When the Medicare skilled nursing payment final rule for FY 2022 came out recently, providers breathed a sigh of relief. We were all watching closely for the determination by the Centers for Medicare & Medicaid Services (CMS) on its proposed 5 percent cut to payment rates to maintain budget neutrality. After consideration of COVID-19 impact and other factors, CMS decided to hold off for a year before addressing what the agency considers to be excess spending under the Patient-Driven Payment Model (PDPM), implemented in October 2019. After a very difficult year, this was welcome news, but many challenges remain. Now is the time to redouble efforts under this new payment system to increase acuity, change service delivery, and ensure that your documentation is in order.
The road ahead on PDPM has some land mines. The market basket update is only 1.2 percent for FY 2022. The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) adjustment will mean that there is a further 0.8 percent reduction for all providers, regardless of performance on 30-day readmissions. The looming re-imposition of the 2 percent Medicare sequestration adjustment means that Medicare rates will be going down even prior to any 5 percent cut that might be implemented in the future. We have also seen an increase in additional documentation requests (ADRs) from payors, seeking evidence to justify the payments already made. Finally, at some point, the three-day prior hospital stay waiver may get terminated when the public health emergency ends.
Many providers have been examining their acuity levels under PDPM and considering taking patients they have previously shied away from. These would include patients needing IVs or total parenteral nutrition, as well as those with other skilled needs such as respiratory therapy. This has been a challenge during the pandemic as experienced staff has been hard to find, so this strategy must be accompanied by a recruitment and retention program and thorough training.
A second thing providers have been doing is restructuring service delivery, particularly of therapy. Some of these efforts were sidetracked by COVID-19, but data from CMS indicated an increase in group and concurrent therapy and a reduction in individual therapy. It is time for every skilled nursing provider to examine their therapy contracts and move them to an outcome orientation in line with value-based care. Some providers have been considering moving therapy in-house as well, an option that requires careful analysis.
Another thing some providers are doing is conducting independent reviews of their Medicare documentation and operational processes. At Health Dimensions Group (HDG), we have done many such reviews and see consistent issues among our clients, including:
As a national leader in health care management and consulting services, HDG can assist your organization in surviving and thriving in this challenging environment. Our capabilities include strategic and operational reviews, as well as preparation for value-based care, surveys, and audits. Please contact us at firstname.lastname@example.org or 763.537.5700 for more information.
Authored by: Brian Ellsworth
Vice President, Public Policy and Payment Transformation
Michael Riley, RN RAC-CT