PDPM Goes Beyond Therapy: Finding the Hidden Value in Skilled Nursing Ancillaries

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At surface level, the new Medicare payment model for nursing homes revolves largely around therapy, as the federal government works to realign incentives and prevent what officials claim to be a wave of unnecessary services.

Speech, occupational, and physical therapy account for three of the five components of the Patient-Driven Payment Model (PDPM), and providers have wisely spent the last year preparing for the changes to those key skilled nursing services.

But non-therapy ancillaries, a sort of catch-all category that consists of treatments for a variety of co-morbidities, can provide valuable extra reimbursements for nursing home operators — often for services that they already provide, but that they have not documented in the past.


“Those are services that we’re giving anyway,” Maureen McCarthy, president and CEO of Celtic Consulting, told SNN. “We just had no reason to capture it before.”

The list of non-therapy ancillaries, or NTAs, includes multiple medical conditions along with an associated point score, which will then be factored into the resident’s overall reimbursement math. A diagnosis of HIV/AIDS tops the NTA point list at eight, while a variety of other patent characteristics — including morbid obesity, immune disorders, epilepsy, and catheterization — receive a single point each.

In between, conditions such as IV medication add five points to a resident’s NTA comorbidity score, while a patient with a lung transplant would gain three extra points — and residents with wound-care issues, opportunistic infections, or diabetes could see a two-point boost.


Properly recording those NTAs as soon as possible will be vital for success under PDPM, according to Marc Zimmet, president of consulting firm Zimmet Healthcare Services Group.

“If you want to focus on one change right now, focus on that pre-admission,” Zimmet said. “Upon admit, we’ve got to see — I’m talking by day one — what NTAs this patient has. And some of it is going to be pretty easy, but others, it’s not going to be documented anywhere.”

Just a few missed points could result in hundreds of dollars a day in unnecessarily reduced payments, Zimmet said, making early assessments of residents crucial — to the point where buildings may want to consider sending case managers to hospitals even before admission to make sure every possible NTA makes the jump from patient to documentation to reimbursement.

“You want to talk about money? This is where the dollars are,” he said.

And the reimbursement potential may not even be obvious on its face, requiring case managers and care planners to do a little digging when evaluating residents — for instance, how a patient’s behaviors could have resulted in conditions that will require treatment.

“If someone came in and they had alcoholism in their past, you’re going to need to know about that for care planning,” McCarthy said. “Now, if they have cirrhosis, that’s going to get you an NTA point.”

Unlocking hidden value

In pitching the PDPM to the public and the skilled nursing industry, the Centers for Medicare & Medicaid Services (CMS) positioned the change as a more patient-centered alternative to the Resource Utilization Group, Version IV (RUG-IV) structure.

Because the current Medicare reimbursement system incentivizes therapy volume, CMS posited, the temptation to over-deliver therapy services was simply too great for many operators to resist — leading to a wave of False Claims Act lawsuits and accusations of unnecessary treatments. By more closely linking resident condition with reimbursements, skilled nursing operators will have both a financial and a moral obligation to provide more custom-tailored care to their residents, while significantly reducing the opportunity for fraud via bloated therapy plans.

That logic extends to NTAs, with an added benefit for nursing homes: On October 1, services that SNFs have always provided to their residents will suddenly become reimbursement-sensitive, meaning routine services like IVs and wound care could have a direct impact on operators’ bottom lines.

And trying to maximize Medicare dollars isn’t academic or opportunistic. As chronic Medicaid underfunding squeezes nursing homes across the country, offsetting losses with Medicare reimbursements has become more important than ever. In fact, just this week, a four-building senior living and care chain in Wisconsin was forced to exit the Medicaid business at three of its properties; Medicare reimbursement changes had gradually eroded its ability to offset $5 million to $7 million in annual Medicaid losses.

Don’t leave money on the table

NTAs will form a crucial interplay with other case-mix categories included in PDPM. Along with the three therapy disciplines, nursing care forms the fifth and final grouping, bringing additional care and reimbursement potential. Should a resident require isolation, for example, that would increase the NTA score by a single point — but also boost the nursing score in the overall PDPM calculation, providing a double opportunity for increased revenue on a single event, McCarthy said.

In addition, the PDPM system allows for so-called interim payment assessments (IPAs), or updates to a resident’s reimbursement picture based on changes in condition during his or her SNF stay. Under the PDPM structure, there are no rules regarding when nursing home staff can perform an IPA, McCarthy noted, and even slight changes to a resident’s care plan could result in additional NTA points that could bring in extra per-day reimbursement dollars.

For instance, should a resident require an IV and also treatment for an opportunistic infection during his or her time in a SNF, those condition changes could lead to an NTA point boost of seven.

“The case management piece is going to be another avenue for facilities to manage their revenue, but it’s going to be a skill that the MDS [minimum data set] coordinators are going to have to learn,” McCarthy said.

McCarthy suggests keeping a cheat sheet of common NTA codes handy, and while clinical leaders may not necessarily want to trigger an IPA for a single point change in NTA score, knowing the codes and identifying opportunities for reimbursement changes will be vital moving forward.

“You can really help your facility to not leave money on the table,” she said.

Maggie Flynn contributed reporting to this story.

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