The proposed rules under RCS-1 may mean significant changes for therapy services.

Deciphering RCS-1: What It Could Mean for Therapy Services

For many therapy providers, the key focus of 2017 has been preparing for the implementation of Phase 2 of the Centers for Medicare and Medicaid Services (CMS)’s Final Rule, which went into effect this past month.

But those who provide therapy services now have a new potentially groundbreaking proposed rule to prepare for: the October 2018 (FY 2019) implementation of Resident Classification System, Version 1 (RCS-1), a new reimbursement model proposed by CMS.

Because RCS-1 isn’t simply a revision of the current Resource Utilization Group (RUG) system—the payment model that SNFs have used for nearly 20 years—but rather a comprehensive overhaul of therapy reimbursement rules, 2018 could prove to be a challenging year for many SNFs.

While RCS-1 is still being drafted, therapy providers can take steps to understand the new rule’s potential implications for skilled nursing and rehabilitation services—and prepare for these changes.

Let’s take a look at CMS’ proposed changes and how they may affect SNFs and therapy services.

The Differences Between RUG-IV and RCS-1 As They Relate to Therapy Services

CMS’ objective in implementing RCS-1 is to encourage therapy providers to deliver therapy to residents based on their needs, not providers’ financial goals. As such, under the new payment model, reimbursements will be based on objective resident characteristics, rather than the traditional service-based metrics.

Of the numerous changes outlined in RCS-1, there are a handful of key differences that are worth addressing, which include:

  • a different system for classifying patients
  • a significant decline in reimbursements
  • a shift from primarily individual therapy to group and concurrent therapies
  • a marked decline in the number of scheduled Prospective Payment System (PPS) assessments

To begin, let’s look at how resident classification will change. Under the RUG-IV case-mix methodology, residents are classified into one of 66 possible groups that fall under two case-mix indexed components: therapy and nursing.

Under RCS-1, however, residents will be grouped into 10 classifications that fall under four case-mix indexed components:

  • physical and occupational therapy
  • speech-language pathology
  • non-therapy ancillary
  • nursing

But how do these new classifications translate in terms of reimbursements?

It’s simple, really. RUG-IV employs an index maximizing system that incentivizes higher therapy utilization with consistent rates. On the other hand, RCS-1 uses an index combining system that encourages lower therapy utilization with declining rates.

In other words: Gone are the days when therapy minutes provided determined reimbursements. With RCS-1 in place, reimbursements will be based on case-mix classification.

How RCS-1 Stands to Impact Skilled Nursing and Therapy Services

RCS-1 will also change the way therapy providers manage rehab services. Therapy providers will see a marked shift toward using less therapy services. Thus, many SNFs will see a decline in therapy reimbursements but an increase in reimbursements for nursing care that’s already being provided.

In addition to less rehab services, therapy providers will now be administering fewer assessments. Under RCS-1, SNFs will no longer be required to complete five scheduled PPS assessments (five-day, 14-day, 30-day, 60-day, and 90-day, respectively). Instead, providers are only required to complete a single scheduled PPS assessment at five days—and only complete a Significant Change in Status Assessment as needed.

And finally, to ensure patients receive quality care without driving up costs, therapy providers will be required to include more group and concurrent therapies in residents’ plans, rather than primarily individual therapy.

Preparing for RCS-1 and Its Implications for Therapy Services

With the potential implementation deadline in the not-so-distant future, there’s no time like the present to get a jump on preparing for RCS-1.

Three key areas that providers can focus their preparation efforts include:

  • technology
  • clinical protocols
  • referrals

From a technology perspective, therapy providers will need to ready their systems for the new payment model and the new case-mix components. Because implementation is less than a year away, this feat will prove to be one of the most challenging for facilities.

To get ahead on the new resident classification system, therapy providers can begin establishing strong clinical protocols for the various classifications based on clinical evidence. These new protocols should also include RCS-1’s mix of treatment modes (i.e., individual, concurrent, and group) coupled with the specific treatment approaches used within those modes.

And finally, due to declining reimbursements for therapy services, many providers will need to grow their referral networks to ensure they’re meeting the bottom line. To achieve this, therapy providers will need to demonstrate a commitment to delivering excellent patient care, backed by supporting, easy-to-comprehend data.

Apex Rehab partners with Skilled Nursing Facilities to understand and implement regulatory changes like RCS-1 that may impact therapy services. To put us to work for your SNF, call (412) 963-9698 or fill out this quick form.