Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare
Rhode Island will require the use of the Optional State Assessment (OSA) for Nursing Facilities Reimbursement effective October 1, 2023
Background: The Centers for Medicare & Medicaid Services (CMS) is ending support for Resource Utilization Groups (RUG)-III and RUG-IV on federally required assessments for patients residing in Nursing Facilities and Skilled Nursing Facilities as of October 1, 2023. The ending of this support was previously communicated in a 2018 Medicaid Informational Bulletin which had signaled that this support would end on October 1, 2020, however, because of the COVID-19 Public Health Emergency, the end date was delayed, providing stakeholders additional time to make necessary systems changes. CMS released a State Medicaid Director’s Letter (SMD# 22-005) on September 21, 2022. This letter, coupled with the release of draft Minimum Data Set (MDS) changes on September 1, 2022, has several implications for state Medicaid programs and their nursing facility (NF) reimbursement systems. Beginning October 1, 2023, MDS items necessary for resident classification under a RUG-based acuity system (RUG-IV) will no longer be available on the standard MDS item sets. States wishing to maintain a RUG-based acuity system after October 1, 2023, need to implement and require submission of an OSA as of that date. CMS will support the use of an OSA by state Medicaid agencies wishing to maintain a RUG-based acuity system through September 30, 2025, at which time states must have any necessary regulatory changes in place to change from a RUG-based acuity system. Rhode Island will require the submission of OSA beginning on October 1, 2023. All nursing facilities submitting MDS assessments in Rhode Island will be required to submit the OSA assessment with all MDS assessments.
What To Do to Ensure Your Facility Is Ready for October 1st
| Beginning this October, nursing facilities will have to complete and submit Optional State Assessments (OSA). RI Medicaid will utilize the Optional State Assessments (OSA) as of 10/1/2023 to allow for continued utilization of CMS RUG-IV grouper and facility reimbursement determination. RI plans to transition to PDPM payment System effective 10/1/2025 | Nursing facility payment information is available here: https://eohhs.ri.gov/providers-partners/provider-directories/nursing-homes. The website has links to current rates and the Rhode Island Medicaid State Plan, which details the current payment methodology. Please contact the Medicaid Finance team (OHHS.MedicaidFianance@ohhs.ri.gov) for questions related to nursing facility payment. |
| Facilities should begin now reviewing MDS 3.0 Changes coming 10/1/2023. Facility should continue to complete and ensure appropriate documentation items are in place to support all contributing factors of the CMS RUG-IV grouper. | Federal based MDS Updated Guidance: CMS MDS 3.0 Facilities should begin updating documentation methods in support of new RAI guidelines & MDS 10.1.23 Federal-based required changes. However, ensuring to retain evaluation, care plans, and other documentation items that support coding RUG-IV items. Example: Section G- Late Loss ADLs, PHQ-9 |
| The OSA is a standalone assessment that cannot be combined with any other assessment type, this will be an added assessment to the required federal assessment completion schedule | Monitor & Review your EHR Provider Updates to ensure you have elected to enable the COPY OVER configuration feature to eliminate additional unnecessary workloads. |
| The OSA Item Set is 20 pages in length and includes an abbreviated Sections G, I and O (Special Treatments): The direct link to the 3 items in a .zip file is here. This file includes: | |
| RI Medicaid Case Mix FAQ under development to include OSA guidance. |
ATTENTION NURSING HOME PROVIDERS:
As you know, CMS is ending support for RUG-III and RUG-IV on federally required assessments for patients residing in Nursing Facilities and Skilled Nursing Facilities as of October 1, 2023, but will allow for the use of Optional State Assessments (OSAs) through 9/30/2025. Beginning 10/1/2025, CMS will no longer support the RUG-III and RUG-IV groupers via the OSAs. RI Medicaid has been working with CMS to understand our options regarding NF payments. From 10/1/2023 through 9/30/2025, RI Medicaid will require that nursing facilities use OSAs to continue RUG-IV based payment while RI Medicaid moves toward the adoption of the PDPM model in October 2025. The OSAs will gather the needed assessment data to calculate a RUG payment amount for provided services. Between 10/1/2023 – 9/30/2025, the only method for states to obtain a RUG calculation via the CMS submission system (iQIES) will be the OSA.
The Federal MDS assessments (quarterly, comprehensive, PPS, IPA, discharge) will not contain all needed items for RUGs and thus a score will not be calculated. Several items—A0300, D0200, D0300, G0110, K0510, O0100, O0450, O0600, O0700, and X0570 have been removed from federally required item sets but remain on the OSA for the purpose of calculating RUG-IV scores. Instructions for completing these items are included in CMS posted OSA Item Set and Manual on its website [cms.gov].
Instructions for completing other items on the OSA can be found in the respective sections of Chapter 3 of the Minimum Data Set (MDS) Resident Assessment Instrument (RAI) 3.0 User’s Manual, available on the CMS website [cms.gov].
CMS noted that if the provider’s billing software is up to date with CMS’ current MDS specification then the OSAs will be completed using existing billing software.
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