After CMS released the Patient-Driven Payment Model (PDPM) in October 2019, skilled nursing facilities (SNFs) had little quality time to become acclimated to the new system before being overwhelmed by COVID-19. Efforts to determine how to optimally implement PDPM and adjust clinical, staffing and financial operations were replaced by a focus on stemming the spread of the disease and keeping residents and staff safe.

With occupancy at record lows, however, and a loss of $22.6 billion in revenues for 2021 projected by the American Health Care Association, now is the time for SNFs to examine processes and find areas where they may be missing out on revenues.

How Does PDPM Work?

PDPM was a major change in the structure of Medicare reimbursement for SNFs. Previously, reimbursement was based on the amount of therapy provided, incentivizing facilities to provide excessive therapy in order to maximize reimbursements. The implementation of PDPM represented a change from volume to value, and a daily reimbursement rate is now based on the underlying clinical characteristics of each individual resident.

Driving the current individual reimbursement rate are five case-mix adjusted components:

• Physical therapy (PT)
• Occupational therapy (OT)
• Speech language pathology (SLP)
• Non-therapy ancillary (NTA)
• Nursing

Under PDPM, providing comprehensive resident care has replaced SNF’s previous incentive of increasing therapy minutes. It’s a completely new way of calculating reimbursement that calls for careful management of these five areas of resident care.

PDPM Missed Opportunities

While this adjustment would have been challenging under normal circumstances, it was extraordinarily difficult for SNFs to successfully implement PDPM during a global pandemic. Among the consequences, mistakes in coding or improper documentation could result in a facility not receiving the proper payment for a resident.

Our team at Richter was given the opportunity to participate in the PDPM panel at the recent Florida Health Care Association (FHCA) conference. Among the key takeaways of the discussion was the large number of missed opportunities when it comes to maximizing revenue within PDPM, including:

1. COPD Assessments

Chronic obstructive pulmonary disease (COPD) is a chronic lung disease that obstructs airflow from the lungs. Assessing the impact of COPD on a resident involves measuring the level of airflow limitation. COPD is a diagnosis that will put you in a high PDPM category for receiving maximum per diem reimbursement. However, it’s one of the areas most neglected by SNFs when it comes to maximizing revenue.

What you need to do: Make sure that you code for COPD correctly in Minimum Data Set (MDS) and obtain the proper documentation of shortness of breath while lying flat.

2. Interim Payment Assessment (IPA)

An IPA is an optional MDS assessment that is usually performed after a change in a resident’s condition that changes the individual’s clinical characteristics. Because a resident’s characteristics drive reimbursement, performing an IPA could increase your Medicare payment. While IPAs are optional now (and you can perform as many as you want), they may eventually become mandatory at certain dollar amounts.

What you need to do: You should review each resident to look for clinical changes that could raise the rate of reimbursement and take the time to perform IPAs as often as necessary.

3. PHQ-9 Screening

A Patient Health Questionnaire Depression Module (PHQ-9) screen is used to help determine a resident’s mood state and if any interventions or referrals are needed. During the screen, a resident is asked nine yes/no questions that correspond to nine depression criteria found within the DSM-V mental health diagnostic manual. Residents are often coded as “0” because SNFs are hesitant to apply a depressed mood score. Accurately scoring the questionnaire can result in greater reimbursement.

What you need to do: Administer the PHQ-9 upon admission and follow up with additional screenings quarterly or as needed. The screening should be done in a private area and the questions asked in an empathetic manner in order to elicit answers from a resident. It’s important to be unbiased when asking and scoring the questions and to understand that it’s common for residents to have some symptoms of depression.

4. Restorative Nursing

Under PDPM, nursing is separate from therapy and has its own component. This means that after a resident has transitioned out of physical, occupational or speech therapy, they may still qualify for restorative nursing in order to maintain the functional gains made in therapy. If a resident falls into the two lowest nursing categories – Reduced Physical Function and Behavioral Cognitive Symptoms – you may be reimbursed for restorative nursing.

What you need to do: After, or in conjunction with, therapy, determine if a resident needs restorative nursing in order to improve or maintain their independence and mobility and accurately record your determination in MDS.

5. BIMS

Brief Interview for Mental Status (BIMS) is a screening tool that is used to identify a resident’s current cognitive state and determine if any interventions are needed. BIMS is a standard, scripted interview, yet many SNFs continue to perform it incorrectly. The interviewer often either deviates from the script or provides hints if they see that the resident is struggling. If the questions aren’t asked or scored precisely, or if the resident receives assistance, the results will be skewed. Most often, the results are skewed such that the scores are too high.

What you need to do: Follow the script, record scores honestly and don’t provide hints or clues. On the scale of 0-15, a score of 12 or below will result in reimbursement; thus when scores are too high you are missing out on reimbursement dollars.

 6. Medicare Part C

Medicare Part C, or Medicare Advantage Plan, is offered by private insurance companies and offers some additional benefits not offered by Medicare Part A and Part B. Medicare Part C will pay for skilled nursing care, when required, for a limited time – usually for rehabilitation residents. Reimbursement from Medicare Part C may be denied for a number of reasons, often for lack of documentation, but it’s important to remember that you have the right to appeal.

What you need to do: Make sure that you are getting necessary authorizations, uploading them to the medical record and hanging on to them for 10 years to limit the chances for a denial. If a claim is denied, it’s important to take the time to appeal.

7. Therapy Contracts

SNFs have contracts with every therapist that provides services in the facility. As time goes by, you may continue paying for contracts that have become unnecessary or overpay for expensive contracts.

What you need to do: It’s important to look at your residents’ needs and whether contracts are in their best interests. Look at therapy utilization and if it is still necessary. Finally, review all your contracts annually, and take the time to get a few bids in order to get a better rate.

The Bottom Line

In terms of profitability, it is the clinically complex residents – rather than residents needing high amounts of therapy – that now provide the most revenue. We at Richter recommend that you periodically review your PDPM processes to make sure that you are maximizing your revenue opportunities.

Richter can partner with you to perform a comprehensive PDPM audit and ensure you are capturing as much revenue as you can while still providing the best care for your residents.

Contact Richter’s Clinical Consultants

Do you have questions about PDPM, or other clinical challenges? Call Richter’s clinical consultants at 866-806-0799 or schedule a free consultation.