Four months into the Patient-Driven Payment Model (PDPM), the first cases of COVID-19 were found in the U.S. – and any chance of the Medicare overhaul going as planned was gone.
The new system for Medicare reimbursement for skilled nursing facilities, which took effect in October 2019, was designed to be budget-neutral, meaning that the Centers for Medicare & Medicaid Services (CMS), would not spend more under PDPM than they had under the old Resource Utilization Group – Version IV system.
But the pandemic scrambled all those calculations overnight. As federal officials mull how to get to budget neutrality for PDPM, one option proposed by CMS is to make sure that excess payments sent to nursing homes last year don’t continue.
Since PDPM implementation, currently available data suggest an unintended increase in payments to SNFs of approximately 5%, or $1.7 billion, in FY2020, CMS wrote in April.
However, new research from Washington, D.C.-based health care consulting firm Avalere Health illustrates that CMS may not be looking at the full picture when making that assessment.
“Assessing the impact of PDPM based on one year … it may be more worthwhile to wait another year,” Melissa Morley, one of the authors of the Avalere study, told SNN. “I think it’s valuable for CMS to consider the broader impact of COVID on the non-COVID population.”
To evaluate how COVID-19 may have impacted payments for SNF care, she and three other researchers at Avalere combed through the Minimum Data Set (MDS) to get a better sense of the profile of SNF patients during the pandemic.
The Minimum Data Set is a standardized clinical screening and assessment tool to determine the health status of all residents in Medicare or Medicaid-certified nursing homes.
The analysis found a higher proportion of patients with respiratory diagnoses throughout FY 2020 relative to FY 2018 and FY 2019.
“We went into this work wanting to know more about the transition to PDPM and the increased payments noted in CMS’s rule,” Morley
said. “What the findings show is that with that increase in case-mix index (CMI) … if that was taken into account, that 5% I think may have come down a little bit more.”
Her biggest takeaway from the research was that COVID’s impact was felt far and wide for SNFs, even more so than CMS may realize.
“This finding suggests that the CMS’s claims-based approach using the COVID-19 diagnosis code may not have adequately captured the COVID-19 case volumes over the course of the pandemic,” the study said.
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