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Section 10325 of the Patient Protection and Affordable Care Act (ACA) includes a provision addressing Medicare payments for SNFs in FY 2011.   This section mandates a delay in the introduction of the Resource Utilization Groups, version 4 (RUG-IV) case mix classification system until FY 2012.  In addition, it requires that version 3.0 of the Minimum Data Set (MDS 3.0) Resident Assessment Instrument will be implemented as planned in FY 2011.  Finally, the section requires that certain specific components of RUG-IV, specifically, the concurrent therapy and look-back revisions, be applied in FY 2011.   While there is currently an existing grouper (the software program that uses assessment data to assign each SNF resident to the appropriate RUG) that utilizes the 53-group RUG-III system and the MDS 2.0, and a revised grouper that utilizes RUG‑IV and the MDS 3.0, a grouper that incorporates the particular combination of features mandated by the statute does not currently exist.

 

Accordingly, as we continue to build the payment infrastructure needed to incorporate the combination of features mandated by ACA, we will apply interim payment rates, effective October 1, 2010, that reflect not only the use of MDS 3.0, but also the new RUG-IV system in its entirety as finalized in the FY 2010 SNF PPS final rule (74 FR 40288, August 11, 2009).  Once the necessary infrastructure is in place, we will then retroactively adjust the rates to reflect a hybrid RUG-III (HR-III) system which incorporates RUG-IV’s specific revisions on concurrent therapy and the look-back period within the framework of the existing 53-group RUG-III system, along with the use of MDS 3.0. 

 

This approach will allow CMS to make payments with the least disruption for providers and beneficiaries.   As we do every year, we will publish the specific payment rates for the upcoming fiscal year in the Federal Register, and provide additional guidance concerning implementation of the FY 2011 payments in the near future.  Finally, we note that there is legislation pending in Congress that would repeal section 10325 of the ACA, and thus eliminate the need to retroactively adjust payments.