As you are probably aware, there is a lot of change about to take place in our industry.  The amount of information is overwhelming and confusing.  Let’s see what is in store for us.

Two main areas of change are noted in the SNF Final Rule  and The Medicare Physician Fee Schedule Proposed Rule for calendar year 2019. Below is are the highlights. This is not an all-inclusive review.

SNF Final Rule Highlights:

  • CMS finalized the FY 2019 market basket update for SNFs at 2.4%. This is an overall increase in Medicare payments beginning October 1, 2018. Dramatic change in the SNF payment system since the commencement of the Prospective Payment System (PPS) in 1998.
  • Value Based Purchasing Program (VBP) will apply either positive or negative incentive payment to services provided by a SNF based on their performance on a single claims-based all cause 30-day readmission measure. The goal of VBP is to improve outcomes through rewarding providers by limiting readmission of their residents back to the hospital
  • SNF Quality Reporting Program (QRP)
  1. SNFs who fail to submit quality reporting data to CMS will face a 2%-point reduction to the applicable annual market basket percentage update
  2. Public Display of the functional outcomes measure in 2020
  3. Measure on MDS expanded effective 10/1/18 include:
    • Skin integrity
    • Falls
    • Function
    • Drug Regimen Review
  • Payment Driven Payment Model (PDPM) will go in to effective October 1, 2019 (FY 2020)
    1. Designed to improve the incentives to treat the needs of the whole patient instead of focusing on the amount of services the patient receives
    2. Will require revisions to clinical assessments, clinical documentation systems, skilled care team communication, medical diagnosis coding and management and billing
    3. Tapering payment the longer the patient’s length of stay
    4. Allows for up to 25% Group and Concurrent modes of therapy delivery. If more than 25% of group and concurrent is delivered, the provider will receive a non-fatal alert
    5. 6 components that comprise the per diem rate:
      • Physical Therapy
      • Occupational Therapy
      • Speech Pathology
      • Non-Therapy Ancillary Services
      • Nursing
      • Non-Case Mix

Physician Fee Schedule Proposed Rule Highlights:

  • Comments to the proposed rule will be accepted until September 10, 2018. Would go in effect January 2, 2019.
  • The proposed rule proposes to continue use of the KX modifier on Medicare Part B therapy claims and continue the targeted medical review process.
  • Proposes discontinuation of therapy Functional Limitation Reporting (G-Codes and Severity Modifiers)! YAY! Functional Limitation Reporting has been an administrative burden for providers since its commencement.
  • As a “pay for” for the therapy caps repeal, outpatient PT and OT treatment provided by therapist/therapy assistants will be at a reduced rate of 85% of the normal Medicare Part B payment in 2022.
    1. CMS will need to establish new modifiers by January 1, 2019 for this payment reduction.
    2. Providers will need to begin using these new modifiers on claims beginning on January 1, 2020.
    3. The reduction in payment takes effect January 1, 2022.
  • Proposes potentially misvalued codes. The proposed rule does not target therapy codes as potentially misvalued.
  • Adds two procedures to the telehealth list
    1. G0513
    2. G0514
  • Proposes change in documentation, coding, and payment to reduce administrative burden and to improve payment accuracy for office and outpatient Evaluation and Management visits
  • Proposes to pay separately for two newly defined physicians’ services furnished using communication technology
  • Proposes to add physical and occupational therapists to the list of MIPS eligible clinicians beginning with the 2021 Merit-based Incentive Payment System (MIPS) payment year in Private Practice ONLY because CMS hasn’t indicated how therapists working for a facility that bills Medicare will report under the Quality Payment Program (QPP).


Gina Tomcsik, Director of Compliance