ICD-10 Coding Will Be Crucial Under PDPM — But SNFs Don’t Need to Become Experts

The Medicare payment model taking effect on October 1 this year represents a sea change for skilled nursing providers in that patient condition, rather than therapy minutes, will drive reimbursement.

It also represents a sea change in the mechanics of reimbursement. Under the Patient-Driven Payment Model, ICD-10 codes will form the basis of reimbursements, making it crucial for SNFs to have accurate coding. Most providers have noticed; in Skilled Nursing News’ 2019 reader survey, 63% of more than 400 respondents said that PDPM would result in a greater emphasis on coding for their organization.

But ICD-10 procedure and diagnosis codes number in the tens of thousands, making them a daunting training task. The good news for SNFs is that they may not have to do as much training as they might think.


“There’s a lot of ‘Oh my god, oh my god, we’ve got to train our billing team on all this detail!’ and the answer is: No, you don’t,” Mike Cheek, senior vice president of reimbursement policy at the American Health Care Association, told Skilled Nursing News. “You need to train them on what they need to know, and what they need to know is not that.”

More precision needed under PDPM

That said, Cheek immediately emphasized that this is still a major change for skilled nursing providers. The level of detail and accuracy required for ICD-10 coding under PDPM is new for SNFs, and the ICD-10 code accuracy will, come October 1, be connected to payment for services in a way that it wasn’t before.

“Right now the therapy minutes is really our primary grouper under the RUG reimbursement,” Denise Gadomski, health care consulting partner at Plante Moran, told SNN. “And really, when we move to the PDPM reimbursement model, we’re really going to be looking at utilizing the primary patient diagnosis as the key determinant of payment.”


The problem, she explained, is that SNFs typically use a code that is related to therapy delivery as the main driver of payment under the existing Resource Utilization Group (RUG) system. And a look at the Centers for Medicare & Medicaid Services’ clinical mapping tools shows that the codes that SNFs currently use don’t always match the ICD-10 figures that will be used under PDPM, Gadomski said.

“While it’s something we’re using — we’re using ICD-10 codes — we’re not really using them to the level of detail that CMS is going to be expecting us to be using,” she told SNN.

This becomes a particular issue when working with the Minimum Data Set (MDS). Under the RUG system, there were 20 MDS item fields associated with assigning someone to a rehab RUG for payment, Cheek explained. But under PDPM, the MDS will have 188 items associated with assigning someone to one of the five service-related components: physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), non-therapy ancillary (NTA) and nursing.

“Of the five service-related components, ICD-10 diagnosis information is needed for PT, OT, speech-language pathology, and it also impacts non-therapy ancillaries; for a person that would have comorbidities, that would impact the NTAs payment,” Cheek said. “That’s all ICD-10 diagnosis coding, so that’s all new. That all now has to be accurate on the claim with a good amount of precision, because if you’re coding for a component … there is a clear line of sight from the MDS ICD-10 diagnosis code to what you’re putting on your claim for payment. That’s never been that tightly defined before under RUGs.”

Training rather than hiring

With the coding process becoming much more crucial to reimbursement, SNFs may think they have to do a deep dive into the world of ICD-10 coding. In fact, in a webinar Plante Moran hosted on PDPM in December of last year, a question was posed for the audience: Is ICD-10 expertise a cause of concern for meeting the new demands of PDPM? The answer: More than 70% of responding participants were concerned to some degree.

“There was a lot of trepidation among LeadingAge skilled nursing providers because it wasn’t something they had to previously focus on for payment, or for their assessment, really,” Aaron Tripp, vice president for reimbursement and financing policy at LeadingAge told SNN.

But while SNFs do need to ensure ICD-10 coding accuracy, they don’t have to memorize what Cheek describes as the “ICD-10 telephone book.” For one thing, they don’t have to deal with procedure codes, which even hospitals struggle to deal with, he said.

“We don’t need the full ICD-10 condition coding, nor do we need to go to the level of precision that hospitals have to go for,” he told SNN. “ICD-10 coding for diagnosis is as specific as saying ‘traumatic hip fracture due to fall down stairs,’ ‘traumatic hip fracture due to slip on ice.’ It’s that specific. We don’t have to know that.”

That makes it unlikely SNFs will need to hire a dedicated coder for PDPM, LeRoy Boan, senior clinical consultant at Cantata Health, said on a webinar recently hosted by SNN. But they do need to train employees on the process of coding, while also having frank conversations with their electronic health record providers about how they allow for coding — and validation of those codes — within the EHR, he said.

With regard to ICD-10 coding training, there’s still time for SNFs to get ready for the change, even though there’s less than a year until PDPM takes effect, Tripp said. As far as the training types, both the national units of AHCA and LeadingAge have gathered resources for PDPM and are rolling out workshops and tools for their members. CMS has created maps to to show which ICD-10 codes correspond with each of the clinical categories, and AHCA has developed a PDPM-specific ICD-10 diagnosis code training for its members.

But SNFs should start making moves into training sooner, rather than later — in fact, they should start getting it scheduled now, Gadomski said. Plante Moran recommends checking on the codes in the current MDS used for financial impact assessments and checking which codes did not make it from the RUG system to the models for PDPM, among other things, she said. Then, after training on ICD-10, a SNF should take a fresh look at the current skilled population and see what the results look like.

“We do have time, so let’s go ahead and take a look at our current population,” she said. “Thinking about it under PDPM, what are those codes we should be using, and how do we map based on CMS guidelines?”

And when it comes to training, more will always be better, in large part because facilities and their levels of expertise are so variable, Tripp told SNN. But one point he emphasized was that accuracy will play a role in more than just reimbursement.

“The people I’ve talked to when I talk about ICD-10, for them it’s not about ‘How do I make the most money?'” he said. “But it’s: ‘How do I make it the most accurate, to give the best care to the residents we’re serving?'”

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