Provider Quick Facts:
The Proposed Patient Driven Payment Model (PDPM)
CMS proposed rule released April 27, 2018 outlines the replacement for the current RUGS IV Prospective Payment System (PPS) effective October 1, 2019. The Proposed Patient Driven Payment Model (PDPM) shifts emphasis for reimbursement away from time spent in therapy and toward a patient characteristic driven payment system. PDPM is CMS’ answer to extensive stake holder comments and concerns regarding RCS-1, and has generally been received favorably by SNF providers.
PDPM Basics:
  • PDPM is a revision of PPS made under existing statutory authority, and is meant to be budget neutral in terms of the total aggregate payment to SNFs.  The proposed payment model was derived based on MDS, STRIVE, cost report and claims data and targets MedPac and other findings that therapy minutes have had too great an impact on SNF reimbursement under RUGS IV with >90% of SNF payments made for rehab RUGs in recent years.
  • PDPM reduces the number of classifications from the previously proposed RCS-1 plan by 80%.
  • Two primary factors impact classification:
  1. Base rate for each of 6 components (PT, OT, SLP, Nursing, Non-Therapy Ancillary (NTA) and non-case mix) 
  2. CMI factor (PT, OT, SLP, Nursing, NTA)
  • An adjustment factor applies which slightly reduces payment progressively after day 20 for PT and OT and increases payment for NTA days 1-3.
  • Resident group classification per diem amounts for each component group are added together for a total per diem rate as shown in the graphic below.
  • Nursing is split into Nursing and NTA (change from RUGs IV).
  • Therapy is split into PT, OT, and SLP (change from RUGS IV).
There are two patient characteristics used to determine the PT and OT case-mix classification; the Clinical Category and Function Score from section GG.
In determining the SLP case-mix classification, the clinical category is determined based on presence of an acute neurologic condition, SLP related comorbidities, or cognitive impairment. The second characteristic is the presence of a swallowing disorder or mechanically altered diet.
Other highlights:
  • Therapy time is required to be submitted as part of the discharge MDS assessment. This data will be used to analyze levels of therapy furnished after PDPM is initiated in response to concerns that providers may be incentivized to limit access despite clinical needs based on the fact that the therapy payment component is included in the per diem whether or not those therapy services are furnished.
  • While PDPM is meant to be budget neutral, further review of the proposed rule and technical report finds that the dollar amounts do not reflect the wording in the proposed rule that funds are re-allocated and not reduced; a footnote in Acumen’s technical report states the therapy non-case mix component is not included in the calculation. This results in a reduction of approximately $18 per day. Industry advocates are addressing this discrepancy in their comments to CMS. Click here to look up the estimated impact of the PDPM for each SNF nationwide in this provider-specific analysis ZIP file.
Important MDS Updates:
  • The 5 Day MDS and discharge MDS will be the only required scheduled assessments. The 5 Day MDS establishes the payment category for the entire Medicare stay unless criteria for completing an Interim Payment Assessment (IPA) are met to change or reclassify the resident after the initial 5 day.
  • IPA criteria include:
  1. Change in resident classification in at least one of the 1st tier classification criteria for any of the components (e.g. clinical category for PT/OT, ST, Nsg)
  2. Changes are such that there is no expectation to return to the original clinical status within 14 days
  • ARD of the assessment is no later than 14 days after the change in the first tier classification is identified
  • If missed, the default rate would apply
  • The MDS is proposed to have 18 additional items added to the PPS Discharge MDS to capture therapy totals provided during the stay.
  • Section GG of the MDS will be used in lieu of section G to assess the functional component for PT & OT payment classification and nursing case-mix classification. 6 areas are scored and totaled for the functional measure: eating, oral hygiene, toileting, sit-to-lying, lying-to-sitting on bed, sit-to-stand, chair/bed-to-chair, toileting transfer, walk 50 feet with 2 turns, and walk 150 feet (see table 25 below).
  • An Interrupted Stay Policy is also proposed outlining limitations in “resetting” the Variable Per Diem Adjustment Factors following a break in the stay. If the resident returns to the facility within 3 midnights, the resident’s PPS calendar will resume with the next PPS day. If the resident returns within this timeframe, no new 5 Day MDS would be needed and the Variable Per Diem Adjustment Factor would not be reset, meaning the payment schedule would continue on the next PPS day including the Variable Per Diem Adjustment Factor. If the resident returns on day 4 or later, or is sent to a different facility, the Variable Per Diem Adjustment Factor would reset to day 1 and a new 5 Day MDS Assessment would be required.
  • Grace days will be incorporated into the ARD options (e.g. 5-day ARD option day 1-8).
  • PDPM would use ICD-10 codes to classify patients into 1 of 10 clinical categories as the primary driver of payment. I-8000 and possibly I-20 will be used to assign the primary clinical category. Click here for a classification worksheet provided by CMS.
  • Nursing Case-Mix Classification decreases the possible RUGs from 43 to 25. This was achieved by collapsing case-mix groups with contiguous ADL scores when those RUGs were defined by similar clinical traits. Under PDPM, CMS is proposing to use Section GG to determine a Function Score as outlined in tables 24 and 25:
  • Non-therapy Ancillary scoring is dependent on the condition/extensive service of the left column from the noted source location. The points identified are then summed to get the total NTA score.
Based on scores summed from table 27, the below table depicts the NTA Case-Mix Classification Groups:
CMS is encouraging providers to submit questions and comments on the proposed rule through June 26, 2018.
 
Click here for PDPM resources provided by CMS including the grouper tool.
What should your facility do to prepare?
  • Ensure a seamless process in obtaining hospital DC documentation in order to best classify the patient’s condition at the 5-day MDS.
  • Submit questions and comments on the proposed rule by the June 26 deadline.
  • Make plans to attend the 12-part Proactive webinar series on the upcoming 2019 changes to prepare for the Medicare reimbursement updates as well as Phase 3 requirements of Participation and Value Based Purchasing. Watch future newsletters for details coming soon.
  • Contact Proactive Medical Review to discuss training and consulting services to prepare for success under PDPM including ICD.10 and Section GG coding training.
Resources
Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Proposed Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program: www.federalregister.gov/documents/2018/05/08/2018-09015/medicare-program-prospective-payment-system-andconsolidated-billing-for-skilled-nursing-facilities
PDPM Model Calculation Worksheets:
SNF PPS Payment Model Research:
Guide to the Rulemaking Process:
Sheena Mattingly M.S. CCC-SLP RAC-CT
Clinical Consultant
Proactive Medical Review & Consulting, LLC
www.proactivemedicalreview.com  | (812) 471-7777