Winning under PDPM

Winning under PDPM

AUGUST 7, 2019

In a few weeks, skilled nursing facilities all over the nation will usher in a new payment model and prepare for a shift in focus. Starting October 1, the Patient-Driven Payment Model (PDPM) will move payment incentives away from billable therapy hours and toward general treatment of residents’ overall health issues. The change is expected to improve payment accuracy and appropriateness by focusing on the resident and their needs, rather than the volume of services provided. The Centers for Medicare & Medicaid Services (CMS) also aims to streamline complicated and costly paperwork requirements for performing mandatory resident assessments by significantly reducing the reporting burden. CMS estimates this will save providers $2 billion over 10 years. With payments hinging on residents’ health characteristics and less focus on assessment requirements, it’s important that facilities perform careful initial assessments of residents and accurately classify them and their needs.

Old vs. new

The current resident classification system assigns residents to a rehabilitation resource utilization group and a nursing resource utilization group, based on information provided on the Minimum Data Set (MDS). Payment is based on the higher-paying group. PDPM classifies residents into five case-mix categories: Physical Therapy (PT), Occupational Therapy (OT), Speech-Language Pathology (SLP), Nursing and Non-Therapy Ancillary (NTA). PDPM also categorizes residents into a clinical category based on the primary reason for their stay in a skilled nursing facility or International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) code. There are 10 clinical categories:

  • Acute Infections
  • Acute Neurologic
  • Cancer
  • Cardiovascular and Coagulations
  • Major Joint Replacement or Spinal Surgery
  • Medical Management
  • Non-Orthopedic Surgery
  • Non-Surgical Orthopedic/Musculoskeletal
  • Orthopedic Surgery (Except Major Joint Replacement or Spinal Surgery)
  • Pulmonary

Classification of residents into physical and occupational therapy groups is determined by their clinical category and their functional status. To classify residents who need SLP therapy in PDPM, CMS requires their clinical category, a swallowing disorder or need for a mechanically-altered diet and a SLP-related comorbidity or cognitive impairment. In addition to improving payment accuracy and reducing the administrative burden on providers, according to CMS, more specific classification of residents and their care needs re-allocates payments to currently underserved beneficiaries without increasing total Medicare payments. This budget neutral approach is a more equitable payment method.

Documentation is key
Although PDPM does not change documentation requirements for payment, CMS has asserted the importance of documenting all aspects of a residents care. In Quality Reporting Program Provider Training documents released in May, CMS stated that, “Given the increased relevance of a greater set of data elements supporting payment under PDPM, providers should ensure that there is strong documentation and support for the care associated with each PDPM component.” The Skilled Nursing Facility Prospective Payment System (SNF PPS) assessment schedule is vastly different under PDPM. There will only be three assessments under PDPM instead of the multiple assessments mandated under the present system. Only the PPS 5-Day and PPS Discharge assessments will be required. A third optional assessment called an Interim Payment Assessment (IPA) was created to permit facilities to report clinical changes that warrant an alteration in payment rates. Thus, thorough assessments coupled with accurate documentation are critical to securing payments. The Compliance Store has developed several resources to support facilities with documentation, including worksheets for classifying residents, a form for preadmission screening and (ICD-10-CM) code mappings. The latest manuals, trainings and information from CMS are also available on the site. To learn more about how The Compliance Store can help your facility transition to PDPM, go to