Providers Can’t Lose Sight of ‘Where the Money Is’ Under PDPM

When it comes to the changes coming to Medicare reimbursement methodology, coding figures prominently in the discussion among skilled nursing providers.

But while it’s important for SNFs to make sure staff education and training on that topic is up to date, there are several other components of reimbursement under the Patient-Driven Payment Model (PDPM) that will be in some sense new territory for SNFs. And some arguably have even more weight than ICD-10 coding prowess.

One of the most important will be getting all the clinical documentation for residents up front, according to Denise Gadomski, health care partner at the consulting firm Plante Moran.


“Under the RUGs reimbursement system, we haven’t necessarily focused quite as much on obtaining all the clinical documentation, maybe, that we can up front from a hospital,” she told Skilled Nursing News “And part of the problem is that the hospital may not necessarily always make that available, but it will be critically more important now to obtain as much knowledge as we can up front, prior to admission.”

And when the patient gets through the doors, the SNF will have to assess them fully and immediately to make sure that the clinical and medical condition of the individual is fully understood, she added.

Proper assessment is already looming large in the minds of SNF providers as they get ready for the new system, which will replace the Resource Utilization Group (RUG) model on October 1. In fact, a survey of 70 respondents — representing more than 130 SNF communities — from therapy provider Reliant Rehabilitation found that 90% would rate a highly skilled evaluation team as the top attribute when considering a therapy partner. And in the same survey, 44% of respondents said the initial evaluation process was their top PDPM issue, second only to therapy treatment pathways.


The net result is that while the initial evaluation was important under the RUG system, it takes on a new significance under PDPM.

The five-day Minimum Data Set assessment will drive reimbursement under the new model, Gadomski told SNN, in part driving that total focus on capturing a resident’s full clinical status.

“Specifically, it’s thinking about the non-therapy ancillary rate component, and those 50 conditions that we can capture from a co-morbidity standpoint,” she said. “And I don’t think we’ve really been focused on capturing all of that and making sure we’re putting that on the MDS.”

The Centers for Medicare and Medicaid Services’ (CMS) stated goal for PDPM was shifting incentives so that the acuity and condition of the patient drive reimbursement, rather than the number of therapy minutes provided. But more will come into play than a specific condition or code: Different parts of the PDPM calculation will have different effects on the overall rate of reimbursement, Zimmet Healthcare Services Group president Marc Zimmet said at the eCap Healthcare Summit outside of Miami in February.

And excessive focus on coding is not going to help SNFs under PDPM, he told SNN. Medicare is unlikely to be concerned with slight coding inconsistencies, as long as the code puts the patient into the right category among the case-mix components of physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), and nursing, Zimmet argued.

“An auditor’s [unlikely] to come in and say ‘Out of 1,400 acute infection codes, you picked the wrong one. You’re getting denied,’ ” he said.

For that reason, SNFs need to take a hard look current processes, as well as their data — and leaders have to determine how their staff will work as a team, Gadomski emphasized. Plante Moran has found, in looking at samples of MDS data, that not all clinical conditions were captured and reported, simply because they were not reimbursement drivers.

That matches what another consulting and advisory firm has seen in the space.

“It is common practice … when you have somebody who’s going to calculate into a rehab RUG group, the majority of the other areas on the MDS assessment don’t get a lot of attention,” Sherri Robbins, managing consultant at accounting and advisory firm BKD, said in a webinar hosted by SNN in January.

The nursing and the NTA components are “where the money is,” but the codes required for PT and OT are getting most of the attention because of how crucial to reimbursement therapy and rehab minutes have been under RUGs, Zimmet said. And while the codes are going to be important for PDPM, the new model will bring other process changes that SNFs must implement. Like Gadomski, he stressed that pre-admission documentation will be key.

“Upon admission, we’ve got to see — I’m talking by day one — what NTAs this patient has,” Zimmet told SNN. “And some of it is going to be pretty easy, but others — it’s not going to be documented anywhere.”

Zimmet suggests that providers shouldn’t trust that the hospital will accurately list every last condition — for instance, a resident’s obesity or narcolepsy might not show up on his or her paperwork.

“So the way you case manage from day one, the second the referral comes over, you’ve got to look at it,” he said.

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