Though Data on Outcomes Sparse, CMS Han’t Forgotten PDPM Monitoring — While Wage Index Drops Loom

The Centers for Medicare & Medicaid Services (CMS) has been slow to make moves on audit demonstrations for the Patient-Driven Payment Model (PDPM), the Medicare reimbursement overhaul for skilled nursing facilities that took effect last year.

But that doesn’t mean that the agency has forgotten its promise to closely monitor patient outcomes and scrutinize SNFs’ behavior under the new system, according to Heather Guin, the senior director of claim integrity at the contract therapy company TMC.

“While CMS continues to monitor how the implementation of PDPM has impacted patient outcomes and program expenses, the agency just considers it premature to release any information related to these issues based on the amount of data that they currently have available,” she said on a prerecorded webinar about the fiscal 2021 proposed rule for SNF payments, held Wednesday.


The agency is still assessing “whether PDPM is being implemented in a budget-neutral manner,” Guin said, and it might reconsider the case mix weights used under the payment system to try to address any issues on that front.

PDPM was designed to let a patient’s condition and care needs be the driver of reimbursement, rather than the number of therapy minutes provided to patients — using the components of nursing, non-therapy ancillaries, speech-language pathology and physical and occupational therapy. Depending on the category a patient falls within those categories, reimbursement could rise or fall.

TMC hosted a webinar in August last year discussing how SNFs could prepare for Medicare audits under PDPM, but in the June 2020 webinar, Guin noted that it was surprising to see that the agency doesn’t appear to be taking major steps in this direction.


“I know I’m surprised to not see any organized PDPM audit demonstrations, but CMS, their data is just not ready,” she said.

Guin’s presentation focused on the highlights of the PPS proposed rule, which will see SNFs receive a 2.3% Medicare pay increase, or a $784 million increase for Medicare Part A care, if it takes effect. This does not include any adjustments for the SNF quality reporting program or value-based purchasing (VBP) program.

CMS is also proposing some adjustments in the prospective payment system (PPS) wage index for SNFs, since the Office of Management and Budget Announced new wage area boundaries in September 2018; CMS wants to use this to identify provider status as rural or urban.

The change would be budget-neutral overall, meaning spending should not change from year to year, but CMS is proposing a 5% cap on any decrease for the wage index value of a facility, meaning that no decrease can be more than that amount.

About 42% of SNFs would experience decreases in their area wage index value, while about 2% of providers would see a “significant” decrease, or any decrease greater than 5%. About 54% of facilities would see a higher area wage index value, Guin said.

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