Healthcare Landscape

FY 2019 SNF PSS Proposed Rule

On April 27, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule [CMS-169P] outlining proposed FY2019 Medicare payment updates and proposed quality program changes for skilled nursing facilities.

Patient Driven Payment Model

The proposal replaces the previously proposed Resident Classification System (RCS-I) with Patient Driven Payment Model (PDPM), a payment model that is driven by five case mix groups assignments based upon resident characteristics and needs rather than the provision of therapy minutes, the primary driver for payment for RUG IV. The proposed PDPM would be effective 10/1/2019.

PDPM classifies residents into five case mix related components to the rate; Physical Therapy (PT), Occupational Therapy (OT) , Speech-Language Pathology (SLP), Nursing and Non-Therapy Ancillary (NTA). The case mix components primarily use MDS for the specific needs and characteristics for each resident.

The proposed PDPM includes 59 case mix groups. OT and PT are classified into 16 case-mix groups, SLP is classified into 12 case-mix groups, Nursing is classified into 25 case mix groups and NTA is 6 groups.

Clinical Categories are based on the primary reason for SNF and further modified into sub-groups established by identifying residents functional impairment as indicated in Section GG of the MDS. PDPM does not include cognitive function for OT and PT components.

The payment for each component would be calculated by multiplying the Case Mix Index (CMI) for the patients group first by the component federal base payment rate, then by the specific day in the variable per diem adjustment. These payments are then added together with the non-case mix rate to create the total SNF PPS per diem rate under the proposed PDPM.

PDPM uses two factors classifying OT and PT components including the clinical category and function. SLP case mix is determined by the clinical category, the presence of cognitive impairment or SLP related comorbity and whether a patient has a mechanically altered diet or swallowing disorder. PDPM has 25 nursing case-mix groups. To update the ADL score, Section GG will replace Section G to establish functional score. OT and PT will use different items and methodology than nursing from Section GG.

PDPM – Variable Per-Diem Adjustment Factors

To account for changes in resource utilization throughout the residents stay, variable per-diem adjustments to PT, OT and NTA components are proposed in PDPM.

  • For OT and PT, the adjustment variable is 1.0 for days 1-20 and declines 2% every 7 days.
  • For the NTA component, the adjustment factor is 3.00 for the first 3 days and declines to 1.00 for subsequent days.

PDPM – PPS Assessment Schedule

PDPM uses the 5-Day SNF PPS scheduled assessment to classify a resident for the entire stay. A PPS Discharge assessment would be required for each resident at the time of Part A or facility discharge.

An Interim Payment Assessment (IPA) is proposed to reclassify residents from the initial 5-Day assessment. Providers would be required to complete an IPA where the following two criteria are met:

(1) There is a change in the resident classification in at least one of the first tier classifications criteria for any of the components under the PDPM, such that the resident would be classified in a classification group that differs from that provided in the 5-Day scheduled PPS assessment, and the change in classification group results in a change of payment either in one particular payment component or in the overall payment for the resident; and

(2) The change(s) are such that the resident would not be expected to return to his/her original clinical status within a 14 day period.

The Assessment Reference Date (ARD) for the IPA would be no later than 14 days after a change in residents first tier classification criteria is identified.

Proposed PPS Assessment Schedule under PDPM

  • MDS Assesment Schedule: 5-Day Scheduled PPS Assesment
    ARD: Days 1-8
    Payment Days: All Covered Par A days until Part A discharge (Unless an IPA is completed)
  • MDS Assesment Schedule: Interim Payment Assessment
    ARD: No later than 14 days after change in residents first tier classification criteria is identified
    Payment Days: ARD of the assessment through Par A discharge (unless another IPA Assessment is complete
  • MDS Assesment Schedule: PPS Discharge Assessment
    ARD: PPS Discharge: Equal to the End Date of the Most recent Medicare Stay or End Date
    Payment Days: N/A

PDPM – Therapy Provision/Modes of Therapy

PDPM has a combined 25% limit on concurrent and group therapy for each discipline of therapy provided. When the amount of group and concurrent therapy exceeds the 25% combined limited within any given therapy discipline (PT, OT or SLP), provides would receive a non-fatal warning error on the Final Validation Report issued by the QIES ASAP system during the MDS submission process. CMS has indicated that they will closely monitor the amount and way therapy services would be delivered under PDPM as finalized in the PPS Discharge Assessment and will take action if it is discovered that the patients needs and characteristics are not apparent basis for clinical decision making under PDPM.

Therapy minutes are not calculated and ‘cut-points’ will not determine payment levels. CMS officials have noted, “The minimum therapy that should be delivered to SNF patients is the amount of therapy they need. PDPM eliminates the cut points and allows clinicians to determine the amount of therapy that people require based ono their unique needs”.

Payment Rate Changes under SNF PPS

SNF Proposed Payment Update is 2.4% for FY2019, which increases payments $850. Million to SNF. This market basket update is a result of the Bipartisan Budget Act of 2018.

SNF Quality Reporting (QRP)

Currently, all measures adopted in the SNF QRP meet the requirements and are in satisfaction of the IMPACT Act and CMS is not proposing to adopt any new measures for the SNF QRP in this proposed rule.

Request for Information – My HealthEData Initiative

In addition to payment and policy proposals, CMS is releasing a Request for Information on the possibility of revising Conditions of Participation related to interoperability as a way to increase electronic sharing of data to provider.

Public Comments

Public Comments are due to CMS on the proposed rule on June 26, 2018

Stay Connected

Sign up to receive occasional notifications about our blog posts.

By entering your email and hitting “sign up” you agree to subscribe to receive email notification about our blog. You can opt out at any time by following the instructions at the bottom of each email.