal proceedings, which can either defend or incriminate the clinician. Documentation provides a snapshot of a period of time that gives the reviewer a full and practical description of the status of patients and the impact care has made on their quality of life.

Who reads the medical record? Although many therapists seem to believe that documenting is a necessary evil with no particular purpose, the information that therapists provide is vitally important. Physical and occupational therapy documentation is read by colleagues in the same or related disciplines to affect or continue the plan of care (POC). It is also read by physicians and discharge planners to assist in determining additional treatment or surgical options or placement opportunities. Insurance case managers rely on documentation for the assessment of proper use of services. OT and PT documentation is read by employees of third-party payers who may be screening for proper dates and codes or for predicted outcomes in a reasonable time frame. Therapists do not want to have payment denied for any reason; therefore it is extr emely important that the documentation clearly present all the pertinent information in a manner that is easily understood by all parties.

Definition of terms

There is an entire language of terms regarding payment issues. Please refer to the Quick Reference Guide to Acronyms (Appendix 10-A) for assistance. When therapy services are received, either the person pays the therapist directly or someone else pays the bill. Generally a patient will pay directly for therapy in three circumstances: (1) having a need for skilled services and not having insurance; (2) having had therapy interventions, understanding their value, and wishing to continue beyond what insurance is willing to cover; or (3) having a preference for a specific therapist who accepts only cash payment or who is not a preferred provider of the insurance company. When someone else pays the bill, it is the third-party payer that is billed for the services. Third-party payers are usually insurance carriers who, by contract or written agreement, may determine the maximum amount of money paid and under what circumstances.

Private health insurance is either purchased by a consumer or provided to people as a benefit of employment. People may have additional coverage by paying for it or as a result of being a dependent on someone else’s insurance plan. This secondary insurance may pay for the portion of the bill that is unpaid by the patient’s primary insurance. In the case of Medicare coverage, Medicare beneficiaries can purchase supplemental insurance that will pay some or all of the charges that are not part of their Medicare benefit. As the federal government is taking on a larger role in making sure individuals are insured by setting up a National Health Insurance System, the payer for the therapeutic services may change, but the fact remains that someone or a group of insurance carriers will pay for services rendered.

Health care services, for purposes of payment, are generally divided into three groups: inpatient, outpatient, and home health services. Inpatient services are delivered to patients staying in a hospital or health care facility. Outpatient services are delivered to patients who receive service by going to a health care provider. Home health agencies (HHAs) deliver services to patients in their own homes. Medicare services are processed and paid for by Medicare Administrative Contractors (MACs). MACs are responsible for administrating Medicare programs in 15 jurisdictions comprised of two or more states. MACs are private companies that have been awarded contracts by the Centers for Medicare and Medicaid Services (CMS) for processing all Part A and Part B claims within their geographical jurisdictions. MACs have the ability to accept or deny claims made to them for payment on the basis of their interpretations of the CMS guidelines. Medicare Parts A and B are discussed in more detail later in this chapter.

COBRA (from the Consolidated Omnibus Budget Reconciliation Act of 1985) refers to short-term interim insurance coverage. It allows people whose employment benefits have been terminated to have continuing employer-sponsored group health coverage temporarily. The American Recovery and Reinvestment Act of 2009 (ARRA) has expanded premium assistance to some people who qualify.

Workers’ compensation is coverage for people who have been injured on the job. These regulations are determined at both national and state levels. Workers’ compensation is discussed in greater detail later in this chapter.

Correct billing and claims processing are also dependent on accurately communicating treatment diagnoses and interventions to third-party payers. Three primary coding systems are used to communicate diagnoses and interventions in health care. The International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) is a tabular list of medical diagnoses approved for use by CMS based on the World Health Organization’s ICD-9, originally published in 1977. Current Procedural Terminology (CPT) (a registered trademark of the American Medical Association [AMA]) is a coding system that describes health care interventions. CMS has developed its own coding system to meet the specific requirements of the Medicare and Medicaid programs. The Healthcare Common Procedure Coding System uses CPT and alphanumerical codes developed by CMS in conjunction with the AMA to describe interventions, procedures, and supplies for the Medicare and Medicaid programs.1 Use of these coding systems is discussed in greater detail later in this chapter.

Federal programs

Medicare and medicaid

“Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end-stage renal disease . . . (permanent kidney failure requiring dialysis or a kidney transplant).”2 The Medicaid program provides medical benefits to groups of low-income people, some of whom may have no medical insurance or inadequate medical insurance.3 Although the federal government establishes general guidelines for the program, the Medicaid program requirements are actually established by each state. Whether or not a person is eligible for Medicaid will depend on the state where he or she lives.

“President Truman was the first President to propose a national health insurance plan.”4 Congressional debate about federal health care coverage continued for 20 years. In 1965, HR 6675, the “Mills Bill,” was introduced. “Congressman Wilbur Mills, Chairman of the House Ways and Means Committee, created what was called the ‘three-layer cake’ by starting with President Johnson’s Medicare proposal (Part A), adding to it physician and other outpatient services (Part B), and creating Medicaid which significantly expanded federal support for health care services for poor elderly, disabled, and families with dependent children. Medicare became Title 18 of the Social Security Act and Medicaid became Title 19.”4 Although HR 6675 passed the House without a single amendment, the Senate version required much more discussion and many amendments. Finally, Medicare Part A, which involves basic hospital benefits and other institutional services for the elderly; Medicare Part B, a voluntary program; and Medicaid were approved by both the House and Senate.

Medicare and Medicaid implementation did not begin until 1966. Initially, “Medicare was the responsibility of the Social Security Administration (SSA), the agency that controlled the retirement social insurance program through which most people became eligible for Medicare. Federal assistance to the State Medicaid programs was administered by the Social and Rehabilitation Service (SRS). SRS oversaw welfare programs including Aid to Families with Dependent Children (AFDC), through which many people became eligible for Medicaid. SSA and SRS were agencies in the Department of Health, Education, and Welfare (HEW). In 1977, HEW Secretary Joseph Califano reorganized the department to create the Health Care Financing Administration (HCFA). HCFA was designed to improve administration of both Medicare and Medicaid by moving both health programs together, to improve the staffing of the Medicaid program, and to create a new administrative structure to implement national health insurance. In 1980, HEW was divided into the Department of Education and the Department of Health and Human Services (HHS). In 2001, Secretary Tommy G. Thompson renamed HCFA to become the Centers for Medicare and Medicaid Services (CMS) as part of his initiative to create a new culture of responsiveness in the agency.”4

“Coverage for Medicare Part A is automatic for people age 65 or older (and for certain disabled persons) who have insured status under Social Security or Railroad Retirement. Most people don’t pay a monthly premium for Part A. Coverage for Part A may be purchased by individuals who do not have insured status through the payment of monthly Part A premiums. Coverage for Part B also requires payment of monthly premiums. People with Medicare who have limited income and resources may get help paying for their out-of-pocket medical expenses from their state Medicaid program. There are various benefits available to ‘dual eligibles’ who are entitled to Medicare and are eligible for some type of Medicaid benefit. These benefits are sometimes also called Medicare Savings Programs (MSPs). For people who are eligible for full Medicaid coverage, the Medicaid program supplements Medicare coverage by providing services and supplies that are available under their state’s Medicaid program. Services that are covered by both programs will be paid first by Medicare and the difference by Medicaid, up to the state’s payment limit. Medicaid also covers additional services (e.g., nursing facility care beyond the 100-day limit covered by Medicare, prescription drugs, eyeglasses, and hearing aids). Limited Medicaid benefits are also available to pay out-of-pocket Medicare cost-sharing expenses for certain other Medicare beneficiaries. The Medicaid program will assume their Medicare payment liability if they qualify.”5

The Balanced Budget Act of 1997 (BBA) made the most significant changes to the Medicare and Medicaid programs since their implementation. One goal was to shift some of the financial stress to the private sector, which was accomplished by allowing Medicare beneficiaries options for additional types of health plans. The BBA also reduced hospital payments, which had considerable consequences in the health care industry. This was one reason that the Balanced Budget Refinement Act of 1999 (BBRA) was introduced. The BBA was also designed to address fraud, abuse, and waste in the federal health care programs.

The BBA also created the Children’s Health Insurance Program (CHIP), also known as Title XXI of the Social Security Act. “CMS administers this program, which helped states expand health care coverage to over 5 million of the nation’s uninsured children. The program was reauthorized on February 4, 2009, when President Obama signed into law the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA or Public Law 111-3). CHIPRA finances CHIP through fiscal year 2013. It will preserve coverage for the millions of children who rely on CHIP today and provides the resources for states to reach millions of additional uninsured children. CHIP is jointly financed by the federal and state governments and is administered by the states. Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures. CHIP provides a capped amount of funds to states on a matching basis. Federal payments under CHIP to states are based on state expenditures under approved plans effective on or after October 1, 1997.”6

At least two other federal laws affect children who may not have sufficient health care coverage. The Elementary and Secondary Education Act of 1965 (ESEA), reauthorized as the No Child Left Behind Act of 2001 (NCLB), is standards-based education reform that is directed at disadvantaged students. IDEA, the Individuals with Disabilities Education Act, provides for early intervention, special education, and related services to children with disabilities.7

Health insurance portability and accountability act of 1996

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a legislative effort to improve insurance coverage of the work force and also to improve the continuum of care by switching health care records away from paper and into the computer age.

Title I of HIPAA refers to health insurance reform. This reform increases the opportunities for workers to maintain or acquire insurance coverage when they lose or change jobs.

Title II of HIPAA relates to administrative simplification. These provisions are more closely associated with documentation and payment for services. The purpose of administrative simplification is to create a national database for medical records to ease communication among health care agencies. However, this led to concerns about privacy and security of vital information as a result of easily accessible online medical records. This prompted HHS to also include a privacy rule and a security rule. “The Standards for Privacy of Individually Identifiable Health Information (‘Privacy Rule’) establishes, for the first time, a set of national standards for the protection of certain health information. HHS issued the Privacy Rule to implement the requirement of HIPAA. The Privacy Rule standards address the use and disclosure of individuals’ health information—called protected health information (PHI) by organizations subject to the Privacy Rule, called covered entities—as well as standards for individuals’ privacy rights to understand and control how their health information is used. Within HHS, the Office for Civil Rights (OCR) has responsibility for implementing and enforcing the Privacy Rule with respect to voluntary compliance activities and civil money penalties.

“A major goal of the Privacy Rule is to [ensure] that individuals’ health information is properly protected while allowing the flow of health information needed to provide and promote high-quality health care and to protect the public’s health and well-being. The Rule strikes a balance that permits important uses of information, while protecting the privacy of people who seek care and healing. Given that the health care marketplace is diverse, the Rule is designed to be flexible and comprehensive to cover the variety of uses and disclosures that need to be addressed.”8

“While the Privacy Rule mandates policies and procedures to protect patient information in all forms, the purpose of the Security Rule is to adopt national standards to protect the confidentiality, integrity, and availability of electronic protected health information. This Rule is directed at the covered entities, which are health care providers, health care clearinghouses, and/or health plans, that transmit or maintain protected health information electronically [and] are required to implement reasonable and appropriate administrative, physical, and technical safeguards. The Security standards require that steps be taken to protect this information from reasonably anticipated threats or hazards. Built into the Security Rule, however, is some flexibility that allows covered entities to determine what is reasonable and appropriate based on their size, cost considerations, and their existing technical infrastructure. This built-in flexibility also makes allowances for the rapid changes in technology.”9

“On July 27, 2009, Secretary of the Department of Health and Human Services Kathleen Sebelius delegated authority for the administration and enforcement of the Security Standards for the Protection of Electronic Protected Health Information (Security Rule) to [OCR].” This action will improve HHS’s ability to protect individuals’ health information by combining the authority for administration and enforcement of the federal standards for health information privacy and security called for in HIPAA. The HIPAA Privacy Rule is also administered and enforced by OCR.

“Congress mandated improved enforcement of the Privacy Rule and Security Rule in the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act of 2009. Privacy and Security are naturally intertwined, because they both address protected health information. Combining the enforcement authority in one agency within HHS will facilitate improvements by eliminating duplication and increasing the efficiency of investigations and resolutions of failures to comply with both rules. Moreover, combining the administration of the Security Rule and the Privacy Rule is consistent with the health care industry’s increasing adoption of electronic health records and the electronic transmission of health information.”10

The federal government is helping businesses to achieve the HIPAA-mandated goals of improved and efficient health care while protecting the privacy of the recipients and the security of their information. The well-being of a person is reflected not only in her or his treatment but also by the integrity of the system to keep personal information confidential. HIPAA and its consequences directly relate to documentation standards and handling of PHI.

Prospective payment systems

Years ago, people received therapy in hospitals, Medicare was billed, and the hospital was paid. Physical and occupational therapy departments were among the highest moneymakers in the hospital. This, unfortunately, led to excessive billing and resulted in the need for improved accounting. More recently, CMS has established stricter requirements in an effort to control spending and to have money available for future generations. These requirements also benefit patients today by accelerating the establishment of a medical diagnosis, allowing for faster implementation of therapeutic interventions and preventing billing or payment for unskilled services. Currently, under the prospective payment system (PPS), hospitals are paid a set amount per patient. The amount depends on the medical diagnosis and related morbidities. Payments are no longer related to the length of stay or procedures ordered. It is the hospital’s responsibility to maximize its income by minimizing the patient’s stay.

The Social Security Amendments of 1983 were responsible for the plan to save taxpayers money by creating incentives to improve efficiency in acute-care hospitals. This system applied to Part A Medicare beneficiaries and was designed to give the hospitals a lump sum for patients who fit into certain categories.

“Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute-care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. This payment system is referred to as the inpatient prospective payment system (IPPS). Under the IPPS, each case is categorized into a diagnosis-related group (DRG). Each DRG has a payment weight assigned to it, based on the average resources used to treat Medicare patients in that DRG.”11

Use of the IPPS and DRGs, in which Medicare payments are established in advance and determined by the medical diagnosis at discharge, created the opportunity to transform hospitals into more efficient and cost-effective organizations. It also became essential to accurately determine the discharge diagnosis of patients in the hospital. Appropriate “coding” of patients developed in the Health Information Management Departments of hospitals to determine the correct DRG and corresponding payment.

Although the DRG is associated with an average hospital cost per diagnosis and is calculated on a per-case-at-discharge basis, the actual payment is affected by many factors. There are two different paths that contribute to the final payment: the operating, or labor, expenses, and the capital, or nonlabor, expenses. On the operating expenses side, the wage index incorporates local labor costs. Cost of living adjustments are made on the capital side. Also taken into account is the geographical area (rural versus urban) where the hospital is located. To adjust for case mix, each DRG is weighted relative to its complexity against the other individual DRGs. There are several other possible factors contributing to the DRG payments. The indirect medical education adjustment is allocated when the hospital is an approved teaching hospital for graduate medical education. The new technology adjustment is granted if the hospital is using expensive new technology that significantly improves clinical outcomes. The disproportionate share of the hospital adjustment is provided to hospitals that treat a higher percentage of low-income patients. An outlier is an exceptionally expensive course of treatment that qualifies for additional funding. DRG payments may be reduced if the patient’s length of stay is shortened by a transfer to another acute-care hospital or post–acute-care setting. Fiscal year 2009 completed the transition to MS-DRGs, which are based on secondary diagnosis codes and provide more specific information for resource allocation. Medicare Severity (MS) divides cases into three levels. MCC, major complications with comorbidities, is the most severe. CC refers to complications with comorbidities, and Non-CC, or no complications with comorbidities present, is the least likely to require additional hospital resources.

With the success of the IPPS in acute-care hospitals, additional legislation mandated extension into other settings with Medicare Part A beneficiaries. The BBA, the BBRA, and the Benefits Improvement Act of 2000 (BIPA) moved the PPS into skilled nursing and inpatient rehabilitation facilities (IRFs), HHAs, hospice, hospital outpatient, inpatient psychiatric facilities, and long-term care hospitals (LTCHs). Payments for each are based on different classification systems, although therapy services remain included in the lump sum. The basic payment in each facility may also be adjusted by the factors listed in the previous paragraph.

The initial PPS has encouraged the use of modified versions of this payment system by nongovernment third-party payers. Today, most inpatient services are covered by prospectively paid contracts with hospitals and health care facilities. Services not covered by prospective payment arrangements are often covered by per diem contract arrangements that pay a flat rate per day for inpatient services.

Outcome measures

CMS has developed different methods of determining payment in the PPS for the various settings. In almost every case, the initial status of the patient determines the amount of money the facility will receive. Generally, the more complicated the patient’s condition, the higher the reimbursement rate. The facility must then have a system to create a preliminary comprehensive “snapshot” of patients within days of their arrival at that particular setting. To ensure that patients receive the same standard of care and are treated equally, all patients are assessed by use of the Medicare preferred tools, even if they do not have Medicare coverage.

In the inpatient acute rehabilitation facility, the preferred tool is the Inpatient Rehabilitation Facility–Patient Assessment Instrument (IRF-PAI) to assist in determining the payment amount. The Resident Assessment Instrument (RAI) is the primary tool in subacute and skilled nursing facilities, and OASIS (Outcome and Assessment Information Set) is used in HHAs. These tools are discussed in more detail later in this chapter.

With each of these outcome measurement tools and in each setting, therapy documentation in the medical record must validate the tool’s ratings. Each tool is completed when the patient is admitted to the program and also at the time of discharge. As the patient progresses, it is very important for therapy documentation to reflect improvement and goal achievement. Because of the relative insensitivity and ordinal scales of these comprehensive instruments, a significant amount of functional change is often required to document improvement from one level to the next.

It is expected that third-party payers will begin to use the outcome measurement tools as a way of assessing the performance of different facilities. With this information available for comparison, physicians and payers may choose to admit patients to those facilities that provide the best outcomes in the fewest number of days.

The IRF-PAI, RAI, and OASIS were developed with essentially the same goals in mind: (1) to measure patient outcomes and (2) to improve quality of care. These tools are each used in conjunction with the Medicare PPS to determine payments. However, the functional tools themselves are not related and therefore there is no one system available in the United States to provide “standardized, patient-centered outcome data that can provide policy officials and managers with outcome data across different diagnostic categories, over time, and across different settings where post-acute services are provided (p. 13).”12 For the future, it is hoped that “functional outcome data that [are] applicable to patients treated across different clinical settings and applications, more efficient and less costly to administer, and sufficiently precise to detect clinically meaningful changes in functional outcomes (p. 23)”12 will be developed.

Recent legislation instructed CMS to investigate this problem. By 2010, CMS had begun addressing the need for a standardized assessment tool that would be applied from the acute-care hospital to four possible post–acute-care settings (IRFs, skilled nursing facilities [SNFs], HHAs, and LTCHs). Named the Continuity Assessment Record and Evaluation, or CARE, tool, it was being used only in Demonstration Projects at the time of this writing. Similar to the other instruments discussed (IRF-PAI, Minimum Data Set 2.0 [MDS], and OASIS), the CARE tool is initiated at admission and completed at discharge. It incorporates demographics, medical status, cognitive status, and functional abilities. With the electronic medical record, a standardized assessment tool across the continuum of care, and Web-based technology, CMS will then be able to determine and compare specific case-mix outcomes and costs relative to the particular discharge status and setting. This will ultimately be able to guide payment policy.

Inpatient rehabilitation facility–patient assessment instrument

In an IRF, the IRF-PAI is required by CMS as part of its PPS. On admission to the IRF, the patient is assigned an Impairment Group Code (IGC), which is the condition requiring a rehabilitation stay. “The IRF PPS uses data from the IRF-PAI to classify patients into distinct groups based on clinical characteristics and expected resource needs. These distinct groups are called ‘case-mix groups’ or ‘CMGs.’ To classify a ‘typical patient,’ one who has a length of stay of more than 3 days, receives a full course of inpatient rehabilitation care, and is discharged to the community, into a CMG, the admission IGC, the admission motor and cognitive scores from the FIM,* and the age at admission are required. The CMG and comorbidity tier determine the unadjusted federal prospective payment rate.”13

The Patient Assessment Instrument is best known for having incorporated the Functional Independence Measure (FIM)14 along with function modifiers, quality indicators, and additional patient information. “The FIM instrument is a basic indicator of severity of disability . . . . The need for assistance (burden of care) translates to the time/energy that another person must expend to serve the dependent needs of the disabled individual so that the individual can achieve and maintain a certain quality of life. The FIM instrument is a measure of disability, not impairment. The FIM instrument is intended to measure what the person with the disability actually does, whatever the diagnosis or impairment, not what (s)he ought to be able to do, or might be able to do under different circumstances (p. III-1).”*15

Demographic, payer, medical, admission, and discharge information are included in the IRF-PAI. “The function modifiers assist in the scoring of related FIM items and provide explicit information as to how a FIM score has been determined.”15 These modifiers apply to bowel and bladder control, tub and shower transfers, and distances covered by walking or in a wheelchair. The FIM instrument specifically addresses the amount of assistance required for the functional activities of eating; grooming; bathing; upper body and lower body dressing; toileting; bladder and bowel management; bed, chair, and wheelchair transfers; toilet transfers; tub transfers; shower transfers; locomotion via walking or wheelchair; stairs; comprehension; expression; social interaction; problem solving, and memory. Each has its own algorithm to determine the FIM score. Quality indicators include respiratory status, pain, pressure ulcers, and safety (balance and falls).15

The FIM instrument has a total of seven levels of assistance. These are divided into two main categories, Independent—No Helper, and Dependent—Requires Helper. The two items in Independent—No Helper consist of Complete Independence—7 and Modified Independence—6. The highest score of 7 indicates that the patient completes the task safely, in a timely manner, and without any assistive devices. A score of 6 means that the patient requires a device or takes extra time or safety is an issue. The Dependent—Requires Helper category is further divided into two sections: the Modified Dependence—5, 4, and 3 scores, in which the patient provides 50% or more of the effort, and the Complete Dependence—2 and 1 scores, in which the patient’s effort is less than 50%. Supervision or setup, 5, denotes no physical contact with the patient; the patient requires coaxing or someone standing by, or a helper may need to set up the equipment. Minimal contact assistance, 4, includes touching; the patient is doing 75% or more of the activity. Moderate assistance, 3, indicates that more than touching is required, with the patient giving 50% to 74% effort. Maximal assistance, 2, has the patient supplying 25% to 49% of the effort. In Total assistance, 1, the patient performs less than 25% of the workload. There is a training manual available to assist the clinician in completing this form.15

A similar data or documentation form is used in pediatrics: the WeeFIM II System. “The WeeFIM instrument was developed to measure the need for assistance and the severity of disability in children between the ages of 6 months and 7 years. The WeeFIM instrument may be used with children above the age of 7 years as long as their functional abilities, as measured by the WeeFIM instrument, are below those expected of children aged 7 who do not have disabilities. The WeeFIM instrument consists of a minimal data set of 18 items that measure functional performance in three domains: self-care, mobility, and cognition.”16

Resident assessment instrument

In SNFs, the PPS is designed to cover the costs of providing care on a daily basis. This includes payment for ancillary services. The BBA required that the payments be adjusted for case mix. Case mix refers to the diversity of patients/residents on the basis of their complexity of medical problems or need for resources. This accounts for the increase in costs of complicated or involved cases. It ensures that facilities accept a variety of patients, rather than only those who require the least amount of services. In SNFs, a method of classifying each resident was developed to adjust the payments relative to the staff resources required to care for and to provide therapy to the residents. There is a higher cost associated with residents who require more resources or one-on-one care by staff. The facility should be reimbursed at a higher rate for these residents than for those who are more independent. Facilities are also reimbursed at a higher rate for residents who are receiving skilled services. All this information is acquired in the RAI, which is composed of three parts: the MDS, the Resident Assessment Protocols (RAPs), and the Utilization Guidelines. The RAI provides a structured method for the facility to create individualized care plans, to communicate on an internal and external basis, and to monitor quality performance. The MDS indicators are factored into the calculations for the Resource Utilization Groups, version III (RUG-III). RUG-III is the complex classification system used by CMS to determine the daily payment rate for the SNF PPS. RUG-III, in addition to many other categories, has a Rehabilitation category with five subcategories that describe the intensity of therapy received. The subcategories are determined by the number of minutes of therapy and the number of therapies each week.

The MDS is completed on a set schedule. After the initial 5-day, then 14-, 30-, 60-, and 90-day reports, the MDS is filed on a quarterly and annual basis. The MDS requires input from residents, their families, physicians, therapists, and dieticians. Facility staff from direct care, social services, activities, billing, and admissions is also consulted. The resident’s performance over the entire 24-hour day is reviewed and recorded to create an individual picture of strengths and needs. The MDS includes a complete review of the resident’s health, sensory systems, activity levels, behaviors, continence, activities of daily living (ADLs), physical and functional status, medications, procedures, and discharge plans. Although the MDS assesses activities similar to those of the FIM, the format is quite different. The Functional Status section is composed of Activities of Daily Living Assistance, Bathing, Balance during Transitions and Walking, Functional Limitations in Range of Motion, Mobility Devices, and Functional Rehabilitation Potential. The Activities of Daily Living Self-Performance subcategory of Activities of Daily Living Assistance includes bed mobility, transfers, walk in room, walk in corridor, locomotion on unit, locomotion off unit, dressing, eating, toilet use, and personal hygiene. The scoring system is based on an activity occurring three or more times. Use code 0 for Independent, no help or staff oversight; 1 for Supervision—oversight, encouragement, or cueing; 2 for Limited assistance if the resident is highly involved in the activity; 3 for Extensive assistance if the resident is involved in the activity and staff members provide weight-bearing support; and 4 for Total dependence if full staff performance is required every time. This section has a separate but related area to record the ADL Support Provided. In this case, the coding is 0 for no setup or physical help from staff; 1 for setup help only; 2 for one-person physical assistance; and 3 for physical assistance from two or more persons. The MDS has a training manual available to assist with completing the instrument.17

The RAPs are used to identify problems and to create individualized care plans. Certain responses from the RAPs initiate triggers, which identify potential or actual problems. From the triggers, areas of concern are further researched to determine complications and risk factors in addition to noting the need for referrals to appropriate health professionals. Utilization Guidelines are necessary to analyze the information gathered from the RAPs.

In response to providers, consumers, and others, CMS implemented the new and improved MDS Version 3.0 effective October 1, 2010. This redesigned version incorporated many significant changes. Based on a RAND/Harvard team effort, the MDS 3.0 is much easier to read and accomplishes several goals. These include improved resident input, improved accuracy and reliability, increased efficiency, and improved staff satisfaction and perception of clinical utility. A new development with MDS 3.0 is the addition of the Care Area Assessment (CAA) Process to assist with the interpretation of the information gathered from the MDS. As of October 2010, the RAI components are the MDS 3.0, the CAA process and the RAI utilization guidelines. An updated classification system, RUG-IV, was scheduled to be introduced at the same time as the MDS 3.0. However, while Section 10325 of the Affordable Care Act allowed CMS to implement the MDS 3.0 as scheduled, this same Section mandated a delay of the implementation of the RUG-IV classification system by one year. Portions of RUG-IV were implemented on an interim basis on October 1, 2010. The purpose of RUG-IV is to more accurately allocate payments. RUG-III bases payments on predicted therapy minutes from the MDS, causing inaccurate classifications and payments to SNFs in some instances. RUG-IV calculates the average daily number of therapy minutes based on the actual number of minutes provided to assign patients to Rehabilitation categories. The number of minutes of therapy received affects the reimbursement rate. This is why it is very important to correctly document the time spent treating the resident in addition to the resident’s functional status.18

Outcome and assessment information set

The home health PPS, introduced with the BBA, uses a similar system as do the acute-care facilities, IRFs, and SNFs. There is a standard base payment rate adjusted according to several variables, including geographical differences in wages, outliers, and the health condition and care needs of the patient. The latter, also referred to as the case mix, is determined by items in the Outcome and Assessment Information Set. On January 1, 2010, HHAs began using OASIS-C version 2.00 at the direction of CMS.

“The Outcome and Assessment Information Set (OASIS) is a group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement. The OASIS is a key component of Medicare’s partnership with the home care industry to foster and monitor improved home health care outcomes. The goal was not to produce a comprehensive assessment instrument, but to provide a set of data items necessary for measuring patient outcomes and essential for assessment—which home health agencies (HHAs) in turn could augment as they judge necessary. Overall, the OASIS items have utility for outcome monitoring, clinical assessment, care planning, and other internal agency-level applications.”19

The OASIS includes sections on patient demographics, clinical record items, patient history and diagnoses, living arrangements, sensory status, integumentary status, respiratory status, cardiac status, elimination status, neuro/emotional/behavioral status, ADLs and