United States

Senior Living Health Care Connection: New Patient-Driven Payment Model


On April 27, 2018, Centers for Medicare & Medicaid Services (CMS) proposed a new Medicare reimbursement system that will change the model payment system RCS-1 that was scheduled to replace the currently used prospective payment system (PPS). The new model also looks at total resident care, particularly nontherapy ancillaries, to determine Medicare payments. This new patient-driven payment model (PDPM) is more closely aligned with the skilled nursing facility (SNF) quality reporting system and is scheduled to take effect fiscal year 2020 (Oct. 1, 2019) if the rule is finalized.

Classification of SNF residents into one of 10 PDPM clinical categories uses ICD-10 diagnosis codes and procedural codes. If there is no qualifying inpatient hospital procedure then that resident is classified into the default clinical category primarily based on ICD-10 care management (CM) codes. After the clinical category is assigned and the resident experiences a hospital procedure, the clinical category will then be modified to a specific related surgical procedure that was performed in the hospital stay immediately preceding the SNF admission. SNF staff would have to refer to the hospital information to augment the resident’s clinical category classification. The ICD-10 CM and personal care services codes are recorded in item I8000 of the minimum data set (MDS) assessments to determine payment.

Other responses to the certain MDS questions that will affect payment include placement into extensive services, the PDPM function scores found in section GG and responses to questions regarding cognitive patterns, certain swallowing disorders and nutritional needs. In addition, responses in the MDS include approaches to questions regarding speech language pathology comorbidities and nontherapy comorbidities, as well as MDS responses to resident mood, restorative nursing services plus the amount of skilled therapy provided. These responses are all included in the new payment methodology.

Also expected in the fiscal year 2019 final rule is a 2.4 percent market basket increase due to go into effect on Oct. 1, 2018, adding $850 million to SNF payments. We will keep you updated on any changes or updates.

Questions? Contact Joan McCarthy at +1 312 634 3479.

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