Managed Care Companies Take Lead on PDPM Denials — But CMS Could Step Up Scrutiny During 2021

Over the course of 2020, as skilled nursing facilities battled the COVID-19 pandemic, the Patient-Driven Payment Model (PDPM) was one of the bright spots for operators, allowing them to secure payments for caring for the clinical needs of patients at a time when those needs grew markedly more complex.

The Centers for Medicare & Medicaid Services (CMS) largely kept PDPM intact when it finalized the 2021 payment rule in July 2020, with only minor adjustments.

And the agency has not been sending out additional documentation requests (ADRs) or denials related to PDPM, Therapy Management Corporation director of denials and appeals Christina Bruenderman said in a February 16 webinar; Therapy Management Corporation (TMC) provides contract therapy and rehabilitation management services.


However, managed care companies are sending out ADRs and denials, and TMC was able to pick apart some trends in those notices. According to the company, these include denials related to:

  • Section GG
  • Parenteral/intravenous feeding
  • Medical diagnoses
  • Malnutrition
  • Speech-Language Pathology (SLP) case mix

Documentation — or crucial gaps in the care record — was the common theme throughout all of these denials, Bruenderman explained. For each of the categories, the denials cited lack of documentation to support the claim for the various conditions reported by the facilities in their billing.

The most frequent PDPM denials have been related to Section GG, where operators are required to document the usual performance of a patient during their first three days of the PDPM stay.


“Section GG was designed to be a collaborative approach, and it can consist of input from nurses, CNAs [certified nursing assistants], therapists, families, MDS [Minimum Data Set], social services, and even the resident,” Bruenderman explained. “Some of the denial notices are stating things such as, ‘Unable to support performed timely,’ ‘requested records do not identify the clinician completing the assessment and completion date,’ as well as ‘documentation provided does not support coding of all Section GG payment items.'”

The reviewers are particularly focused on the documentation that supports Section GG from a collaborative approach — with denials issued without that support, she said. The documentation also needs to support that the information in that section is based on the first three days of the stay.

“One way that you can prevent Section GG denials is to implement a way to document that Section GG was chosen with a collaborative team approach,” Bruenderman explained. “One recommendation is to add a detailed nursing note that outlines who was involved in coding Section GG, the date it was discussed, and that it was based on the residents performance in the first three days. Another option is to add an attestation statement document to the medical record that supports that same information.”

She also gave an overview of some of the potential audit trends for 2021. While CMS was “quiet” on ADRs for PDPM over the course of 2020, there are some critical areas where audits and denials could be a risk.

One of those is the three-day stay waiver from March 2020, which provides Medicare coverage for skilled nursing care without a prior three-day stay in a hospital.

“We do believe that there’s a risk for denials related to the three-day qualifying hospital stay waiver, otherwise known as the 1812(f) waiver,” Bruenderman explained on the webinar. “If you utilize this 1812(f) waiver, it is recommended that disaster relief coding be used on the UB-04, and that remarks such as “declared emergency” or disaster should be utilized.”

Not focusing on accurately complying with the waiver requirements could result in rejected claims.

“If you use this waiver, documentation is crucial to support that extending the patient’s skilled care days is related to the pandemic … If that documentation does not exist, we do suspect that the claim would be denied if reviewed in an audit,” she said.

Companies featured in this article: