Patient-Driven Payment Model (PDPM)

The Patient-Drive Payment Model (PDPM) is here, and AANAC will continue to help you through the transition. Visit this page frequently for new tools, education, and resources for ongoing success under PDPM.

  • MDS Section J: Learn What ‘Major’ Surgery Means

    By Caralyn Davis, Staff Writer - August 04, 2020

    “Does this surgery count as a major surgery?” is one of the most frequently asked questions that nurse assessment coordinators (NACs) have about MDS items J2100 (Recent Surgery Requiring Active SNF Care) and J2300 – J5000 (Recent Surgeries Requiring Active SNF Care: Surgical Procedures), says Carol Maher, RN-BC, RAC-MTA, RAC-MT, CPC, director of education for Hansen, Hunter & Co. PC in Vancouver, WA.

     

    “It’s an important question because capturing a major surgery in J2100 and J2300 – J5000 can make a difference in the Medicare Part A payment that you receive for the physical therapy (PT) and occupational therapy (OT) components under the Patient-Driven Payment Model (PDPM),” says Maher. “A major surgery can move the resident from their default primary diagnosis clinical category established in I0020B (ICD Code/Primary Medical Condition) into a potentially higher-paying surgical clinical category for PT and OT.”

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  • FY 2021 SNF PPS Final Rule Released (7/20)

    By CMS - August 02, 2020

    On July 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule [CMS-1737-F] for Fiscal Year (FY) 2021 that updates the Medicare payment rates and the value-based purchasing program for skilled nursing facilities (SNFs). CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for SNFs on an annual basis. In recognition of the significant impact of the COVID-19 public health emergency, and limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual SNF rulemaking required by statute to essential policies including Medicare payment to SNFs.

    The final rule includes routine technical rate-setting updates to the SNF prospective payment system (PPS) payment rates, and adopts the revised Office of Management and Budget (OMB) statistical area delineations.  In addition, the rule applies a 5 percent cap on wage index decreases from FY 2020 to FY 2021. In response to stakeholder feedback, we are also finalizing changes to the International Classification of Diseases, Version 10 (ICD-10) code mappings, effective October 1, 2020. Finally, this rule includes minor administrative changes related to the SNF Value-Based Purchasing (VBP) Program.

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  • Hospital Diagnoses: Why You Need to Do a Deeper Dive

    By Caralyn Davis, Staff Writer - July 21, 2020

    Obtaining the most specific medical diagnosis benefits skilled nursing facilities (SNFs) on two fronts: receiving accurate reimbursement under the Patient-Driven Payment Model (PDPM) for Medicare Part A residents and improving the quality of care for all residents, says Carol Maher, RN-BC, RAC-MTA, RAC-MT, CPC, director of education for Hansen, Hunter & Co. PC in Vancouver, WA.

     

    “Often, to get a diagnosis to map from the MDS to a clinical category for the physical therapy (PT), occupational therapy (OT), or speech-language pathology (SLP) payment components under PDPM, you need a more specific diagnosis,” explains Maher. “However, it’s not all about payment. Even without the mapping problem, the resident’s medical record needs to be as accurate and complete as possible, and that includes having accurate diagnoses so that the interdisciplinary team can provide the correct treatment.”

     

    For example, if a resident goes to see an outside provider, the face sheet that the nursing home sends with that resident should be as accurate as possible, she points out. “If the resident had a heart attack, was the myocardial infarction a STEMI (ST-segment elevation myocardial infarction) or a non-STEMI? You don’t want to leave that type of diagnosis unspecified because including the most accurate diagnosis on the nursing home face sheet could affect that outside provider’s treatment decisions and the resident’s overall quality of care.”

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  • Final MDS 3.0 Item Sets and Data Specifications, Plus New Specs Erratata, for Oct. 1, 2020 (7/20)

    By CMS - June 26, 2020

    In response to State Medicaid Agency and stakeholder requests, CMS has updated the MDS 3.0 item sets (version 1.17.2) and related technical data specifications.  These changes will support the calculation of PDPM payment codes on OBRA assessments when not combined with the 5-day SNF PPS assessment, specifically the OBRA comprehensive (NC) and OBRA quarterly (NQ) assessment item sets, which was not possible with item set version 1.17.1.  This will allow State Medicaid Agencies to collect and compare RUG-III/IV payment codes to PDPM ones and thereby inform their future payment models.

    The changes to the technical data specifications that support these modifications are contained in the Errata v3.00.4 which can be accessed in the file: MDS 3.0 data specs errata (v3.00.4) Final 04-30-2020 in the Downloads section below. Supporting materials including the 1.17.2 Item Change History report and the revised 1.17.2 Item Sets can be accessed in the file:  MDS 3.0 Final Item Sets v1.17.2 for October 1 2020 zip also posted in the Downloads section below.

    Please confirm with your State Medicaid Agency if your State will be requiring the calculation of the PDPM payment codes on the OBRA assessments when not combined with a 5-day SNF PPS assessment.

    June 25, 2020 update:  An updated errata (V3.00.5) was posted for the FINAL version (v3.00.1) of the MDS 3.0 Data Specifications, currently in production.  Two issues were identified.  These changes will go into production on October 1, 2020.  As a result, two edits will be revised.  These changes will facilitate calculation of PDPM HIPPS codes on OBRA assessments for states that wish to have this calculation performed. 

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  • To IPA or NOT To IPA: That Is an Important Question

    By Carol Maher, RN-BC, RAC-MTA, RAC-MT, RAC-CTA, RAC-CT, CPC - May 05, 2020

    Healthcare professionals were relieved when CMS agreed to make the Interim Payment Assessment (IPA) optional instead of a requirement. This meant that skilled nursing facilities (SNFs) could decide when or if they would complete these payment assessments. CMS anticipated that SNFs would perform IPAs during each Medicare Part A stay both to improve Medicare payment during the stays and to monitor patients’ clinical status. However, data shows that few IPAs are being completed.

     

    One likely reason why: the complexity of the new Patient-Driven Payment Model (PDPM) makes it difficult to know when an MDS would improve the final payment. John Kane, CMS’s SNF Payment Team Lead, stated during one of CMS’s train-the-trainer sessions that there could be as many as 1,900 possible payment combinations per PPS MDS.

     

    So how can you know whether an IPA would improve the Medicare payment? First, let’s consider the impact of CMS’s original plan to require the IPAs. CMS proposed that IPAs would be completed when there was a change in one of the first-tier classification criteria in any of the proposed payment components. For example, if the resident had been classified into the Major Joint Replacement category for the PT/OT component and their primary diagnosis changed to Medical Management, the IPA would have been required. Likewise, when a resident’s Nursing component category changed from Extensive Services to Special Care Low, an IPA would have been required. We are grateful that assessments are not mandatory in these circumstances, but they provide a useful starting point for understanding when an IPA could be financially beneficial.

     

    In the SNF PPS Final Rule for FY 2020, CMS included the following table showing the FY 2020 federal unadjusted urban base rates for each of the six PDPM payment components:

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  • Part A Physician Certs/Recerts: CMS Confirms How to Count Days

    By Caralyn Davis, Staff Writer - May 05, 2020

    To bill under traditional fee-for-service Medicare Part A, skilled nursing facilities (SNFs) must obtain appropriate, timely physician certifications and recertifications of posthospital inpatient extended-care services. The physician cert/recert policy did not change with the implementation of the Patient-Driven Payment Model (PDPM) on October 1, 2019.

     

    However, the Centers for Medicare & Medicaid Services (CMS) did adjust the instructions in the Medicare Online Manual System to explain when providers need to obtain a new physician certification vs. when they should continue using the existing cert/recert to account for the interrupted stay policy that was implemented in conjunction with PDPM. This adjustment brought to light the fact that some SNFs may be counting calendar days instead of Medicare days to determine when certs/recerts are due—a practice that is incorrect CMS officials tell the American Association of Nurse Assessment Coordination (AANAC).

     

    “The regulations at 42 CFR 424.20(d) state that the first recertification is required no later than ‘the 14th day of post-hospital SNF care.’ This would have the schedule track with the days of the stay (i.e., covered days) rather than calendar days,” explain officials. Note: Review the physician cert/recert section of the Code of Federal Regulations in the box at the end of this article.

     

    “This also tracks with previous statements we have made comparing the recertification timeline with the variable per-diem schedule, and interrupted stays have similar impacts on both, as noted in response to FAQ 13.21,” say officials. Here is the FAQ excerpted from Patient-Driven Payment Model: Frequently Asked Questions (FAQs):

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  • FY 2021 SNF PPS Proposed Rule: CMS Holds Steady on the SNF QRP, SNF VBP

    By Caralyn Davis, Staff Writer - April 13, 2020

    On April 10, the Centers for Medicare & Medicaid Services (CMS) released for public inspection the Fiscal Year (FY) 2021 Proposed Rule for the Skilled Nursing Facility Prospective Payment System (SNF PPS) and Consolidated Billing (CMS-1737-P) as required by law. In a major break from recent years, CMS offers no proposals for updating the Skilled Nursing Facility Quality Reporting Program (SNF QRP) and only what the agency describes as “minor administrative proposals” related to the SNF Value-Based Purchasing (VBP) program.

     

    However, CMS does propose several other revisions in addition to the required Medicare Part A payment rate update. These include:

     

    • Multiple changes to the ICD-10-CM code mappings used for case-mix classification in the Patient-Driven Payment Model (PDPM);

    •  Technical changes to the regulatory language in the Code of Federal Regulations, including a proposed change that will clarify the “practical matter” criterion of a Part A skilled level of care by removing an outdated example that referred to the repealed Part B therapy cap provision; and

    • Changes to how SNFs are identified as rural or urban for wage index classification, as well as a proposal to cap wage index decreases from FY 2020 to FY 2021 as a transition measure.

     

    CMS also is keeping its options open for future adjustments to the PDPM based on its ongoing monitoring efforts. Here are highlights of the FY 2021 proposed rule.
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  • FY 2021 SNF PPS Proposed Rule Released (4/20)

    By CMS - April 13, 2020

    Fiscal Year 2021 Proposed Medicare Payment and Policy Changes for Skilled Nursing Facilities (CMS-1737-P)

     

    On April 10, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule [CMS-1737-P] for Fiscal Year (FY) 2021 that updates the Medicare payment rates and the quality programs for skilled nursing facilities (SNFs). CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for skilled nursing facilities on an annual basis.  CMS recognizes that the entire healthcare system is focused on responding to the COVID-19 public health emergency. As a result, the proposed rule includes proposals required by statute and that affect Medicare payment to SNFs, as well as proposals that reduce provider burden and may help providers in the COVID-19 response.

    These updates include routine technical rate-setting updates to the SNF PPS payment rates, as well as a proposal to adopt the most recent Office of Management and Budget (OMB) statistical area delineations and apply a 5 percent cap on wage index decreases from FY 2020 to FY 2021. We are also proposing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to stakeholder feedback. Finally, this rule includes minor administrative proposals related to the SNF Value-Based Purchasing (VBP) Program, further described below.

    2019 Coronavirus (COVID-19) Outbreak:

    The health and safety of America’s patients and provider workforce in the face of the Coronavirus Disease 2019 (COVID-19) outbreak is the top priority of the Trump Administration and CMS. We are working around the clock to equip the American healthcare system with maximum flexibility to respond to the 2019 Novel Coronavirus (COVID-19) pandemic. Recently, at President Trump’s direction, CMS issued an unprecedented array of temporary regulatory waivers and new rules to equip the American healthcare system with maximum flexibility to respond to the COVID-19 pandemic, including waiving the SNF benefit’s 3-day qualifying inpatient hospital stay requirement (pursuant to section 1812(f) of the Social Security Act), which allows SNF patients to be admitted without the typically required 3-day inpatient hospital stay and additional flexibility in relation to how beneficiaries may access a new SNF benefit period without the typical 60-day “wellness” period.

    To keep up with the important work the Task Force is doing in response to COVID-19, go to Coronavirus.gov.  For information specific to CMS, please visit the Current Emergencies Website.

    While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates. This fact sheet discusses several major provisions of the proposed rule: the proposed changes to SNF payment policy under the SNF Prospective Payment System (PPS) and the SNF Value-Based Purchasing Program (VBP). This proposed rule includes proposals that would continue a commitment to shift Medicare payments from volume to value, with the continued implementation of the Patient Driven Payment Model (PDPM) and the SNF VBP, to improve program interoperability, operational quality and safety.

    CMS encourages comments on this proposed rule and will accept comments until June 9, 2020.  The proposed rule [CMS-1737-P] can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection                                                                                                  

    Strengthening Medicare

    CMS projects aggregate payments to SNFs will increase by $784 million, or 2.3 percent, for FY 2021 compared to FY 2020. This estimated increase is attributable to a 2.7 percent market basket increase factor with a 0.4 percentage point reduction for multifactor productivity adjustment. 

    As amended by section 4432 of the Balanced Budget Act of 1997 (BBA 1997) (Pub. L. 105-33, enacted on August 5, 1997), section 1888(e) of the Social Security Act (the Act) provides for the implementation of a PPS for SNFs.  This methodology uses prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services defined in section 1888(e)(2)(A) of the Social Security Act.  The SNF PPS is effective for cost reporting periods beginning on or after July 1, 1998, and covers all costs of furnishing covered SNF services (routine, ancillary, and capital related costs) other than costs excluded under the statute, such as costs associated with approved educational activities and bad debts.

    Changes in SNF PPS Wage Index

    Under section 1888(e)(4)(G)(ii) of the Act, we adjust the federal rates to account for differences in area wage levels. We proposed to adopt revised geographic delineations provided by the Office of Management and Budget, which are used to identify a provider’s status as an urban or rural facility and to calculate the wage index and apply a 5 percent cap to wage index decreases.

    Updates to PDPM Clinical Diagnosis Mappings

    CMS’ Patient Driven Payment Model (PDPM) is an innovative and historic change in how we pay for care that is more focused on patient characteristics, rather than volume, under the SNF PPS and is used for classifying patients in a covered Medicare Part A SNF stay into case-mix groups.  Implemented on October 1, 2019, PDPM utilizes International Classification of Diseases, Version 10 (ICD-10) codes to classify SNF patients into payment groups. Each year, CMS considers recommendations from stakeholders on changes to the ICD-10 code mappings used under the PDPM. In this proposed rule, we are proposing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to these stakeholder recommendations. We encourage stakeholders to continue to provide this essential feedback on the ICD-10 code mappings, so that we may continue to improve and refine our payment methodology.

    SNF Value-Based Purchasing (VBP) Program

    The SNF VBP Program began distributing SNFs with incentive payments on October 1, 2018.  The SNF VBP Program scores SNFs on a single all-cause claims-based measure of hospital readmissions, as required by law, and adjusts Medicare Part A fee-for-service (FFS) payments under the SNF Prospective Payment System (PPS).  The Program aims to improve quality of care by incentivizing SNFs to reduce unplanned hospital readmissions. The law requires that CMS reduce SNFs’ Medicare Part A FFS payments by 2 percent, then redistribute between 50 to 70 percent of that reduction to SNFs as incentive payments.  Because of this legislative requirement, the Program results in Medicare savings. 

    In the FY 2021 SNF PPS proposed rule, CMS is proposing to align the SNF VBP Program regulation text at 42 CFR § 413.338 with previously finalized policies, to apply the 30-day Phase One Review and Correction deadline to the baseline period quality measure quarterly report, and to establish performance periods and performance standards for upcoming program years.  CMS is not proposing to make any changes to the measures, SNF VBP scoring policies, or payment policies.

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  • FY 2020 PDPM ICD-10 Mapping Tool and MDS Item I0020B ICD-10 Code Lookup Tool UPDATED (4/20)

    By CMS - April 01, 2020

    CMS has updated the PDPM ICD-10 Mappings File for FY 2020., as well as the I0020B Code Lookup File for FY 2020.

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  • The Particulars of Coding Pre-Admission Data and PDPM

    By Jessie McGill, RN, RAC-MT, RAC-MTA - April 01, 2020

    When the nurse assessment coordinator (NAC) prepares to code the MDS, the process starts with data collected during the lookback period. However, one frequently-asked question is, “When can services that occurred prior to admission to the skilled nursing facility (SNF) be captured on the MDS?” There is no simple answer, because it depends on the coding instructions for each MDS item. Let’s take a look at the particulars of coding preadmission data, why it is collected, and how preadmission data is used under PDPM.

     

    Background

    Chapter 3 of the RAI User’s Manual contains the coding instructions for each MDS item; however, the overview of chapter 3, pages 3-1 through 3-6, are often overlooked. This brief section discusses coding conventions, which apply to all MDS items, and includes the instructions on preadmission data:

    With the exception of certain items (e.g., some items in Sections K and O), the lookback period does not extend into the preadmission period unless the item instructions state otherwise. In the case of reentry, the lookback period does not extend into time prior to the reentry, unless instructions state otherwise.

     

    MDS Item Set 1.17.1 Preadmission Data and Why It Is Collected

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  • MDS Item I8000: Solve Common Coding Problems Under PDPM

    By Caralyn Davis, Staff Writer - April 01, 2020

    Under the Patient-Driven Payment Model (PDPM), MDS item I8000 (Additional Active Diagnoses) is on every nurse assessment coordinator’s (NAC’s) radar thanks to its role as a source of ICD-10-CM diagnosis codes that can influence the speech-language pathology (SLP) or nontherapy ancillaries (NTA) case-mix-adjusted payment components—not to mention its role providing risk-adjustment covariates for the Skilled Nursing Facility Quality Reporting Program (SNF QRP) quality measures (QMs) says Carol Maher, RN-BC, RAC-MTA, RAC-MT, RAC-CTA, RAC-CT, CPC, director of education for Hansen, Hunter & Co. PC in Vancouver, WA.

     

    “Despite this renewed focus on I8000, NACs and other interdisciplinary team (IDT) members are still struggling with diagnosis coding,” says Maher. “There is a lot of confusion in SNFs across the country.”

     

    Here are seven steps the NAC and other IDT members can take to address common problems that may prevent I8000 from being coded accurately:

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  • PDPM Grouper DLL Package Revised Again--Make Sure Your Software Is Updated (3/20)

    By CMS - March 31, 2020
    A revision to the PDPM DLL Package (V1.0004 FINAL) was posted, and the previous version (V1.0003 FINAL) was removed.  This version adds support for the new ICD-10-CM code for Coronavirus, U07.1. Note that this code is ONLY in effect for assessments with target date 04-01-2020 and later.  The package contains updated test files and documentation.
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  • jRAVEN 1.7.3 Free MDS Submission Software Updated (3/20)

    By CMS - March 30, 2020

    jRAVEN (version 1.7.3) is now available for download which contains the following updates:  

    • The new COVID-19 ICD code has been added, effective 4/1/2020. In support of that this new release of jRAVEN has the following updates:

     

    MDS Validation Utility Tool (VUT) V3.3.0

    The MDS Validation Utility Tool (VUT) v3.3.0 is now available. This release is effective on April 1, 2020, and supports the addition of the new COVID-19 ICD Code. For additional information please review the associated MDS VUT ReadMe text file.

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  • Section GG: CMS Training Videos for GG0130H, GG0170L, GG1070P (3/20)

    By CMS - March 23, 2020

    The Centers for Medicare & Medicaid Services is releasing three short video tutorials to assist providers with coding Section GG. These videos, ranging from 5 to 10 minutes, are designed to provide targeted guidance using simulated patient scenarios. To access the videos, click on the links below:

    ·         GG0130H. Putting on/taking off footwear.

    ·         GG0170L. Walking 10 feet on uneven surfaces.

    ·         GG1070P. Picking up object.

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  • SNF Claims Incorrectly Canceled (3/20)

    By CMS - March 23, 2020

    From January 26 through February 16, 2020, a software issue caused Skilled Nursing Facility (SNF) claims to be incorrectly cancelled with a message that there was no three day qualifying hospital stay. This issue is corrected. If your claims were incorrectly cancelled, re-bill them in sequential order to receive payment.

    Note:

    ·         Claims need to process in date of service order for each stay for the Variable Per Diem (VPD) to calculate correctly

    ·         Submit claims in sequence and wait at least 2 weeks before billing subsequent claims

    ·         Some of the affected claims with older dates of service will require a timely filing exception; enter “Resubmission due to non-qualifying stay” in the remarks field

    ·         This issue was not caused by the recent implementation of the SNF Patient Driven Payment Model

    ·         Contact your MAC to receive the Medicare Beneficiary Identifier (MBI) for deceased beneficiaries

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