PDPM has been in place for nearly four years, and with it came the shift from payment based on resource utilization to payment driven by patient characteristics and service provision. PDPM presents with many nuances and complexities that open the door to sinking reimbursement when systems for thorough and vigilant clinical review and data collection falter.

PDPM consists of the following five payment components PT, OT, SLP Nursing and Non-Therapy Ancillaries. The PDPM payment rate for a resident is determined based on how the unique clinical characteristics fit into the above categories. Facilities are responsible for identifying and accurately coding them on the MDS within the required timeframes to result in appropriate reimbursement. PDPM has many nuances and complexities that may result in missed reimbursement opportunities The three top missed opportunities identified through 2023 PDPM audits include the following:

  1. Inaccurate Assignment of diagnoses and the failure to identify all comorbidities Accurate assignment of diagnosis codes is critical under PDPM. The assignment of the primary diagnosis impacts the PT/OT clinical category and the SLP CMG (if it maps to an acute neurologic category). The primary diagnosis is the identified condition chiefly responsible for the resident’s admission to the SNF or requiring Medicare skilled services. The reason for the SNF admission should be clearly noted in the medical record.  When the documentation lacks specificity to accurately assign the ICD-10 code, the facility should utilize a physician query process to obtain the clarification necessary to assign the accurate code. In addition, to accurately assigning the primary diagnosis it is important to accurately code all secondary diagnoses. Secondary diagnoses include all conditions that coexist at the time of admission, or develop subsequently, which affect the resident’s care plan and physician’s orders. Assignment of additional secondary and comorbid diagnoses impact the SLP comorbidities, Nursing and NTA qualifiers. Failure to identify and accurately code these diagnoses in section I of the MDS can result in decreased reimbursement under PDPM. In some cases, a diagnosis may need to be coded in more than one place in Section I of the MDS to obtain accurate reimbursement. For example, a resident admitted with a primary diagnosis of respiratory failure and using oxygen therapy will need to have the diagnosis coded in Section I0020B to impact the PT/OT clinical category. It will also need to be coded in the checkbox in I6300, as this, combined with the use of oxygen, will result in the special care low nursing CMG. In addition, coding this diagnosis in section I8000 will impact the NTA CMG.
  2. Selection of a less than Optimal Assessment Reference Date (ARD)
    When completing the 5-day Medicare MDS, the ARD may be any day from day 1-8, and the selection of the ARD determines the period of care and services that will be captured on the MDS. ARD Selection should be driven by the clinical status of the resident. Routinely selecting day 7 or 8 as the ARD without regard to the individual resident characteristics will likely result in decreased reimbursement under the PDPM reimbursement model.  In order to have the flexibility to enable selection of an earlier ARD requires team coordination to ensure timely data collection including the interviews and completion of functional assessments. Customizing the selection of the ARD may allow for the identification of increased clinical issues and higher resident acuity. For example, when a resident receives IV feeding and/or fluids for nutrition/hydration in the hospital prior to admission, the selection of an earlier ARD may support their coding in section K, which will have a significant impact on the nursing Case Mix Group (CMG) under PDPM. Timely receipt of the hospital documentation and communication with the MD to further clarify diagnoses is critical. In addition, there may be an increase in mood and cognitive deficits noted earlier in the stay, which will also impact reimbursement. In some cases, it may be optimal to select day 7 or 8 as the ARD may better represent the resident acuity for reimbursement. For example, a resident who receives respiratory therapy on 7 days during the observation period will achieve the special care high nursing CMG and if the ARD selected in day 5 of the stay this will not be possible.
  3. Failure to Recognize opportunity to impact reimbursement through the completion of an optional Interim Payment Assessment (IPA). If you have never completed an IPA you may be missing reimbursement opportunities under PDPM. The Medicare 5-day MDS establishes the payment rate for the entire Part A stay unless an IPA is completed. The completion of an IPA should be considered when a Medicare Part A beneficiary’s condition and/or the care and services provided change such that the current rate of reimbursement is lower than the rate supported by the timely completion of an IPA. When an IPA is completed, the newly established rate of reimbursement becomes effective on the ARD. Timely identification of circumstances that warrant the completion of an IPA is critical to ensure accurate reimbursement. Some key indicators that an IPA may be appropriate include, but are not limited to:
          • Readmitted to Medicare Part A following an interrupted stay
          • Return to Medicare Part A after an Emergency Department visit
          • New diagnosis (either Change to the Principle or an added secondary that impacts the NTA comorbidities)
          • Change in treatment that impacts either the nursing component or the NTA comorbidities and/or extensive services
          • Any residents newly placed in isolation for an active infection that meets the criteria for MDS coding as outlined in the RAI User’s Manual. This service impacts both the nursing and NTA CMGs.
          • Any resident newly started on IV medications (5 NTA points)
          • A new skin condition, such as a pressure ulcer, with associated treatment
          • New use of oxygen
          • Emergence pf a new swallowing issue documented, and/or a diet change to mechanically altered
          • Decline in cognition in a patient who was cognitively intact
          • An increase in mood indicators (mood interview)

Contact Proactive today for a PDPM check up audit and make plans to join us for these sessions of the MDS Mastermind Webinar Series: Sept. 7, 2023 Achieving PDPM Success (Part 1), Sept. 14 Achieving PDPM Success (Part 2), and Sept. 28, 2023 Preparing for the Oct. 1 2023 MDS Changes. Also, register for the upcoming full-day workshop Virtual ICD-10 CM Coding Refresher for SNFs on September 27, 2023

Written By: Christine Twombly, RN-BC, RAC-MT, RAC-MTA, HCRM, CHC
Clinical Consultant

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