After a brief 34-day interval from the close of the comment period to the publication of the final rule, the Centers for Medicare & Medicaid Services (CMS) finalized its proposal to implement the Patient-Driven Payment Model (PDPM), largely as proposed with only a few modifications. PDPM will be effective October 1, 2019, and implemented in a budget-neutral manner.
With this action, CMS has sent a strong signal—it is time for change. Since the changes to the April 27, 2018, proposed rule are largely tweaks, our basic take on PDPM remains the same. Well before October 2019, skilled nursing providers need to:
The new payment system will help skilled nursing facilities (SNFs) better integrate into a value-based environment (e.g., bundlers, ACOs). In addition, Medicare Advantage plans are likely to adopt it in whole or in part, allowing for better integration across payors.
October 1, 2019, will be here before you know it. In the meantime, following is a summary of what has changed and what is staying the same in the final rule.
There are four key changes from the April 27, 2018, proposed rule.
Rather than making the Interim Payment Assessment (IPA) a required assessment as proposed, it will be optional, and providers may determine whether and when an IPA is completed. Because of that, CMS is revising the Assessment Reference Date (ARD) criteria such that the ARD will be the date the SNF chooses to complete the assessment relative to the triggering event that makes the SNF complete the IPA. Payment based on the IPA will begin the same day as the ARD.
The IPA was placed into the payment system as a way to recognize changes in patient condition over the course of the stay. Providers were concerned about operationalizing this component and the resulting compliance risk if not implemented correctly. By making this optional, CMS has attempted to address those concerns. Guidelines for IPAs will be developed.
CMS finalized the proposed PT and OT components under the PDPM, as well as the methodology for classifying residents under the PT and OT components, with one important modification. The proposed rule required providers to record the type of inpatient surgical procedure performed during the prior inpatient hospital stay by coding an ICD-10-PCS code in the second line of MDS item I8000. In response to comments, CMS will instead require providers to select, as necessary, a surgical procedure category in a sub-item within MDS Item J2000. This category will identify the relevant surgical procedure that occurred during the patient’s preceding hospital stay and will augment the patient’s PDPM clinical category.
This checklist approach will help reduce administrative burden for coding the preceding surgical procedures, but SNFs will still need to up their game on ICD-10 coding on the MDS as it determines the primary reason for the SNF stay.
For purposes of calculating the function score, all missing values for section GG assessment items will receive zero points. Similarly, the function score will incorporate a new response “10. Not attempted due to environmental limitations” and CMS will assign it a point value of zero. The final rule further states:
Furthermore, consistent with a commenter’s suggestion, we will adopt MDS item GG0170I1 (Walk 10 feet) as a substitute for retired item GG0170H1 (Does the resident walk), and we will use responses 07: “resident refused,” 09: “not applicable,” 10: “not attempted due to environmental limitations,” or “not attempted due to medical condition or safety concerns” from MDS item GG0170I1 to identify residents who cannot walk.
These technical changes point out the importance of mastering Section GG, which also plays a role in SNF quality metrics under the Quality Review Program (QRP).
CMS finalized proposed classifiers for purposes of applying the administrative presumption, with the following modification: “As discussed in that section, we added 6 PT and OT classifiers and 8 SLP classifiers.”
All of the remaining items below are finalized as proposed:
The final point is an interesting case of CMS having its cake and eating it, too. With the implementation of PDPM, CMS is sending a strong signal about moving away from having the amount of therapy drive payment. But by retaining these limits (without a direct penalty, mind you), CMS is also saying that it still expects at least 75 percent of therapy to be individual. CMS is clearly concerned about wholesale changes to therapy, yet they are implementing a payment system that incentivizes it.
Our take is that SNFs need to understand how to get functional outcomes in the most efficient manner possible and be able to justify that approach with solid evidence on quality. CMS will be monitoring implementation so providers need to be mindful of new compliance risks under this model.
Stay tuned for more information from HDG. Please contact us if you are interested in preparing for this important change in payment. For more information, visit our website or contact us at 763.537.5700 or firstname.lastname@example.org.
Vice President, Public Policy and Payment Transformation