Seeing Changes in Your Annual CMW? Here’s Why.
Posted on Monday, March 18, 2019 1:55 PM
In February and March of each year, Corridor receives many calls from agencies regarding an unexpected drop in their case mix weight (CMW). Some assume this drop is related to changes in coding and OASIS scoring practices. More often, this drop is caused by changes CMS makes to the clinical and functional formulas which allot points based on various OASIS and coding answers. These changes are part of the annual recalibration process and directly impact CMW. An agency’s patient population and clinician’s documentation could remain the same and they most likely will experience a drop due to a decreasing number of available points. It is important for agencies to understand the recalibration process and anticipate this drop at the beginning of each year so they can best understand the financial impact.
CMS is in the final year of HH PPS case-mix weight recalibration which began back in 2015. Recalibration is a seven-step process but for purposes of this discussion, we will focus on the specific changes in the clinical points scoring over the past few years.
CMS’s first step in recalibration is determining the number of clinical and functional points to assign to the four-equation model. For CY 2019, CMS used national hourly wage data from 2016 Bureau of Labor Statistics and 2017 HH claims data to determine the number of points to assign to the model. Looking at the past five years in the chart below, you can see the overall effects each year. CY 2019 saw a dramatic decrease across all four of the equations.
Each year, CMS continues to use the same 45 clinical formulas. Of these calculations, 45% do not even result in clinical points. This is a dramatic increase since 2014 when about 21% of calculations did not result in clinical points. Looking at 2018 to 2019, we continue to see a decrease in the overall number of allotted points. The net effects show 23 formulas remain the same, 71 receives 1 to 7 less clinical points and only 15 formulas have 1 to 5 additional clinical points. The following graph shows the significant left shift resulting in an overall negative effect.
We notice similar trends with the functional calculations, however, they are not as dramatic in overall effect in decreasing the CMW. As a reminder, the number of therapy visits will continue to be a significant factor in CMW through 2019, when this payment system will change to PDGM.
Finally, its important to note that various HHRG/HIPPS scores are translating to an overall lower CMW. Since the initial recalibration drop in 2014, CMS has continually to decrease CMW per HIPPS calculations. Not only is there less opportunity to obtain clinical and functional scores, but CMS is also providing less CMW for final HIPPS codes. In turn, this results in less reimbursement.
Many people equate CMW directly to reimbursement or revenue. Agencies should also keep an eye on their wage index as it plays a significant role in final revenue calculations.
Coding does impact case mix weight in two ways, through coding of top six diagnoses and in conjunction with other OASIS responses. Many other items affect reimbursement including clients’ therapy utilization, CBSA, wage index, types of admissions, LUPA percentage, episode timing, and recertification percentage.
Corridor has solutions to drill into your agencies CMW, providing insight to KPI trends and assisting to drive operational changes to best mitigate these ever-occurring trends.
Corridor is the nation’s preferred partner and trusted business advisor to home health and hospice providers, providing quality services and impactful results for 30 years. Focusing on key operational, regulatory and financial challenges, Corridor delivering industry-unique solutions and deep expertise in coding, clinical documentation review, compliance, billing and collections , consulting and provider staff education . At Corridor, we make the business of caring for people Better! For the most important industry updates and news that impacts home health and hospice, please make sure to sign up for our weekly newsletter to receive the latest up-to-date industry information direct to your inbox!
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