Last Friday, CMS released the contents of its annual proposed rule updating the SNF PPS plus (as always), fine tuning certain related programmatic elements. Final Federal Register Publication is set for May 8. (Anyone wishing the PDF version may download it from the Reports and Other Documents page on this site or access it here SNF Proposed Rule 4 2018 ). The most watched information for providers is the proposed rate adjustment though lately, for the post-acute segments of health care, other elements pertaining to payment model changes have eclipsed rate “watching”.
Last year’s proposed rule for the SNF PPS contained the release of RCS-1. After extensive commentary, CMS pulled back RCS-1, shelving it for some conceptual remake. We now, as of Friday, know the remake – PDPM for short (Patient Driven Payment Model). As with all yearly releases similar, a comment period has begun, lasting until (if not otherwise extended) the last week of June (June 26).
PDPM as proposed, is designed to replace the current SNF payment methodology known as RUGs IV. Unless date changes, etc. are made by CMS post commentary review, the effective date of the change (from RUGs to PDPM) is 10/1/19 (next October). PDPM as an outgrowth of RCS-1 and received commentary, is a simplified payment model designed to be more holistic in patient assessment, capture more clinical complexity, eliminate or greatly reduce the therapy focus by eliminating the minute levels for categorization, and simplifying via reduction, the assessment process and schedule (reduced to three possible assessments/MDS tasks). Below is a summary of PDPM core attributes/features as proposed. On this site in the Reports and Other Documents page is the PDPM Calculation Worksheet that provides additional details beyond the reference points below PDPM Calculation for SNFs.
- PDPM uses five, case-mix adjusted components for classification and thus, payment: PT, OT, Speech, Non-Therapy Ancillary and Nursing.
- For each of these components, there are separate groups which a resident may be assigned, based on MDS data. For example, there are 16 PT groups, 16 OT groups, 12 Speech groups, 6 Non-Therapy Ancillary groups and 25 Nursing groups.
- Each resident, by assessment, is classified into one of the group elements within the component categories. This means that every resident falls into a group within the five case-mix components of PT. OT, Speech, Non-Therapy Ancillary and Nursing.
- Each separate case-mix component has its own case-mix adjusted indexes and corresponding per diem rates.
- Three of the components, PT, OT and Non-Therapy Ancillary have variable per diem features that allow for changes in rates due to changing patient needs during the course of the stay.
- The full per diem rate is calculated by adding the PT, OT, and Non-Therapy Ancillary rates (variable) to the non-adjusting or non-variable Nursing and Speech components.
- Therapy utilization may include group and/or concurrent treatment sessions provided no more than 25% of the total therapy utilization (by minutes) is classified as group or concurrent.
- PT, OT, and Speech classification by group within their respective components do not include any function of “time”. The sole denominator of how much/little therapy a resident receives is the necessity determined by the assessment process and by the clinical judgment of the care team. In this regard, the minimum and maximum levels are based on resident need not on a predetermined category (RUG level).
- Diagnoses codes from the hospital on admission (via ICD-10) are important and accuracy on the initial MDS (admission) are imperative.
- Functional measures for Therapy (PT, OT) are derived from Section GG vs. Section G as provided via RCS-1.
- The Non-Therapy Ancillary component allows facilities to capture additional acuity elements and thus payment, for additional existing comorbidities (e.g., pressure ulcers, COPD, morbid obesity, etc. ) plus a modifier for Parenteral/IV feeding.
- There are only three Medicare/payment assessments (MDS) required or predicated starting in October of 2019 – admission, change of condition/payment adjustment and discharge. NOTE: All other required MDS submissions for other purposes such as QRP, VBP, Quarterly, etc. remain unchanged.
For SNFs, the takeaways are pretty straight-forward. First, clinical complexity appears to be the focus of increased payment opportunity. Second, therapies are going to change and fairly dramatic as utilization does not involved minutes and more is better, when clinically appropriate but less is always relevant (if that makes sense). The paperwork via MDS submissions is definitely less but assessment performance in terms of accuracy and clinical judgment is increased. MDS Coordinators, those that are exceptional clinicians and can educate and drive a team of clinicians, will be prized as never before. RUG style categorization is over so the focus is not on maximizing certain types of care and thus payment but on being clinically savvy, delivering high quality and being efficient. The latter is what I have been preaching now for years. Those SNFs that have been trending in this direction, caring for clinically complex patients, not shunning the use and embrace of nursing RUGs, and being on the ball in terms of their assessments and QMs are likely to see some real benefits via the PDPM system.
More on this new payment model and strategies to move forward will be in upcoming posts.