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senior living provider badgeThe Patient Driven Payment Model (PDPM)

What is PDPM?

The Patient Driven Payment Model (PDPM) is the new Medicare payment rule for skilled nursing facilities, which goes into effect October 1, 2019. PDPM will replace the RUG-IV model, and reimbursement will be calculated under a new set of criteria. The PDPM reimbursement model is care-needs driven rather than volume of therapy delivered under RUG-IV. Improving outcomes is the driver, and PDPM assigns every resident a case-mix classification that correlates to daily reimbursement.

How Will PDPM Affect My Organization?

It’ll be a big switch from a model in which the volume of services provided to the resident drives the daily rate and includes multiple assessment opportunities to capture those services -- to a payment rate focused on resident admission comorbidities as the main driver for reimbursement.

There are multiple avenues in which you can be affected by PDPM, some key areas are:

Assessments and Documentation – There are fewer assessments under PDPM. The 14-day, 30-day, 60-day, 90-day, and OMRA assessments will be eliminated. To ensure proper reimbursement, the initial 5-day assessment will be crucial in ensuring all conditions and co-morbidities are identified and captured correctly. Providers will need to easily assess, document, and accurately report on resident condition and needs in order to create a customizable care plan for each resident and ensure maximum reimbursement. Getting the complete clinical picture for each resident starting from pre-admission will be key.

Therapy Staffing – With the shift away from therapy minutes and anchor days driving reimbursement, SNFs may want to look at ways to do more concurrent and group therapy to save costs. 75% of therapy has to be individual therapy as group and concurrent are capped at 25%. It will be extremely important to make sure that the SNF level of care is still being delivered and documented as the Medicare benefit regulation stays the same.

Additionally, you’ll want to have a comprehensive pre-admission process and work closely with your referring partners to ensure a complete clinical picture of the resident. Certain high cost procedures that transpire in the hospital are allowed to be captured within the MDS, and your RNACs will need the support documentation, along with the specifics of this information, when setting the 5-day ARD. Accurate specified ICD-10 coding expertise will also be essential to help ensure your residents are falling into the highest composite rate. Under PDPM, you can lose money by using unspecified ICD-10 codes.

What is HCS Doing to Prepare?

HCS is committed to making the necessary enhancements to our solutions that will ensure our customers are fully compliant with PDPM. We’ve created a core PDPM team to plan, develop, and implement PDPM-specific enhancements to our solutions. As a vendor, we are committed to programming essential elements, which include making necessary adjustments to MDS schedule, adding new IPA and OSA assessments, updating new MDS questions, along with scoring and rate calculation updates. Additionally, we’re creating exciting enhancements including a tool for facilities to run current MDS data against PDPM calculations to forecast reimbursement, highlighting the 161 MDS questions driving rate components to aid in the education process, tools to coach the user when non-specified ICD-10 codes are selected, and new feeds from the EMR to support MDS coding. We aim to provide deeper insight reporting into all of these changes around PDPM for better visibility into compliance, reimbursement, and care.

How Will HCS Help My Organization?

HCS will conduct onsite and web-based trainings to educate customers on PDPM requirement criteria, and new methods to perform assessments and criteria within HCS ahead of the October 1st mandate.

Additional Resources

CMS PDPM Fact Sheets and FAQ


American Health Care Association (AHCA) PDPM Resource Page


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