What Leaders Need to Know: The Final Rule – Impacts to the MDS Process

The Medicare payment classification system change to the Patient Driven Payment Model (PDPM) for SNFs is October 1, 2019. Medicare payments will be based on the PDPM classification system instead of the RUGS IV classification system.
Centers for Medicare & Medicaid Services (CMS) published Final Rule updates to the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2020, making minor revisions to the regulation text to reflect the revised assessment schedule under PDPM. Additionally, there are revisions to the definition of group therapy under the SNF PPS, and the implementation of a sub-regulatory process for updating the code lists (ICD-10 codes) used under PDPM. Lastly, updated requirements for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program are also included. Click to download update from the Federal Register>

Below are a few “need to know” updates.

Q. What changes were made to the PDPM adjusted base rates?

A. Two major revisions were made:
1. The SNF Market Basket percentage increase was updated based on the second quarter 2019 forecast. The revised update is 2.8%.

2. PDPM Case-Mix indexes (CMI) and Adjusted Federal rates for each CMI for urban and rural facilities were updated and published.

Q. What are CMS’ clarifications to the Interim Payment Assessment (IPA)?

A. CMS clarified that the IPA is to be used as the SNF determines after the initial Medicare MDS (5-day) to address a resident’s clinical changes throughout the Medicare stay; “to provide excellent skilled nursing and rehabilitative care and continually monitor and document patient status. Moreover, the discussion of the IPA in the FY 2019 SNF PPS final rule (83 FR 39233) clearly envisions a role for this assessment that is not strictly limited to payment alone.”

Q. What are the SNF Quality Reporting Program (QRP) impacted areas?

A. Key updates were made to the following:
1. Transfer of Health Information to the PROVIDER – Post-Acute Care effective FY2022: The FY 2021 PPS assessments will be revised to collect data about the transfer of a reconciled medication list to the next post-acute care provider when a resident discharge from a SNF Medicare stay.

2. Transfer of Health Information to the PATIENT – Post-Acute Care effective FY2022: The FY 2021 PPS assessments will be revised to collect data about the transfer of a reconciled medication list to the resident at the time of discharge from a SNF Medicare stay.

3. The Discharge to COMMUNITY – Post-Acute Care:The Quality Measure for the SNF QRP will be adjusted for FY2020 to exclude residents of the SNF in 180 preceding their hospitalization and SNF stay.

4. Drug Regimen Review Conducted with Follow-Up for Identified Issues – Post-Acute Care: Will be posted to Nursing Home Compare for FY 2020.

5. Definition of the RAI Manual: The official definition of RAI Manual is the Manual instructions, the interpretive guidance and policy clarifications posted in the MDS website. Click here to view>

PDPM Insight, Expertise and Knowledge.

Pathway Health PDPM experts can assess your organization’s readiness and provide a detailed action plan for enhancing or improving these processes. Our PDPM consulting services and tools can support your busy leaders and staff to effect a smooth transition to the PDPM system. Pathway Health also offers expert PDPM training – classroom, onsite and web-based. Contact us to learn more.


Karolee Alexander
Director of Reimbursement and Clinical Consulting