What Do You Really Need to Do Now to Prepare for PDPM?
When the Medicare payment model changes for nursing homes on October 1, 2019, the drivers of reimbursement will be dramatically changed. Under the current payment model, the amount of therapy provided to the resident in a seven-day period is the major determinant of the amount of daily payment the nursing home will receive from Medicare. Additionally, the resident’s level of dependence in activities of daily living (ADL) impacts the final payment category and amount. The higher the level of ADL dependence, the higher the payment rate. The nursing assistant staff documents the supporting charting of each resident’s ADL dependence level.
The new payment model, Patient-Driven Payment Model (PDPM), uses the resident’s clinical conditions as the main determinant of payment. The resident’s ADL dependence score is derived from an area of the Minimum Data Set (MDS) that is assessed and documented by the professional staff. There is no impact on the payment rate from the amount of therapy services provided. Payment is higher in the Physical Therapy (PT) and Occupational Therapy (OT) components of PDPM for residents who require some ADL help but are not totally dependent. These residents are more likely to be able to participate in and benefit from therapy services.
The PDPM system is comprised of six components:
- Non-Case-Mix Base Rate
- Physical Therapy
- Occupational Therapy
- Speech therapy
- Skilled Nursing
- Non-therapy Ancillary
Each component is scored separately and has federally established rates for each Case-Mix category in the component. The Case-Mix rates for each component are summed to establish the overall daily payment rate for the resident’s skilled stay under Medicare Part A.
There will be no transition period to PDPM. On September 30, 2019, Medicare payment will be from the RUG-IV classification system. On October 1, 2019, Medicare payment will be determined by a new MDS that established the PDPM payment rate. Because there will be no transition, nursing facilities need to perfect their systems that impact PDPM now.
The triad of systems, or M-I-P, that support PDPM are highlighted below:
- MDS coding accuracy, especially in Section GG, functional performance and Section I, diagnoses
- ICD-10 diagnosis coding accuracy and management
- Pre-bill claim check review
MDS Coding –
Section GG of the MDS was added in October 2017. Confusion remains about the best process for obtaining an accurate assessment of the resident’s USUAL performance in the first three days and last three days of their Medicare stay. The most effective approach is to have the nursing and therapy staff collaborate on coding Section GG. If the resident only performs the activity in therapy, that is the resident’s usual performance. If the resident performs the activity multiple times per day with nursing staff and only once with therapy, the resident’s performance with nursing staff best represents their usual performance.
ICD-10 Diagnosis Coding –
Section I of the MDS is dependent upon accurate ICD-10 diagnosis coding and management so that the MDS and the Medicare claim contain the same information in the same order. There are few resources for staff education for ICD-10 coding for nursing homes. Most nursing facilities do not have a professionally certified medical coder on staff. Ensure that the staff responsible for coding understands the Official Coding Guidelines as published by the CMS and NCHS.
Most clinical software used in nursing homes automatically enters the diagnosis codes onto the bill. There must be processes in place to ensure that the admitting and primary diagnoses are entered in the correct location on the bill and the coded conditions entered on the bill provide the clinical “story” that supports the amount being billed.
Pre-bill Claim Review –
Pre-bill Claim Review involves an interdisciplinary team process that starts with the draft bill or claim and validates the information on the bill as well as the supporting documentation in the resident’s medical record. When this process is conducted effectively, the facility submits a “clean claim” that is a much lower risk for audit or medical review, thus is paid quickly and accurately.
PDPM Solutions to Start Preparing Now
Pathway Health PDPM experts can assess your facility’s M-I-P systems 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.
New! Complimentary PDPM Resource
The Non-Therapy Ancillary (NTA) component of PDPM presents an opportunity to capture reimbursement for resident comorbidities and special treatments. This one-page tool is a quick reference to those items that qualify in the NTA component of PDPM. Download now>
Ready to start preparing for PDPM? Contact us.
Director of Reimbursement and Clinical Consulting,