Skip to Main Content

insightsarticles

Senior living
COVID-
19 financial resources guide

06.12.20

Our senior living and long-term care professionals have compiled this guide to financial resources for senior living providers, segregated by federal and state programs.

In this guide, you will receive a breakdown of the critical components of each program, related compliance requirements, payment and accounting considerations, and the provider type for which the program is available.

Included on the guide is a publication date. Please check back regularly for updates.

READ THE GUIDE NOW

We're here to help.
If you have any questions, please contact a member of our senior living consulting team.

Related Professionals

Read this if your senior living facility is receiving Medicare payments.

A year ago the senior living industry was challenged with the transition to the Patient-Driven Payment Model (PDPM). In the months leading up to the implementation of PDPM providers prepared for new regulations, conducted employee training, and forecasted financial performance. By all accounts the implementation of PDPM went off with very few glitches. 

That all changed in the beginning of 2020 when the coronavirus (COVID-19) pandemic upended the industry and Medicare occupancy levels diminished. COVID-19 overturned the way providers were providing care at their facilities. Providers have seen a decrease in utilization of therapy services and an increase in medical management cases. Providers anticipated delivering more concurrent physical therapy, which has become impossible with COVID-19. We understand how demanding COVID-19 related change management has been for skilled nursing facilities, and want to help you re-focus your attention on the critical tasks and procedures driving your Medicare reimbursement.

New federal fiscal year, new rates

The Medicare Final Rule for fiscal year 2021 did not contain any major policy changes to PDPM but did contain routine updates to coding and Medicare billing rates effective October 1, 2020. After changing Medicare billing rates, you should test your system by carefully reviewing a remittance advice and the accounts receivable report for October service dates. Look for any balances, big or small, to help ensure billing rates and contractuals are correct for all payers following Medicare rules. Note:

  • Small balances may indicate errors in system configuration, such as PDPM rates, sequestration, or value-based purchasing adjustment.
  • Larger balances may indicate a claim missed in the facility's triple-check meeting and billed at an incorrect PDPM rate. View the FFY2021 Medicare Rate Calculator.
  • Providers should review ICD-10 mappings on an annual basis for new and discontinued ICD-10 codes. 

Medicare Advantage plan enrollment is growing. What does it mean for your facility?

With the continuing growth of Medicare Managed Care/Advantage plans, it is important to review your facility’s contracts. 

  • Most Medicare Advantage programs have adopted PDPM, but have differing requirements for pre-authorizations and payment rates, so be sure you understand how each of these contracts reimburses your facility
  • If there are new Medicare Advantage plans in your area, evaluate the need to negotiate a contract to admit patients covered by the new plan. 
  • Update the list of plans your facility contracts with:
     
    • Carefully review contract rates and request rate changes if the payor does not follow the Medicare fee schedule. 
    • To avoid denied claims, update contact information and understand preauthorization requirements and any patient status updates. Distribute the updated list to your admissions and case management teams.

Check on your MDS coordinator

  • With the COVID-related shift in responsibilities, we see an increase in MDS position turnover. We recommend reviewing or developing a backup for your MDS coordinator, as completion of MDS is critical for billing and regulatory compliance. 
  • If your facility has limited resources for backup, evaluate sub-contracting options or reach out to your state’s Health Care Association for available resources. 

Update your consolidated billing resources

Consolidated billing errors could result in significant reductions of your bottom line. CMS updates guidance on consolidated billing regularly. We recommend checking the CMS listing and ensuring your admissions, clinical, and medical records teams use up-to-date information for admission decisions and coordination of care with external health care providers. Get more information.

COVID-19 impact

  • CMS provided a number of flexibilities to help facilities with COVID-related care. Please note, a number of these provisions are temporary, and are only effective during the state of emergency. We recommend at least a monthly review of regulatory guidance to help ensure compliance. Get more information.
  • While the COVID-19 diagnosis and codes were not specifically incorporated into PDPM in the 2021 final rule, be sure to appropriately code isolation stays in the nursing component, and document additional costs of testing, PPE, and labor, as well as support of skilled status need to protect against audit risk.

Have questions? Our Senior Living revenue cycle team is here to help. 

Article
Patient Driven Payment Model―A year later

Over the last few weeks, CMS and the President have enacted legislation and released guidance to assist the senior living industry in coping with the impact of COVID-19. We recognize the elderly residents of our country are the most vulnerable population and your days are filled caring for your population’s needs and health. Our senior living professionals have written this article to highlight new regulations impacting the industry and offer practical tips for guarding your facility's financial health through the COVID-19 outbreak.

Amidst rapid hourly changes in contending with the coronavirus and its far-reaching impacts, the way you run your facility has changed. Along with this change comes an increase in expenditures. To ensure that your facility is getting much needed financial relief and being properly reimbursed for the full impact of COVID-19, we recommend tracking your expenditures related to the coronavirus. Expenditures related to COVID-19 go beyond the cost of additional Personal Protective Equipment (PPE), they will likely include additional direct care staffing, along with housekeeping, dietary and laundry staffing, and supplies needed to maintain the heightened level of hygiene required to combat the spread of COVID-19 in your facility.

CMS issues waiver of 3-Day Stay and Spell of Illness
On March 14, Centers for Medicare and Medicaid Services (CMS) issued two waivers to aid skilled nursing facilities in addressing the national COVID-19 outbreak. CMS is waiving both the 3-Day Stay and Spell of Illness requirements. Read the COVID-19 Emergency Declaration.

Key provisions to consider with regard to 3-midnight qualifying stay requirement:

  • The exception applies to traditional Medicare coverage only (Medicare Advantage plans may or may not follow this exception);
  • It is in effect as of March 1, 2020, and will only be in effect while public health emergency is declared;
  • Applies only to beneficiaries affected by the emergency or who experience dislocations;
  • Providers have to document medical necessity and clinical reasons for not meeting 3-midnight requirement, understanding that the intent of this provision is to free up hospital beds and reduce potential risk of exposure to the patient;
  • Providers are to use condition code “DR” on the claims. 

Read additional AHCA clarifications and guidance regarding the waivers of 3-Day Stay and Spell of Illness requirements.

MDS completion and submission waivers
CMS is waiving 42 CFR 483.20 to provide relief to SNFs on the timeframe requirements for Minimum Data Set (MDS) assessments and transmissions. CMS has yet to issue technical guidance on how to implement.

On March 22, 2020, CMS announced temporary administrative burden relief related to Quality Reporting which includes certain SNF-specific changes:

  • Quality Reporting Program (QRP) April/May deadline for 10/1/19 - 12/31/19 data submission is optional for those facilities that have not yet submitted data;
  • Facilities do not need to submit 1/1/20 - 6/30/20 data for purposes of compliance with QRP;
  • CMS will not use any data for the first 2 quarters of 2020, 1/1/20 - 6/30/20, in its calculations;
  • Claims for 1/1/20 - 6/30/20 will be excluded from calculation of all-cause readmission measures that result in value-based purchasing adjustments.

Read the full CMS press release.

Families First Coronavirus Response Act (FFCRA)
On March 18, 2020, the President signed into law, H.R. 6201, the Families First Coronavirus Response Act. The legislation eliminates patient cost-sharing for COVID-19 testing and related services, establishes an emergency paid leave program, and expands unemployment and nutrition assistance. Moreover, the bill provides a temporary 6.2% increase in Federal Medical Assistance Percentages (FMAP) for each calendar quarter occurring during an emergency period.

FMAP is the federal portion of funds for state Medicaid programs. With this temporary increase states can use the increased federal funds for any portion of the state Medicaid program. Due to significant increases in unemployment from business closures, the increase may be used to provide Medicaid coverage for the newly unemployed and uninsured. This would result in less funding for provider rate increases to cover COVID-19 related costs. However, on March 21, 2020, the federal government also announced that it is considering a special enrollment period for Affordable Care Act Health Insurance Exchange coverage. A special enrollment period would offer lower cost coverage to individuals with reduced incomes and could influence how the FMAP increase will be used, possibly resulting in more being allocated to covering provider rates. As of today, it is still unclear how states will use the increased funds.

A table released by AHCA on March 14, 2020, provides estimates of the increase in Federal Medicaid funding from FMAP assuming the increase is in effect January through December 2020. 

There are two provisions of the FFCRA that deal with paid leave provisions for employees. BerryDunn's employee benefits consultants provide insight and clarity on the paid leave provisions for employees.

Prioritization of survey activities
CMS released guidance prioritizing and suspending most federal and state survey agency (SSA) surveys, and delaying revisit surveys, for the next three weeks beginning on March 20, 2020, for all nursing homes. Standard surveys and non-Immediate Jeopardy (IJ) related onsite surveys will be suspended for three weeks. Complaints and facility-reported incidents that are considered at the IJ level will be conducted during this time. Facilities are encouraged to use the CDC developed COVID-19 Focused Survey for Nursing Homes. Get additional CMS guidance

Coronavirus Aid, Relief, and Economic Security (CARES) Act
On March 25, 2020, the US Senate unanimously approved the $2 trillion CARES Act (The “Act”). It is anticipated that the House of Representatives will vote on the Act today, March 27, 2020. The White House has signaled that it will sign the measure as approved by the Senate. 

Major provisions of the proposed legislation include:

  • The Medicare 2% sequester will be temporarily suspended starting in late May 2020. 
  • $150 million for modifications of existing hospital, nursing home, and “domiciliary facilities” undertaken as part of COVID-19 response.
  • $65 million for housing for the elderly and people with disabilities for rental assistance, service coordinators and support services for the more than 114,000 affordable households for the elderly, and more than 30,000 affordable households for low-income people with disabilities.
  • $2.8 million to provide staff treating veterans living at Armed Forces Retirement Homes with the personal protective equipment they need. The funding provides this and other necessary equipment and staffing support to help minimize the spread of the coronavirus among residents.
  • $955 million for the Administration for Community Living to support nutrition programs, home- and community-based services, support for family caregivers, and expand oversight and protections for seniors and individuals with disabilities.
  • $200 million for the Centers for Medicare & Medicaid Services to assist nursing homes with infection control and support states’ efforts to prevent the spread of the coronavirus in nursing homes.

Practical tips for monitoring and maintaining your organization’s financial health 
As we navigate these next few months, facilities will face challenges to maintain the health and safety of their residents and staff as well as the financial health of the organization. Some things you should be doing now:

  • Calculate your working capital and cash position weekly or bi-weekly.
  • Perform cash flow projections for the next few months. Be sure the timing of your cash receipts will cover payroll and supplies expenditures each week. 
  • Contact your lenders to obtain or increase available working capital lines of credit.
  • Ascertain if you can release any investment balances if needed.


We are here to help
Please contact the BerryDunn senior living team if you have any questions, or would like to discuss your specific situation.

Article
Senior living organizations and COVID-19

In our consulting work with Skilled Nursing Facilities (SNFs) we have identified some early trends in PDPM implementation we would like to share. PDPM has been in place for a little over three months and while there were some hiccups in the first month, claims appear to be processing normally. SNFs are reporting that PDPM has been positive for their facilities. Many are reporting increases in Medicare revenues and feel PDPM has also been positive for the industry. However, it will still be a few months until we can really measure the financial and operational impacts of PDPM. As we continue to evaluate the early results, here are several lessons learned thus far:

  1. The good news is we were ready! 
    There were predictions that SNFs were not going to be prepared and smaller providers were going to go out of business because they could not adapt to PDPM. This has not been the case. Providers report they have been able to successfully bill under PDPM and most providers are reporting increased reimbursement under PDPM. Initial PDPM news is positive for the industry, but to be successful providers must continue to adapt.
  2. There still needs to be more education on the Minimum Data Set (MDS) to optimize reimbursement.
    SNFs are unsure how sections of the MDS work together under PDPM. MDS nurses need more training on what section to enter diagnosis codes and they are unsure when a diagnosis or a check box will generate the PDPM score. Diagnoses that impact Speech Language Pathology (SLP) and any diagnoses that impact Non-Therapy Ancillaries (NTAs) should be recorded on MDS Section I8000. Some diagnoses entered in Section I8000 also have check boxes in Section I that must be checked in order to be properly reimbursed.
  3. There were some missed reimbursement opportunities.
    There are several factors contributing to missed reimbursement opportunities, including delays in receiving information from physicians and other departments. Facilities need to build better relationships with physicians and provider networks to improve communication that focuses on clinical conditions and co-morbidities of the resident. Additionally, procedures need to be in place to gather clinical information within the first three days in order to get all relevant information on the five-day MDS.
  4. Diagnosis should be supported by patient care plan.
    To be in compliance with Medicare regulations and prevent takebacks on audit, diagnoses must be supported by the resident care plan. For example, if a diagnosis code for malnutrition is entered in Section I, then the resident care plan and medical records need to support the diagnosis. The care plan should document information, such as specific risk factors, lab results, and weight tracking results. Reimbursement and treatment decisions need to have a demonstrable benefit to the resident and must be supported by the resident care plan.
  5. Providers need to evaluate how they provide therapy.
    Before making significant changes to their therapy programs, facilities should analyze their therapy utilization and outcomes under PDPM, as compared to outcomes and utilization under RUGS IV. This ensures you are providing high-quality care at the lowest cost. Things to consider are per patient day utilization ratios, cost per minute under PDPM vs RUGS IV, productivity standards under PDPM, and outcomes. SNFs that are decreasing their therapy minutes should be sure they still have good quality outcomes. 
  6. The bad news? Rate adjustments may be coming sooner than expected.
    PDPM was intended to be budget neutral. Based on early results, this does not seem to be the case. More SNFs are reporting they are winners rather than losers under PDPM. The belief is if PDPM continues to track with early results there will be a rate adjustment that could come as early as mid-year. However, it is more likely that CMS will make an adjustment to weights and rates as part of the 2020 rulemaking process.

As we move further into 2020, you can expect to see more data on PDPM claims and reimbursements, which will help you make operational and financial decisions about your facility. In the meantime, you should keep focusing on patient care and achieving quality outcomes while thinking about what you can do now to adapt to be successful under PDPM.

Article
Patient Driven Payment Model (PDPM) implementation lessons learned

Read this if you are a Nursing Home Administrator, Admissions Coordinator, MDS Nurse, Nursing Home Owner, Business Office Manager, Case Manager, Nursing Home CEO, CFO, or COO.

Patient Driven Payment Model (PDPM) implementation is less than three months away. Is your facility ready for admissions under PDPM? The way you think about admissions and the admission process will change under PDPM. Some highlights:

  • The resident’s clinical characteristics will now be the determinant of payment rather than therapy provided.
  • Facilities that admit medically complex residents—those who need higher levels of potentially expensive care, including high-cost medications, ventilator care, and care for residents with HIV/AIDS—will receive reimbursement that more closely reflects those higher costs.
  • PDPM will eliminate the 14-day, 30-day, 60-day and 90-day assessments and will only require a five-day and discharge assessment. 
  • The five-day assessment will drive payment for the entire resident stay unless there is change in the resident’s clinical characteristics. 

With the elimination of the five scheduled assessments under PDPM, facilities will save time spent on assessments; however, PDPM will require a higher degree of accuracy on the Day Five assessment. For proper reimbursement, your staff will have to gather all relevant clinical information on the resident in a shorter period of time. A strong admissions team and processes will help you achieve financial success under PDPM. 

Screening residents for admission will also become more critical for appropriate reimbursement. Under RUGS-IV, most facilities relied only on their admissions coordinator to handle admissions. Under PDPM, facilities are going to have to involve more team members in the pre-admission process to ensure proper and thorough screening of residents. 

Since PDPM focuses on all the resident’s clinical characteristics, you will need pre-admission input from many team members, including but not limited to physicians, nurses, therapy providers, and case management. You will need to assess many other elements up front―if you miss something in the screening, you won’t receive adequate reimbursement. 

With payment tied not only to the residents' primary reasons for being in the facility, but also the comorbidities that affect their health, you need to know more about potential residents prior to admission. The admissions team will need to get a comprehensive background on each resident―including all comorbidities, recent surgical history, and other clinical characteristics and services that determine a resident’s case-mix.

For example, in some cases, two diagnoses, such as aftercare for major joint surgery and an infectious complication, may compete for the primary diagnosis. These two diagnoses would place the resident in different clinical categories and would result in different rates of reimbursement. Working as a team, your staff will have to determine which of these diagnoses most accurately reflects the characteristics of the resident, the services needed by that resident, and the resources that he or she requires.

To emphasize again, under the new PDPM assessment schedule, facilities cannot make changes to resident clinical characteristics on the five-day assessment unless a resident has a significant change in status and the facility performs an interim payment assessment. You really only have one shot at getting it right!

Here are some actions you can take now to strengthen your admissions process:

Standardize practices―Examine inconsistent and/or manual practices within the revenue cycle that may cause delays in gathering documentation and, ultimately, delay billing. Policies and procedures should include items such as team members and responsibilities, pre-admission screening procedures, protocols for communicating with physicians and the admitting hospital, and procedures for capturing and storing supporting documentation. This can help capture all information needed for proper reimbursement.

Review changes to the Minimum Data Set (MDS)―The entire admissions team needs to understand the changes to the MDS so that they capture all the required resident information. There are nearly 40 new MDS items that directly influence a resident’s clinical classification and payment rates. The most significant of these?

  • I0020B―To report the ICD-10-CM primary diagnosis code representing the main reason for Skilled Nursing Facility (SNF) admission
  • J2100-J5000―New patient surgical history items that affect the PDPM physical and occupational therapy and speech-language pathology components
  • I8000―To report comorbidities that affect non-therapy ancillaries
  • O425A1-O0425C5―To capture discharge information on therapy delivery over the course of the resident's entire Part A stay, including use of group and concurrent therapy.

Educate staff―Train your staff on the new processes and tools, as these processes directly impact daily job functions. In addition, staff should have an understanding of the functions of the entire revenue cycle so they can see how their functions affect the overall reimbursement of the facility.

Review and monitor―To better prepare for PDPM, you should review your resident charts to understand what information you are currently documenting and know what additional information you will need to gather upon admission. Even though you are not yet billing under PDPM, you can start gathering and documenting that additional information. Review your facility's utilization review and triple check processes. You should have a cross-functional utilization review team that includes a physician or mid-level practitioner to ensure comprehensive reviews. Once you begin documenting, under PDPM you will need to audit MDS to be sure they are accurate and supported by medical documentation.

You will only have until Day Eight of a resident stay to capture and document all the resident's clinical characteristics that drive payment for the entire stay. It is more important than ever to have a clearly defined, well-executed plan for getting the right information to the right people as soon as possible.

Read more
You can read Part One of this series here. Part Three is coming soon.

Get ready with our PDPM Checklist!

Download our helpful PDPM checklist and see what you need to do. 

Article
PDPM is coming: Is your admissions team ready?

On October 1, 2019, the Medicare Skilled Nursing Facility (SNF) payment system will transition from RUGS-IV to the Patient Driven Payment Model. This payment model is a major change from the way SNFs are currently reimbursed. Under PDPM, International Classification of Disease, Tenth Edition (ICD-10) diagnosis codes and other patient clinical characteristics, such as the patient’s activities of daily living (ADL) and recent surgeries, will be used as the basis for patient classification and reimbursement.

Resident days up to September 30 will be paid under RUGS–IV and resident days from October 1 forward will be paid under PDPM. This includes patients admitted prior to September 30. There will be no transition period. The change to PDPM represents the most significant change to Medicare A SNF PPS reimbursement since its implementation in 1998. To ensure a smooth transition, prevent denials, and avoid resulting cash flow disruptions, your revenue cycle team needs to be prepared for PDPM. This article outlines steps your facility can take to prepare for PDPM.

Know your current revenue cycle performance

In order to know how you are performing under PDPM, you need to know your current revenue cycle performance. Are there current processes delaying the completion of the Minimum Data Set (MDS)? What is your current case mix? How long does it take the facility to close the month and generate bills? If you have inefficiencies in your workflow and processes, now is the time to fix them. Are there open lines of communication between financial and clinical operations? Financial and clinical must work together to make PDPM work for the facility’s long-term sustainability.

Facilities should be benchmarking their key revenue cycle indicators including, but not limited to, accounts receivable aging comparisons, days in accounts receivables, and collections as a percentage of revenues. Benchmarking can help a facility detect issues early on and resolve them before they become a bigger problem.

Providers will need to communicate with IT providers to be sure they configure electronic health record systems and financial systems for compliance with PDPM. MDS software must be robust enough to help MDS coordinators manage the new process or else facility reimbursement will be affected.

Understand how ICD-10 coding impacts reimbursement under PDPM

Do you know how diagnoses are currently captured on your facility’s MDS? Most facilities are not tracking or monitoring ICD-10 diagnosis codes, as the majority of diagnoses don’t impact quality measures or reimbursement. The implementation of PDPM will require the use of ICD-10 diagnosis codes, which are more detailed and call for accurate documentation. For SNF providers, this means the old ways of documenting resident assessments on the MDS won’t work under the new model.

One of the most important changes under PDPM is that ICD-10 diagnoses will be the key drivers for reimbursement. ICD-10 diagnosis codes will be used to place a resident into one of 10 PDPM clinical categories, that will determine the payment components for physical therapy (PT), occupational therapy (OT), speech (SLP), and skilled nursing services, as well as non-therapy ancillaries (NTA).

How can your facility prepare for ICD-10 diagnosis coding?

  • Determine the diagnoses codes your facility uses most frequently.
  • Compare the codes you most frequently use to the CMS PDPM Clinical Category Mapping
  • If codes map to “Return to Provider” you need to review the patient record to find a more specific primary diagnosis
  • Make sure you capture the resident’s comorbidities on I8000 to ensure appropriate payment for Non-Therapy Ancillaries (NTA).
  • Aftercare codes will be the primary diagnosis if that is the primary reason for the admission.

Preparing for ICD-10 coding requires a coordinated care team. Communicate with anyone who contributes to the diagnosis documentation, including the physician, medical director, PT/OT/SLP, and other specialty care professionals such as wound specialists or dietitians to understand why the resident is there. Identifying the reason the resident is there and assigning the correct diagnosis code will help a facility to be successful with PDPM.

Review the changes being made to the Minimum Data Set (MDS)

In early January, CMS issued a draft version of the MDS 3.0. The draft indicates that there are more than 80 items will be added, deleted, or changed for PDPM implementation. There are 40 new items that will impact reimbursement rates. These changes fall into three categories:

  1. Streamlined assessment policies 
  2. New PDPM assessment item sets
  3.  Additions to MDS items

The MDS assessments will be more streamlined under PDPM. There are only two required assessments: the five-day assessment and the discharge assessment. The five-day assessment must be completed between days one and eight and will be effective for the entire length of stay unless an optional assessment is performed. The 14-day, 30-day, 60-day and 90-day assessments have been discontinued. The discharge assessment will not impact reimbursement―however, this is where therapy will be reported. Facilities also have the option to perform an interim payment assessment if the patient’s clinical characteristics change. This assessment must be completed within 14 days of the change in characteristics and can affect reimbursement.

The MDS has two new item sets: 1) Interim Payment Assessment (IPA), used for optional assessment if a patient’s characteristics change; and 2) Optional State Assessment (OSA), which will be used by states where RUGS-IV is the basis for Medicaid payments. The IPA should only be used if a patient’s clinical characteristics are not expected to change in the short term.

Significant changes to MDS items are in the following sections:

  1. Section I: SNF Primary Diagnosis – Item I0020B will allow providers to report, using an ICD-10 diagnosis code, the patient's primary SNF diagnosis. This item will ask, “What is the primary reason the patient is being admitted into the SNF?”
  2. Section J: Patient Surgical History – To capture information that may be relevant to classifying a resident in a PDPM clinical category, J1000 – J5000 identifies major surgeries from the most recent hospital stay.
  3. Section O: Discharge Therapy Items – Items 0425A1-O0425C5 will be added to Section O to document therapy delivery information. Therapy delivery will only be reported on the discharge MDS and must include information by each discipline, mode of therapy, and minutes received by the patient. Group and concurrent therapy cannot exceed 25% of total therapy.
  4. Section GG: Interim Performance – This section is the basis for the resident’s functional analysis. Section GG is more standardized and has more comprehensive measures of functional status. Providers need to be sure to complete Section GG in its entirety as missing responses will receive zero points for the functional score calculation. Section GG is taking on an increased importance under PDPM, as CMS’s goal for this section is to standardize assessment items across payment settings.

Over the years, the MDS has primarily been utilized as an assessment tool to drive the plan of care with little impact to reimbursement. With implementation of PDPM, and the shift from therapy-driven reimbursement to clinical characteristics as the basis for reimbursement, the MDS will be vital to obtaining proper reimbursement. You may need to revise the systems you currently have in place to make sure that the information critical to reimbursement is recorded accurately on the five-day assessment. Missing an item on the five-day MDS will impact reimbursement for the entire resident stay.

Skilled Nursing Facilities will need internal processes, workflows, and staff training in place well before October 1, 2019, in order to be successful under PDPM. Preparation for PDPM is key and it will take teamwork from the entire facility. Focusing on each of the areas outlined above—even if it is just to confirm that you’ve addressed the issue—will put you in good shape to meet the looming deadline. Without a doubt, there will be things that arise at the last minute or processes that don’t work as planned. Don’t panic. We can help you address issues and problems or work with you to create a new workflow process. Just give us a call.

Get ready with our PDPM Checklist!

Download our helpful PDPM checklist and see what you need to do. 

Article
Is your revenue cycle team ready for Medicare's Patient Driven Payment Model?

Effective October 1, 2019, Skilled Nursing Facilities (SNF)s will be reimbursed under a new payment system.

The existing case mix classification group, Resource Utilization Group IV (RUG- IV) will be replaced with a new case mix model, the Patient Driven Payment Model (PDPM). CMS has indicated factors leading to the change in the payment system include over utilization of therapy and incentives for longer lengths of stay.

Background and overview
PDPM is one of the initiatives resulting from the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act). The IMPACT Act requires standardized patient assessment data across post-acute care (PAC) settings to enable:

  • Comparisons of quality and information exchange across post-acute settings
  • Improvement of Medicare beneficiary outcomes through shared-decision making, care coordination, and enhanced discharge planning
  • Non-therapy ancillaries (NTA) payment is determined by a base rate and separate CMI. NTA is a variable payment, paid at 300% for the first three days, and then reduced to 100% after day four.
  • Payments based on patient characteristics

PDPM will be a significant shift in how SNFs are paid, and facilities need to start preparing for the change. PDPM:

  • Removes therapy minutes as a determinant of payment and creates a new model where payment is linked to differences in clinical characteristics
  • Creates a separate payment component for non-therapy ancillaries (NTA), using resident characteristics to predict utilization of these services
  • Focuses on clinically relevant factors and ICD-10 diagnosis codes to determine payment

Value Base Purchasing (VBP), SNF Quality Reporting Program and PDPM are all initiatives advancing the IMPACT act and moving payment from fee for service to value. SNFs have been reporting quality measures since May 2017, and are subject to a 2% (VBP) payment adjustment if they don’t submit the quality measures.

In October of 2018, SNFs began receiving a payment adjustment based on hospital readmissions under the SNF Quality Reporting Program. The implementation of PDPM will be one more step towards moving reimbursement for care from volume to value.

PDPM shifts payment to residents with complex clinical needs, and targets the resources towards beneficiaries with diverse care needs. Its goal is to aim care at the more medically complex patients. There are six components in the daily rate:

  • Physical therapy
  • Occupational therapy
  • Speech therapy
  • Nursing
  • Non-therapy ancillary services
  • Non-case mix

The components are all taken from the five-day minimum data set (MDS), and assigned a daily rate based on that components case mix index (CMI). Therapy is broken out into the three disciplines (physical, speech and occupational), with each having its own base rate and case mix index:

  • Therapy payment is a variable payment paid at 100% for the first 20 days, and then reduced by 2% every seven days. 
  • Nursing services payment is a base rate with a separate case mix, with no variable payment.
  • Non-therapy ancillaries (NTA) payment is determined by a base rate and separate CMI. NTA is a variable payment, paid at 300% for the first three days, and then reduced to 100% after day four.

Under PDPM, payment is based on each aspect of the resident’s care. Payment is still a per diem payment—however, it is adjusted to reflect varying costs throughout the resident’s stay.

The admissions process is going to be critical to ensure appropriate payment. Accurate coding of patient conditions must occur at the time of admission, and while the information coming from the hospital will be helpful, facilities cannot rely on hospital information when coding the MDS. Diagnosis and accurate coding are critical to assigning the appropriate case mix group to make certain there is adequate payment for the stay.

Patients over Paperwork
PDPM emphasizes patients over paperwork, as it eliminates the current (MDS) schedule. The new model only requires an assessment at five days and a final discharge assessment.

Facilities can perform an optional interim payment assessment within 14 days of a change in the resident’s characteristics. An interim payment assessment will not reset the NTA and therapy payments to day one. CMS is still working on guidance as to how you will need to report this.

If a patient leaves the facility and is away from the facility for less than three days, then the stay is considered the same admission. If the resident is away for more than three days, the admission is considered a new admission, and the NTAs and therapy payments are returned to day one payment.

The MDS has been an important tool in driving resident care over that last 30 years, and is relied upon for reimbursement and quality data. With the implementation of PDPM, the MDS will become even more important to reimbursement. As payment shifts from therapy focus to clinical characteristics focus, there will need to be more detailed documentation to support the medical condition. Under RUGs, there are approximately 20 items on the MDS which impact reimbursement?under PDPM, there will be approximately 160 items which impact reimbursement.

The implementation of PDPM will increase the importance of the role of the MDS coordinator. Facilities need to invest in a strong MDS coordinator to ensure appropriate assessment and documentation that support medical conditions—which drive payment.

While therapy minutes will no longer drive payment under PDPM, you still have to monitor them. Therapy will be reported on the final discharge MDS, separately by discipline. MDS will report therapy minutes by one-to-one sessions, concurrent, and group therapy. Total therapy delivered concurrently and/or in group sessions cannot be more than 25% of total therapy time.

Given the depth and breadth of the changes to the payment system, facilities need to begin preparing for the change now. What can you do in preparation for PDPM?

Educate yourself so you can plan for the transition to PDPM:

  • Know what is driving your current payments
  • Assess the skills of your staff and know your gaps
  • Attend education sessions
  • Train or retrain MDS nurse and billers on ICD-10 and the MDS
  • If you don’t already have care teams, form care teams
  • Determine who with in the facility should be on care teams

Align resources to be sure you are ready to bill on October 1, 2019:

  • Determine your hiring and training needs
  • Look at therapy contracts, how do they align with new payment model
  • Talk to software vendors to be sure they will be ready for the new MDS and ICD-10

For more information or assistance with PDPM contact Lisa Trundy-Whitten.

Article
New Patient Driven Payment Model from CMS―What to expect and what to do