LTACHs, Rehab and Psych Hospitals! Expand Services. Create New Revenue Streams. Timing is Everything! Start Planning Today.
Nobody knows LTACHs, Rehab and Psych hospitals better than Advis. Now, the Center for Medicare and Medicaid Services (“CMS”) has announced a policy that allows IPPS exempt hospitals to establish distinct part units (“DPUs”) in rehabilitation or psychiatric services. Advis sees a way for hard pressed providers to stabilize, perhaps even grow, their revenues, and we cannot stress enough the relevance of this new opportunity to your business model. Why bill at a med/surg level under the IPPS when you can operate under a specialized reimbursement system distinct from the IPPS.
CMS confirmed the new policy in its Final Rule, for the first time stating that hospitals excluded from the IPPS could establish a DPU. For cost reporting periods beginning on or after October 1, 2019, IPPS-excluded hospitals may add these important service lines to their continuum of care. In order to optimize the new policy, the DPU should be operational the first day of the hospital’s cost reporting period. In addition, it is necessary to obtain requisite enrollment and DPU attestation approvals prior to the start of the hospital’s cost reporting period.
How many times has basic need and community demand called for a geriatric-psych or rehabilitation unit to assist an organization’s LTACH population? Before this regulatory change, coordinating the two was not an option. Now, this regulatory change represents a major opportunity for healthcare organizations to continue pushing for a unified reimbursement structure for post-acute care programs. Don’t wait to see how this change works for your competition. Don’t be left behind. Advis specializes in maintaining compliance and revenue during the requisite transition periods while adapting to significant regulatory change. Act now.
Recap of Final Rule Permitting IPPS-excluded Units Within IPPS-Excluded Hospitals
On October 1st 2019, hospitals, including Long Term Acute Care Hospitals (“LTACHs”), Inpatient Rehabilitation Facilities (“IRFs”), and Inpatient Psychiatric Facilities (“IPFs”), will be able to operate a DPU within their four walls. The Final Rule also identified opportunities and requirements for hospital-within-hospital (“HwH”) arrangements, and satellite facilities. For instance, under the Final Rule an LTACH could establish a psychiatric DPU, rehabilitation DPU, or both, to be co-located within the hospital. The new unit would be reimbursed under its own excluded reimbursement methodology. However, CMS does prohibit the establishment of DPUs that furnish the same patient services as the hospital. Additionally, the unit would be required to meet all of the required Medicare Conditions of Participation (“CoPs”) in order for the hospital to maintain its Medicare certification.
Impact to Providers
Positioning a DPU within an LTACH expands the post-acute care continuum under one umbrella; it enhances decision making for appropriate and prompt patient placement. The new policy also allows LTACHs with underutilized beds to right size their operations, which will demonstrate itself through increased revenues. The addition of a DPU within an LTACH can also better position existing organizations for anticipated reimbursement changes to the post-acute care reimbursement structure. By eliminating movement between organizations, having multiple post-acute providers under one roof may also increase patient satisfaction and thus improve your market position.
“Strategic Tips” for Determining the Addition of an Excluded-IPPS Unit
- When determining whether or not to build a DPU, hospitals must consider several factors to determine the proper scope of service in the desired DPU. What will enhance current operations or better address a much-needed community service?
- To finalize your determination, newly-eligible hospitals should conduct a feasibility analysis to assess the likelihood of the unit meeting patient population needs while also operating at favorable costs. The determination will depend largely on patient reimbursement rates for the unit.
- Determinations must be made well in advance of the start date of the hospital’s cost reporting period. Early action ensures that enrollment and DPU regulatory attestations in support of an IPPS-excluded DPU can be made in a timely manner. A hospital cannot wait until the start date of its cost reporting period is imminent to request DPU Medicare certification.
For decades, The Advis Group has remained an expert in hospital strategy operations and service line development, especially for the creation and operation of DPUs and non-excluded units. Contact Advis today to determine if the option to build or operate a DPU is right for your hospital.