After a long build-up, the implementation time for the Patient-Driven Payment Model (PDPM) has arrived! In the past few weeks, providers have been making their last-minute preparations for this major payment overhaul. At the same time, the Centers for Medicare and Medicaid Services (CMS) has been clarifying policy, most recently in an Open Door Forum and through finalizing the Long-Term Care Facility Resident Assessment Instrument (RAI) User’s Manual (Version 1.17.1).

RAI Manual Updates

The RAI manual updates are mostly clarifications of existing policy, but there are some changes due to the recently enacted final rule for FY 2020. For instance, the manual incorporates changes with respect to the definition of group therapy for Medicare Part A patients, which is now defined as “the treatment of 2 to 6 residents, regardless of payer source, who are performing the same or similar activities, and are supervised by a therapist or an assistant who is not supervising any other individuals.”

Here are some of the important clarifications in the RAI Manual:

  • Coding of primary diagnosis in MDS Item I0200B – Language was added to further clarify that the patient’s primary medical condition category that best describes the primary reason for the Medicare Part A stay is the one that should be coded; these would usually be sequelae or late effects of the acute condition.
  • Treatment of Brief Interview for Mental Status (BIMS) coding in the case of unexpected discharge – RAI manual clarifies the policy that when a BIMS is unable to be conducted due to unexpected discharge, enter “No” for MDS item C0100 (skips the interview) and then proceed with the staff assessment. This clarification helps to ensure that skilled nursing facilities (SNFs) are able to capture cognition information about the patient even when the patient is unexpectedly discharged. The manual goes on to clarify that when neither the BIMS nor staff assessment are completed, the patient would be scored as “cognitively intact,” which is preferable to receiving the default rate.
  • Definition of the “interruption window” for interrupted stays – RAI manual provides scenarios clarifying that if the patient goes off Medicare Part A for various reasons (e.g., refuses rehab, elects hospice, left against medical advice), but either stays in, or returns to, the same SNF with Part A coverage within three days, the interrupted stay policy would apply and the stay would be treated as one continuous stay for payment purposes. This has been an area of confusion for many SNFs.
  • Assessments that swing bed providers must complete – RAI manual clarifies that OBRA assessments are not required of swing bed SNFs.

October 1 Transition and Interim Payment Assessments

One PDPM topic that has proven challenging for many providers is the Interim Payment Assessment (IPA). These are truly optional assessments, except for right now as we transition to PDPM!

For all Medicare Part A patients (and possibly some or all Medicare Advantage patients) that are in the SNF on October 1, 2019, an IPA must be completed. For those patients, it is important for providers to open cases early and to document all pertinent information by the Assessment Reference Date (ARD)—to be set no later than October 7, 2019.

Four points to keep in mind as you are making this transition:

  • October 1, 2019, will be considered day 1 of the variable per diem (VPD) schedule under PDPM, even if the patient began their stay prior to October 1, 2019. The good news is that the increased payments for Non-therapy Ancillaries (NTAs) kick in right away and that the PT/OT reductions don’t start until October 21, 2019.
  • Any “transitional IPAs” with an ARD after October 7, 2019, will be considered late, and the late assessment penalty will apply.
  • Example: Medicare Part A patient was on caseload on October 1, 2019, but the ARD was mistakenly set for October 9, 2019. Payment for October 1 and 2 will be paid at the default rate, and payment for October 3 and forward will be at the applicable PDPM rate with the VPD clock set at day 3. In this example, the SNF misses out on the full rate for the first two days, including the 300 percent increase of the NTA component. Painful, to be sure.
  • Reminder: if you find a mistake in the MDS after you have sent it, the MDS correction policy remains the same.
  • If you are unsure about the direction of your managed care plans with respect to PDPM, open an IPA and set the ARD to days 1–7. If you later discover that the managed care plan is not following PDPM, you do not have to complete the IPA, but it is better to have the option than not.

After the transition is over (meaning for all patients admitted on or after October 1, 2019), the IPA is truly optional. Consider completing an IPA when the patient’s condition changes and the care delivered will increase the payment. This decision should be an interdisciplinary decision after each component is evaluated. Our HDG Learn webinars have provided scenarios describing when IPA completion makes sense.

Transition and Post-Implementation Assistance

Although this is considered a “hard transition” from RUGs to PDPM, it does not mean that it needs to be hard for providers. HDG can help with education and training, evaluation of operational readiness, post-implementation follow-up (including auditing), clinical programming, and strategic positioning. Please contact us at 763.537.5700 or and visit our website.

Brian Ellsworth Mike Riley

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

Mike Riley,
RN, MDS and Reimbursement Consultant