Doctors, Software, Training: Preparing for ‘Non-Negotiable’ PDPM Coding Pressures

Starting October 1, skilled nursing facility operators will have no choice but to become proficient with a specific type of medical coding that previously had no bearing on reimbursements — and leading industry voices say there are multiple paths to getting there.

ICD-10 codes, specific diagnosis identifications long used by hospitals, will play a key role in the new Patient-Driven Payment Model (PDPM), and facilities only have a few more months to get staffers up to speed.

“Correct ICD-10 coding is non-negotiable,” Caryn Adams, director in the health care senior living practice of consulting and accounting firm Wipfli LLP, said during a presentation at the American College of Health Care Administrators’ (ACHCA) annual convocation in Louisville, Ky. earlier this week.


Her presentation partner, fellow Wipfli director Patricia Boyer, agreed, pointing to the industry’s general lack of knowledge around the topic.

“Diagnosis is going to drive everything with PDPM,” Boyer said. “As an industry, we don’t do a good job with ICD-10 coding. It really has not been our focus over the years, because it has not been necessary.”

But Adams also joined the growing group of leaders who have emphasized that familiarity, and not complete chapter-and-verse expertise, will be sufficient to secure the proper reimbursements under the new system.


“I don’t know that your ICD-10 coordinator needs to be certified,” she said. “They need to be competent.”

Clear documentation

The central tenet of the Patient-Driven Payment Model is that providers should be reimbursed for the complexity of care they provide, and not the amount of therapy hours that a resident receives. As a result, all of a patient’s specific needs should be clearly identified and recorded on the Minimum Data Set (MDS) and other documentation to ensure that operators don’t end up offering care for which they aren’t compensated.

Even small differences can have a major impact, and the task can appear daunting. Providers have more than 70,000 ICD-10 diagnosis codes to choose from — 23,000 of which aren’t associated with any reimbursable skilled nursing services, Adams pointed out. Should a facility select one of those codes to nowhere, the Centers for Medicare & Medicaid Services (CMS) will classify the bill as “return to provider,” or RTP, and the SNF could receive no money for the services provided.

“We don’t know if you’re going to get the default rate, the base rate, or nothing and have to appeal,” Adams said. “How many of us want to be sitting there waiting for those dollars?”

In a landscape where nursing homes operate on razor-thin margins — or routinely generate operating losses — waiting and hoping for reimbursements isn’t an option, so Adams suggested focusing on ICD-10 training as the October 1 implementation date moves closer. Providers should invest in educational materials, she said, while also working with existing physician partners — who have generally more experience with the ICD-10 system.

“We can talk to our physicians about why we need that, and maybe your medical director can step in and talk to other physicians for you if you’re having a problem,” Adams said.

Software solutions

On the physical therapy side, those more than 70,000 ICD-10 codes must eventually correlate with one of only four clinical categories under the new system: Major joint replacement or spinal surgery, other orthopedic, medical management, or non-orthopedic surgery and acute neurologic.

Paring those down could be too much work lay at the feet of MDS coordinators, Aegis Therapies national director of outcomes and reimbursement Bill Goulding said in a separate session, especially with precious Medicare dollars on the line.

“It’s not a manual job. It’s a software job,” Goulding said. “So you need to be talking with your software vendors.”

Ideally, a facility or therapy provider’s software system should be able to identify which of the thousands of codes are associated with a reimbursement category — but beyond that, it’s still up to clinicians to determine the appropriate type and amount of care.

“That software shouldn’t be telling them which code to pick. It should be telling them which codes map to these four categories and which do not,” Goulding said. “The rest is a clinical decision.”

Training, not expertise

Adams isn’t the only person to suggest in recent months that providers shouldn’t aim for total ICD-10 mastery when preparing for all the of the new PDPM variables. Multiple experts last month told SNN that skilled nursing coders won’t need to go into the same level of detail as hospitals, with appropriate training of existing employees likely to suffice — without the need to hire dedicated ICD-10 coders.

“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, said at the time. “You need to train them on what they need to know, and what they need to know is not that.”

Speaking at an industry conference last month, leading reimbursement consultant Marc Zimmet took that message a step further, claiming that the financial stakes of proper coding weren’t enough to justify costly interventions.

“You’ve got to try very hard to screw up this rate,” Zimmet said. “This message is not being put out there. Coding is important, but don’t go crazy with experts. You don’t need to. Why? The money’s not here.”

Instead, Adams suggested, staffers shouldered with coding responsibilities should focus on knowing the top 10 diagnoses in their particular patient population, and always strive for as much specificity as possible when recording resident conditions.

“Give your ICD-10 coders all the options in the world to get that education,” she said.

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