How could the proposed “Pathways to Success” rule affect evaluation and management services in skilled nursing facilities?

In August, the Centers for Medicare and Medicaid Services (CMS) released a sweeping proposed rule that, if enacted, will significantly change the Medicare Shared Savings Program (MSSP).

Under the proposed rule, CMS will change how it determines whether evaluation and management (E&M) services were furnished in a skilled nursing facility (SNF), as opposed to a custodial (non-skilled) nursing facility setting, for purposes of beneficiary assignment to an accountable care organization (ACO). The change will cause minimal impact to physicians who do not primarily practice in a nursing facility setting, but there will be important effects for physicians who do:

• Most nursing facility-based physicians will see a material change in the number of assigned beneficiaries, with roughly one-third seeing an increase or decrease of at least 25%. Office-based physicians will see minimal impacts to the number of beneficiaries assigned to them as a result of this rule change.
• ACOs with nursing facility-based physicians will no longer need to focus attention on how to adjust their place of service coding practices to improve their MSSP performances.
• Nursing facility-based physicians who are in ACOs that have chosen retrospective assignment will be less penalized by the regional cost adjustment to their benchmarks under the proposed rule. However, the penalty will continue to be far greater than if the ACO were to choose prospective assignment.

In this paper, Milliman’s Anders Larson and Jill Herbold discuss the current and proposed rules related to E&M services in nursing facilities and then present an analysis of their findings.

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