Isolating COVID-19 Patients Critical for Nursing Home Safety — But PDPM Hasn’t Caught Up

The infectious nature of COVID-19 makes it imperative that skilled nursing facilities take extra precautions around any new admissions that they bring in, as well as any residents that are returning from a hospital stay.

According to the Centers for Disease Control and Prevention (CDC), the procedure for SNFs is straightforward: Keep any COVID-19-positive patients separate from the rest of the resident population — comprised primarily of elderly people with multiple co-morbidities that make them uniquely vulnerable to the illness.

There are different forms that this can take for SNFs, depending on the scenario they’re facing, according to Bill Goulding, lead consultant at the post-acute firm PACS Consulting — an arm of the Frisco, Texas-based therapy company Aegis Therapies.


A patient could come to a SNF with a positive COVID-19 test and symptoms of COVID-19, or with a positive test without symptoms. SNFs are also taking in patients that are either untested or waiting on test results while having COVID-19 symptoms, or patients without symptoms who have come from an environment where COVID-19 was present.

PACS, which launched January of this year, does an array of consulting work for post-acute facilities, including analyses of the Minimum Data Set (MDS), and it was in studying this information that the consulting firm began to notice one of the many financial challenges COVID-19 has caused for nursing homes: Whether or not they can code a patient as requiring “isolation” under the Patient-Driven Payment Model (PDPM), the reimbursement system for Medicare that took effect in October of last year.

The financial implications of this can be significant. Coding a patient as “infectious isolation” puts the patient in the Extensive Services 1 (ES1) case mix group, one of the highest-paying ones under PDPM, Goulding said. The nursing base rate is essentially $100 per day, and is multiplied by 2.93 because the patient falls under the “infectious isolation” category, roughly translating to about $290 a day for that patient’s nursing care.


“It’s CMS’s [Centers for Medicare and Medicaid Services] way of saying: We understand that single isolation is extremely expensive,” Goulding told Skilled Nursing News on July 31. “It’s one of the most expensive things you can do in a nursing facility.”

PACS has seen a sharp increase in SNFs using the ES1 code ever since the COVID-19 pandemic took hold in the U.S. According to 95,000 MDS assessments by the consulting firm, before COVID-19, SNF providers coded residents for isolation 1% of the time. After the onset of COVID-19, that rose to 8%, according to a July 27 email from Aegis Therapies.

A breakdown by state sent to SNN by Goulding on August 1 shows even steeper increases.

Percentage of MDS Assessments that used the ES1 (Isolation) code
Percentage of MDS Assessments that used the ES1 (Isolation) code
Source: PACS Consulting

“What strikes me is that ALL States except Florida has seen a noticeable increase in usage of the Isolation code, but there is still quite a bit of variability that could be caused partially by the confusion as to how such patients should be coded, as well as the relative incidence of COVID in each area,” Goulding noted in that August 1 e-mail.

The confusion stems from the definition of “isolation,” which is restrictive in a way that puts SNF at risk for a denial of services if they use it, Goulding said on July 31. One of the key components of the definition is that a resident “has to have an an active infection with highly transmissible or significant pathogens that have been acquired by physical contact or airborne or droplet transmission, in other words, confirmed active infection,” Goulding told SNN.

This isn’t an issue for a patient that has a confirmed COVID-19 diagnosis, even if they aren’t showing symptoms, Michael Sciacca, partner and chief operating officer at the Morganville, N.J.-based reimbursement consulting firm Zimmet Healthcare Services Group, told SNN on August 4. Such a patient is a straightforward case of isolation under PDPM.

“Where you get into into the issues, and you get into a very unclear situation, is when you don’t have a positive test, but residents may have been exposed to the hospital that has COVID patients,” he said. “So if a hospital had a fair amount of COVID — which is very common when it really surges in a particular area and in a particular locale — the questions that we’re getting are specific to what to do with residents that do not have a positive test but have possibly been exposed to the virus.”

The CDC is quite clear on the need to keep these patients separate from the general population, he said. But based on the guidelines in the Resident Assessment Instrument (RAI), there would be no active diagnosis that would lead a SNF to believe that resident is infectious, simply an active exposure, Sciacca explained.

COVID-19 complicates the picture by taking a long time to lead to symptoms in an infected person; the window can be as long as 14 days, though five to seven days seems to be more typical.

Zimmet Healthcare Services Group is taking a conservative approach to this issue, and following the RAI guidelines, Sciacca told SNN. In other words, possible exposure to COVID-19 does not constitute an active diagnosis of infection that would warrant isolation coding on the MDS, regardless of whether a facility is keeping such patients in single rooms until they receive a negative COVID-19 test.

Where this creates a challenge for SNFs is the potential for delays in getting test results back for those possibly exposed patients, Mat Robie, vice president of PACS Consulting, told SNN on July 31.

“In some cases, facilities have to wait days upon days to get those results back,” he said. “And so during that timeframe while you’re waiting, what do you do?”

But he also echoed Sciacca’s concern about the need for facilities to be aware of how they code these patients, as the guidelines “are very, very strict.”

In fact, PACS saw several SNFs in the early stages of the pandemic use isolation-related coding and had to tell them to change their practices — and Robie’s concern is that others will do the same. Ultimately, if CMS receives isolation claims coded without positive COVID-19 tests appearing later, the question is whether the agency will try to recoup dollars from the facilities that used these measures.

Goulding stressed that because of the gap in the regulations, facilities have to create some criteria — and ideally set it in writing — on how they will make decisions related to cohorting and coding, whether it pertains to flagging certain symptoms or settings.

Then this has to be noted in documentation, so any decisions related to the patient’s care and the coding of it has backup, he explained.

That makes it all the more important for SNFs to be aware of every risk: medical, legal, and reimbursement-related.

“To meet that hard definition [of isolation] right now, you must have that active infection, and you must be able to prove that in the clinical notes,” Robie stressed. “Otherwise if somebody were to come in and audit a payment related to isolation and you don’t meet the burden of proof, you’re at risk for in essence, potentially upcoding that claim inappropriately.”

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