Uncertain Future Ahead? Time to Redouble PDPM Efforts

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.

Preparing for Change

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:

• Medicare documentation lacking sufficient support about patient needs requiring the skills, knowledge, and judgement of a licensed nurse.
• Inadequate functional abilities coding, which is important for the PT/OT and nursing components. In some instances, there is no support for what was coded in the minimum data set (MDS) because the data was pulled directly from the PT and OT evaluations with no other sources of data collection present.
• Incorrect primary ICD-10 diagnosis coding because the information was only taken from the History and Physical or the discharge summary. Although these are important sources for information, all hospital documentation should be reviewed to ensure that the primary diagnosis responsible for Medicare skilled coverage is accurately selected and that the MDS does not have inactive diagnoses. Plus, sequencing of diagnosis codes is important, both in the medical record and on the claim.
• Inadequate completion (“dashing”) of MDS questions responsible for PDPM and the Quality Reporting Program (QRP), such as not assessing Brief Interview for Mental Status or questions responsible for calculation of the QRP measures. Dashing of questions that calculate the PDPM speech component could result in lower reimbursement, and dashing of questions which assist in calculation of the QRP measures could result in not meeting the 80 percent submission requirement, resulting in a potential 2 percent reduction the following year.
• Coding of swallowing disorders: Typically, in most communities, this question is completed by dietary. This question should be completed by either a combination of dietary and nursing or by nursing itself so that all speech qualifiers can be identified.
• Malnutrition screening and coding of pressure ulcers: We frequently find that assessment of these issues is lacking, or the documentation is in conflict. These are important areas for non-therapy ancillary and nursing component scoring.
• Coding of isolation without support in the medical record can result in payments for isolation being disallowed on audit.
• Physician certification is a technical requirement for participation in the Medicare program and would result in a technical denial. Validation of physician certification during your weekly meeting along with your triple check process would catch this issue prior to billing.
• Notice of Medicare Non-Coverage/Advance Beneficiary Notice is also a technical requirement for the Medicare program and would result in a denial of payment in an ADR situation. Communities need to have a solid process with a backup to ensure this does not get dropped. A break in this process could mean losing the appeal, along with not being able to bill Medicare and not being able to bill the resident privately.

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 info@hdgi1.com or 763.537.5700 for more information.

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

Michael Riley, RN RAC-CT
MDS/Reimbursement Consultant