They say hindsight is 20/20. Most are glad to see 2020 go; it’s certainly been a challenging year. After the first full calendar year of the Patient-Driven Payment Model (PDPM), several key takeaways in terms of successful implementation strategies have become clear.

Though it is estimated that SNFs brought in an average of $200 more per day under PDPM than they would have under the former Medicare RUG-IV, 66 grouper system, a recent survey indicated that 90% of nursing home operators are currently operating at a loss or at a profit margin of less than 3%.[i] [ii] In fact, two-thirds of nursing homes revealed concerns that their facility can’t sustain another year at the current pace of operations in light of reduced census and increased COVID-related costs.

In terms of planning for the year ahead, most agree that PDPM medical review audit activity is inevitable in 2021. The bottom line still depends on accurately coding the MDS to reflect all care and service needs according to the instructions in the RAI User’s Manual. The following list includes tips to prepare for medical review and mitigate the potential risk of future PDPM overpayments and recoupments:

  1. Section GG Coding Accuracy & Routine Staff Training Are Critical
    • The accuracy of the function score (Section GG) serves double-duty, impacting two PDPM component areas. Validation under medical review to support the OT/PT and nursing components depends on the documentation to support MDS coding.
    • Review current processes. Ensure IDT systems include team documentation to support collaboration and usual performance. Keep in mind, Section GG accuracy not only has a major impact on PDPM rates, but also affects 5-Star, Quality Measures, and SNF QRP.
  2. Active Conditions in Section I must include Physician-Signed Diagnosis, and must be considered active within the 7-day lookback period
    • No one but physicians and physician extenders can diagnose; providers cannot infer a specific diagnosis because the documentation appears to support the specific condition or ICD.10-CM code.
    • The physician endorsed diagnosis is often the critical piece missing from the medical record. Providers should review (or develop) physician query processes to ensure the diagnosis is accurate, active and coded at the most specific level for the patient identified in the lookback period.
  3. Comprehensive Admission Chart Reviews Reduce the Risk of Missing Conditions and Services that Impact Reimbursement
    • The admission chart review should include more than just the hospital discharge summary. Key records to include in review are the hospital admission H&P and relevant progress notes, diagnostic reports, hospital medication and treatment records, as well as operative notes, consult reports and other documentation related to care, services, history and surgical procedures. Each of these may include relevant services and conditions impacting the need for SNF service delivery and determination of the accurate PDPM payment rate.
    • For example, are hospital MARs and ER documentation for new admits/re-admissions retrieved for the last 7 days to identify administration of IV fluids or parental feedings before establishing the ARD? Accurately coding these services plays a part in capturing the Special Care High Nursing CMG, contributing to over $200 of the daily Medicare rate.
  4. Understand Nursing Classification Criteria and Become more Familiar with NTA Comorbidities
    • Common gaps identified in documentation to support Nursing CMGs include:
      • A lack of condition application and specific interventions in the baseline or SNF care plan.
      • Insufficient information provided in skilled nursing assessments. For example, respiratory assessments often lack documentation related to SOB when lying flat for COPD patients, or documentation to support active pneumonia during the lookback period noting sign/symptoms and response to ATB, etc.
    • 50 conditions and extensive services can contribute NTA points. Common areas that are vulnerable for payment impact include:
      • Physician support for active conditions (e.g., malnutrition). Tip: involve the dietician early to allow time for physician query when necessary.
      • Lack of a process to identify BMI > 40 in the look-back period. Tip: 5 of the 7 allowable ICD.10-CM codes that qualify a resident for morbid obesity do not require physician-documented support.
      • Understanding conditions required at MDS section I8000 to qualify for the NTA capture. Tip: If Respiratory Failure is the primary skilling diagnosis reported at I0020B, the ICD-10-CM code must also be reported at I8000 in order to capture the associated 1 NTA point.
  1. Reinforce Interview RAI Techniques & Guidance
    • Staff who are conducting interviews should follow guidance in Appendix D of the RAI, Interviewing to Increase Resident Voice. This guidance should be reviewed routinely, along with Steps for Assessment for conducting the PHQ-9. This is important as, on average, indicators of moderate to severe depression (total severity score = ≥10) identified though the PHQ-9© will increase the daily PDPM reimbursement by approximately $38.00 per PPS day in order to provide the care and services these residents require.
    • Providers should also review internal processes for ensuring timely BIMS completion and for compliance with signing Section Z0400. According to RAI coding instructions (pg. Z-5), “if a staff member cannot sign Z0400 on the same day that he or she completed a section or portion of a section, when the staff member signs, use the date the item originally was completed.” Payment implications apply in circumstances where the patient presents with a mild cognitive impairment.
  2. Collaborate routinely with the Speech-Language Pathologist
    • The SLP is an expert in swallowing disorders reported in Section K, and assessing the four phases of swallowing (oral prep, oral, pharyngeal, and esophageal). Coding opportunities may be missed when there is insufficient record review, or a lack of understanding of the SLP “jargon” found in the documentation. Training and team collaboration are a must.
    • Reporting of SLP comorbidities should include a review of rehab documentation. Tip: Assess whether the physician signature is present on the therapy plan of care in the lookback period. Consider whether the care plan and medical record show that these diagnoses were active during the observation period?
  3. Skilled Nursing Documentation Training
    • Skilling COVID patients using Section 1135 and Section 1812(f) Waivers during the PHE has worried some providers with limited experience basing the skilled stay on skilled nursing services alone.
    • Providers should engage in routine education and training focused on supporting the need for daily skilled nursing services and strategies for defensive documentation that justifies that need.
  4. Establish Internal Auditing & Monitoring Systems for High-Risk Areas
    • Providers should monitor coding trends and assess marked changes that indicate a significant alteration in coding conditions or services from pre-PDPM to post-PDPM.
    • Consider the benefits of systematic internal audit practices as part of your ongoing MDS review process before the MDS nurse signs the assessment as complete, potentially eliminating duplicative efforts during the labor-intensive triple check process at end of month.
  5. Rehab Documentation Quality Assurance Reviews
    • The greatest reason for SNF care continues to be skilled rehabilitation services. The need to substantiate the full duration of reasonable and necessary therapy services should remain a key factor addressed in QA documentation reviews.
  6. Medical Review Prep
    • The temporary pause in Medical Review has ceased. Prepare now for PDPM ADR management. Consider establishing a checklist in the closed chart to assist in locating documentation to support PDPM MDS coding.
    • Establish a medical review response team to include key members with PDPM reimbursement knowledge to ensure pertinent records such as documentation specific to Section GG support and hospital documentation are included in the packet submitted to the review entity.

In 2021, the accuracy of coding, documentation and data monitoring is more vital than ever before.  Provider data outliers will continue to trigger audits, and any coding that drives payment, or supports skilled services on the MDS will potentially be reviewed. Inadequate documentation will result in denials with a direct impact to your bottom line.

Proactive’s experts offer remote audit solutions for coding and documentation compliance and reimbursement accuracy. Contact us today to learn more about our quality assurance audits or for information on Medical Review support services including ADR preparation and Appeals management.


[i] Zimmet, Marc Happy ThankSNFing November 2020,

[ii] AHCA-NCAL, State of Nursing Home Industry: Facing Finanical Crisis and Staffing Challenges, State-of-Nursing-Home-Industry_Dec2020.pdf  


Blog by Stacy Baker, OTR/L, RAC-CT, CHC, Proactive Medical Review

Click here to learn more about Stacy and the rest of the Proactive team.