Importance of Respiratory Evaluation in PDPM Patient Classification

In 2022, the Patient-Driven Payment Model (PDPM) is the hidden part of the national conversation in skilled nursing care: not front-and-center, but impacting everything. Since taking effect in October of 2019, PDPM has reshaped the way care is provided in skilled nursing facilities.

While it no longer drives industry conversation the way it did in its first two years, PDPM remains a critical element of the business of skilled care, with operators growing increasingly sophisticated in their understanding of the model. This sophistication includes the ability to drill down into key sub-sections of a patient’s health to determine PDPM patient classification — such as respiratory evaluation, a focus under the payment model.

A new white paper from Philips reveals how SNF operators can ensure they are accurately navigating respiratory evaluation for success in PDPM.

PDPM basics and the role of respiratory therapy

When PDPM took effect on October 1, 2019, skilled nursing operators had to make a number of adjustments around their day-to-day operations. One was increasing their attention on non-therapy ancillary services, or NTA, which is one of five components that determine reimbursement per patient day. These services account for the patient’s use of medication or medical equipment, items that increase cost of care.

As Centers for Medicare and Medicaid Services (CMS), explained in a fact sheet in February 2019:

“Under PDPM, the NTA comorbidity score is the result of a weighted count of a patient’s comorbidities, rather than using a simple count of comorbidities (which ignores the difference in relative costliness between different comorbidities) or looking at just the most costly comorbidity (which ignores the effect of a patient having multiple comorbidities).”

CMS then identified 50 conditions and services most associated with increases in NTA costs, and assigned each a point value. HIV/AIDS is the highest point value, at eight, while the need for a ventilator or respirator is fourth, at four points.

Considering the increased need for vents and respiratory therapy post-COVID, understanding how to best manage NTA services, specifically respiratory care, is crucial for reimbursement success.

Importance of respiratory evaluation in PDPM patient classification

It’s clear, then, why correctly evaluating a patient for respiratory needs is essential for care outcomes — and, by extension, reimbursement. Under PDPM, every patient is classified into a group for each of the five case-mix components:

• Physical therapy (PT)
• Occupational therapy (OT)
• Speech-language pathology (SLP)
• Nursing
• Non-therapy ancillary (NTA)  

The criteria used to classify each patient will ultimately determine PDPM payment. Patients are then assigned to a “group” for each of the five case-mix-adjusted components that PDPM uses. The areas where respiratory conditions and need for treatment have the most impact are the following, based on the documentation provided on the MDS 3.0 evaluation:

• Non-therapy ancillary (NTA)
• Nursing
• Speech-language pathology (SLP)

NTA classification is based on the presence of certain comorbidities, with the comorbidity score a weighted count of the comorbidities present. The patient’s need for a ventilator, as well as other respiratory-related conditions, are scored in the MDS 3.0 completion process. The NTA score range maps to a NTA case mix group and a NTA case mix index, all of which impacts reimbursement.

Impact of respiratory therapy in the NTA payment equation

The importance of respiratory therapy and other NTAs in reimbursement calculation can be seen in a review of the payment calculation within the NTA category. As noted above, each NTA has a point value. When the points for a patient are added together, the total ranges from zero (no NTAs) to 12+, where rates are maxed. The adjusted NTA per diem rate specific to each patient is then multiplied by three for the first three days of that patient’s stay.

For example, if the patient had a score of five on the NTA assessment and also required a ventilator (four points), the NTA per diem rate is $108.53 compared to the $206.45 if they had nine NTA points. The patient would actually have a score higher than four as a patient on a ventilator would require other services that would increase the total score.

Much of this might feel like “inside baseball,” but with PDPM, NTAs and respiratory therapy, the devil is in the details.

This article is sponsored by Philips. For a complete breakdown of the respiratory therapy impact on PDPM reimbursement, visit usa.philips.com.