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Why is there the need for RCS-1?

We’ve been expecting this for a while. There has always been significant overuse of therapy in the skilled nursing setting and CMS has identified that this is a huge problem that is pervasive across the country. There are facilities that are doing the right thing. But, there are a lot that aren’t. And that is clear in the fact that everyone is at the same mid-number of minutes for therapy. And it just so happens that number of minutes gets you to a higher RUG level. So, the fraud they felt was going on was really the catalyst for RCS-1.

What is RCS-1 and who is impacted?

“You are now going to be reimbursed on quality care, not just because you provided a service.”
You are now going to be reimbursed on nursing care, not therapy services provided.

The Resident Classification System 1 (RCS-1) is the new Federal payment system that will replace the current Prospective Payment System RUG IV 66 (PPS) for Medicare beneficiaries. The RUG system was based on utilization, what you provide. The change to RCS-1 indicates the shift to value-based care. CMS has been making this shift, but RCS-1 really punctuates it. You are now going to be reimbursed on quality care, not just because you provided a service.

With that comes a shift in thinking. We used to talk about how people would “RUG out” after you completed the MDS, in terms of what services are you throwing at a resident. Now it’s taken a shift to what does this person need based on their entire care needs and condition. And, that’s what will drive reimbursement.
The four Case Mix adjusted components are:

a. Physical and Occupational Therapy (PT/OT)
b. Speech-Language Pathology (SLP)
c. Non-Therapy Ancillary (NTA)
d. Nursing

All of these components combine to give you your total case mix adjusted per diem payment. The exact calculation for this is fairly complex and your EHR should help with that. Rather than just being in a therapy RUG or a nursing RUG, you can have a score in each of those components. Even if you aren’t receiving therapy right now, you still have a score based on the condition. This is a big shift.

How should skilled nursing organizations prepare for RCS-1? Can they?


Well, to start with, without the final rule and the date being pushed, I’m worried that organizations are going to put off preparation for RCS-1. But, what we do have now are the MDS adjustments. So we know how they are going to calculate it. On October 1, we will be filling out the MDS and the data will be collected. We should have more information on the rule soon.

Organizations need to look at these calculations and understand how it will impact them. There are calculators available to get an idea of how the RCS-1 changes will affect you. There will be some winners and there will be some losers. Think it through.

How will this impact the implementation of services? How will it affect your delivery of therapy?

The biggest change is going to be to the therapy department, I think everyone understands that. In the past, they never promoted the use of group or concurrent therapy. Now, that’s going to be emphasized. How can you be efficient at delivering the same quality of care you delivered before?

Also, I talk to a lot of organizations now that are ramping up to take a higher clinical acuity residents. But, you can’t expect nurses who have been taking a slower pace long-term care resident to just be able to take care of higher acuity residents. You need to be able to implement infrastructure that can help your staff, tools and facility layout to help prepare you for a higher level of care you want to provide.

For more information on RCS-1 from CMS, click here.

Maria Arellano MS, RN, PMC-III
Maria is the Clinical Product Manager for American HealthTech. To learn more about American HealthTech, click here.