Skilled nursing facility (SNF) providers are eagerly awaiting the next step by the Centers for Medicare and Medicaid Services (CMS) regarding the Patient-Driven Payment Model (PDPM), which could come as early as July 31, 2018, when the proposed rule could be finalized. Health Dimensions Group (HDG) and close to 300 other organizations provided comments to CMS by the June 26, 2018, deadline. CMS has proposed to replace RUGs with PDPM effective October 1, 2019.

We took a look at the comments from three national trade associations (American Health Care Association, LeadingAge, and American Hospital Association) to see what was on their minds. Combining that analysis with our comments, here are some of the main themes that emerged:

  • Concerns about linking payment to ICD-10 coding – a clear concern that linking payment to fully specified ICD-10 codes will impose new burdens on SNFs and potentially create compliance risk. A diagnosis checklist approach has been suggested as an alternative.
  • Need for clear criteria for Interim Payment Assessments (IPAs), and for clarity on how the interrupted stay policy will interact with IPAs—concerns included additional provider burden from monitoring IPAs and the potential for confusion.
  • Exclude more drugs from consolidated billing – with the likely admission of more medically complex patients to SNFs under PDPM and advances in pharmaceuticals, CMS needs to modernize the list of drugs that are excluded from consolidated billing requirements (and thus could be billed separately).
  • Concern about arbitrarily tight limits on concurrent and group therapy – questioning the need for CMS to micromanage provision of therapy in a payment system that proposes to address the very reason those limits were imposed in the first place.

Many of these concerns can be addressed by CMS if they are so inclined. Perhaps the biggest challenge from a logistics standpoint is whether CMS can change the ICD-10 requirements in the short time between the end of the comment period and finalization of the proposed rule. CMS has options if they need more time, including issuing an “Interim Final Rule”, typically with a 30-day comment period. They will not want to extend things for long as CMS appears to understand that providers and vendors will need significant lead time to retool operations, software, contracts, and service lines.

HDG generally supports the move to PDPM. We share many of the concerns noted above, and we are particularly concerned about some of the large negative impacts seen in the impact analysis. That said, PDPM is a step forward towards helping SNFs be positioned as value-based providers, and it better integrates with Medicare Advantage payment approaches—both solid pluses.

So keep an eye out for the next move by CMS. We will keep you posted.

HDG can help you with preparing for PDPM. You can reach us at 763.537.5700 or


Authored by: Brian Ellsworth, Vice President, Public Policy and Payment Transformation