Patient-Driven Payment Model (PDPM)

The Patient-Drive Payment Model (PDPM) is here, and AADNS will continue to help you through the transition. Visit this page frequently to get new information to help you lead your team and ensure that your facility thrives under PDPM.

  • Final MDS 3.0 Item Sets and Data Specifications, Plus New Specs Erratata, for Oct. 1, 2020 (7/20)

    By CMS - June 26, 2020

    In response to State Medicaid Agency and stakeholder requests, CMS has updated the MDS 3.0 item sets (version 1.17.2) and related technical data specifications.  These changes will support the calculation of PDPM payment codes on OBRA assessments when not combined with the 5-day SNF PPS assessment, specifically the OBRA comprehensive (NC) and OBRA quarterly (NQ) assessment item sets, which was not possible with item set version 1.17.1.  This will allow State Medicaid Agencies to collect and compare RUG-III/IV payment codes to PDPM ones and thereby inform their future payment models.

    The changes to the technical data specifications that support these modifications are contained in the Errata v3.00.4 which can be accessed in the file: MDS 3.0 data specs errata (v3.00.4) Final 04-30-2020 in the Downloads section below. Supporting materials including the 1.17.2 Item Change History report and the revised 1.17.2 Item Sets can be accessed in the file:  MDS 3.0 Final Item Sets v1.17.2 for October 1 2020 zip also posted in the Downloads section below.

    Please confirm with your State Medicaid Agency if your State will be requiring the calculation of the PDPM payment codes on the OBRA assessments when not combined with a 5-day SNF PPS assessment.

    June 25, 2020 update:  An updated errata (V3.00.5) was posted for the FINAL version (v3.00.1) of the MDS 3.0 Data Specifications, currently in production.  Two issues were identified.  These changes will go into production on October 1, 2020.  As a result, two edits will be revised.  These changes will facilitate calculation of PDPM HIPPS codes on OBRA assessments for states that wish to have this calculation performed. 

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  • FY 2021 SNF PPS Proposed Rule: CMS Holds Steady on the SNF QRP, SNF VBP

    By Caralyn Davis, Staff Writer - April 13, 2020

    On April 10, the Centers for Medicare & Medicaid Services (CMS) released for public inspection the Fiscal Year (FY) 2021 Proposed Rule for the Skilled Nursing Facility Prospective Payment System (SNF PPS) and Consolidated Billing (CMS-1737-P) as required by law. In a major break from recent years, CMS offers no proposals for updating the Skilled Nursing Facility Quality Reporting Program (SNF QRP) and only what the agency describes as “minor administrative proposals” related to the SNF Value-Based Purchasing (VBP) program.

    However, CMS does propose several other revisions in addition to the required Medicare Part A payment rate update. These include:

    • Multiple changes to the ICD-10-CM code mappings used for case-mix classification in the Patient-Driven Payment Model (PDPM);

    • Technical changes to the regulatory language in the Code of Federal Regulations, including a proposed change that will clarify the “practical matter” criterion of a Part A skilled level of care by removing an outdated example that referred to the repealed Part B therapy cap provision; and

    • Changes to how SNFs are identified as rural or urban for wage index classification, as well as a proposal to cap wage index decreases from FY 2020 to FY 2021 as a transition measure.

    CMS also is keeping its options open for future adjustments to the PDPM based on its ongoing monitoring efforts. Here are highlights of the FY 2021 proposed rule.

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  • FY 2021 SNF PPS Proposed Rule Released (4/20)

    By CMS - April 13, 2020

    Fiscal Year 2021 Proposed Medicare Payment and Policy Changes for Skilled Nursing Facilities (CMS-1737-P)

     

    On April 10, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule [CMS-1737-P] for Fiscal Year (FY) 2021 that updates the Medicare payment rates and the quality programs for skilled nursing facilities (SNFs). CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for skilled nursing facilities on an annual basis.  CMS recognizes that the entire healthcare system is focused on responding to the COVID-19 public health emergency. As a result, the proposed rule includes proposals required by statute and that affect Medicare payment to SNFs, as well as proposals that reduce provider burden and may help providers in the COVID-19 response.

    These updates include routine technical rate-setting updates to the SNF PPS payment rates, as well as a proposal to adopt the most recent Office of Management and Budget (OMB) statistical area delineations and apply a 5 percent cap on wage index decreases from FY 2020 to FY 2021. We are also proposing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to stakeholder feedback. Finally, this rule includes minor administrative proposals related to the SNF Value-Based Purchasing (VBP) Program, further described below.

    2019 Coronavirus (COVID-19) Outbreak:

    The health and safety of America’s patients and provider workforce in the face of the Coronavirus Disease 2019 (COVID-19) outbreak is the top priority of the Trump Administration and CMS. We are working around the clock to equip the American healthcare system with maximum flexibility to respond to the 2019 Novel Coronavirus (COVID-19) pandemic. Recently, at President Trump’s direction, CMS issued an unprecedented array of temporary regulatory waivers and new rules to equip the American healthcare system with maximum flexibility to respond to the COVID-19 pandemic, including waiving the SNF benefit’s 3-day qualifying inpatient hospital stay requirement (pursuant to section 1812(f) of the Social Security Act), which allows SNF patients to be admitted without the typically required 3-day inpatient hospital stay and additional flexibility in relation to how beneficiaries may access a new SNF benefit period without the typical 60-day “wellness” period.

    To keep up with the important work the Task Force is doing in response to COVID-19, go to Coronavirus.gov.  For information specific to CMS, please visit the Current Emergencies Website.

    While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates. This fact sheet discusses several major provisions of the proposed rule: the proposed changes to SNF payment policy under the SNF Prospective Payment System (PPS) and the SNF Value-Based Purchasing Program (VBP). This proposed rule includes proposals that would continue a commitment to shift Medicare payments from volume to value, with the continued implementation of the Patient Driven Payment Model (PDPM) and the SNF VBP, to improve program interoperability, operational quality and safety.

    CMS encourages comments on this proposed rule and will accept comments until June 9, 2020.  The proposed rule [CMS-1737-P] can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection                                                                                                  

    Strengthening Medicare

    CMS projects aggregate payments to SNFs will increase by $784 million, or 2.3 percent, for FY 2021 compared to FY 2020. This estimated increase is attributable to a 2.7 percent market basket increase factor with a 0.4 percentage point reduction for multifactor productivity adjustment. 

    As amended by section 4432 of the Balanced Budget Act of 1997 (BBA 1997) (Pub. L. 105-33, enacted on August 5, 1997), section 1888(e) of the Social Security Act (the Act) provides for the implementation of a PPS for SNFs.  This methodology uses prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services defined in section 1888(e)(2)(A) of the Social Security Act.  The SNF PPS is effective for cost reporting periods beginning on or after July 1, 1998, and covers all costs of furnishing covered SNF services (routine, ancillary, and capital related costs) other than costs excluded under the statute, such as costs associated with approved educational activities and bad debts.

    Changes in SNF PPS Wage Index

    Under section 1888(e)(4)(G)(ii) of the Act, we adjust the federal rates to account for differences in area wage levels. We proposed to adopt revised geographic delineations provided by the Office of Management and Budget, which are used to identify a provider’s status as an urban or rural facility and to calculate the wage index and apply a 5 percent cap to wage index decreases.

    Updates to PDPM Clinical Diagnosis Mappings

    CMS’ Patient Driven Payment Model (PDPM) is an innovative and historic change in how we pay for care that is more focused on patient characteristics, rather than volume, under the SNF PPS and is used for classifying patients in a covered Medicare Part A SNF stay into case-mix groups.  Implemented on October 1, 2019, PDPM utilizes International Classification of Diseases, Version 10 (ICD-10) codes to classify SNF patients into payment groups. Each year, CMS considers recommendations from stakeholders on changes to the ICD-10 code mappings used under the PDPM. In this proposed rule, we are proposing changes to the ICD-10 code mappings that would be effective beginning in FY 2021, in response to these stakeholder recommendations. We encourage stakeholders to continue to provide this essential feedback on the ICD-10 code mappings, so that we may continue to improve and refine our payment methodology.

    SNF Value-Based Purchasing (VBP) Program

    The SNF VBP Program began distributing SNFs with incentive payments on October 1, 2018.  The SNF VBP Program scores SNFs on a single all-cause claims-based measure of hospital readmissions, as required by law, and adjusts Medicare Part A fee-for-service (FFS) payments under the SNF Prospective Payment System (PPS).  The Program aims to improve quality of care by incentivizing SNFs to reduce unplanned hospital readmissions. The law requires that CMS reduce SNFs’ Medicare Part A FFS payments by 2 percent, then redistribute between 50 to 70 percent of that reduction to SNFs as incentive payments.  Because of this legislative requirement, the Program results in Medicare savings. 

    In the FY 2021 SNF PPS proposed rule, CMS is proposing to align the SNF VBP Program regulation text at 42 CFR § 413.338 with previously finalized policies, to apply the 30-day Phase One Review and Correction deadline to the baseline period quality measure quarterly report, and to establish performance periods and performance standards for upcoming program years.  CMS is not proposing to make any changes to the measures, SNF VBP scoring policies, or payment policies.

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  • FY 2020 PDPM ICD-10 Mapping Tool and MDS Item I0020B ICD-10 Code Lookup Tool UPDATED (4/20)

    By CMS - April 01, 2020

    CMS has updated the PDPM ICD-10 Mappings File for FY 2020., as well as the I0020B Code Lookup File for FY 2020.

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  • PDPM Grouper DLL Package Revised Again--Make Sure Your Software Is Updated (3/20)

    By CMS - March 31, 2020
    A revision to the PDPM DLL Package (V1.0004 FINAL) was posted, and the previous version (V1.0003 FINAL) was removed.  This version adds support for the new ICD-10-CM code for Coronavirus, U07.1. Note that this code is ONLY in effect for assessments with target date 04-01-2020 and later.  The package contains updated test files and documentation.
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  • jRAVEN 1.7.3 Free MDS Submission Software Updated (3/20)

    By CMS - March 30, 2020

    jRAVEN (version 1.7.3) is now available for download which contains the following updates:  

    • The new COVID-19 ICD code has been added, effective 4/1/2020. In support of that this new release of jRAVEN has the following updates:

     

    MDS Validation Utility Tool (VUT) V3.3.0

    The MDS Validation Utility Tool (VUT) v3.3.0 is now available. This release is effective on April 1, 2020, and supports the addition of the new COVID-19 ICD Code. For additional information please review the associated MDS VUT ReadMe text file.

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  • CMS Addresses PDPM Claims Issue for Out-of-Sequence Claims, Will Correct in October (2/20)

    By CMS - February 26, 2020

    Colleagues—

    This message will appear in this week’s edition of MLN Connects, but we wanted to give our partners advance notice—please share with your members.

    SNF PDPM Claims Issue

    Skilled Nursing Facility (SNF) Patient Driven Payment Model (PDPM) initial claims that are processed out of sequence are not paying the correct Variable Per Diem (VPD)-adjusted rate. Also all adjustment claims are not processing correctly. Claims need to process in date of service order for each stay for the VPD to calculate correctly. We will correct this issue in October. In the interim:

    • Submit claims in sequence by waiting at least 2 weeks before billing subsequent claims
    • To adjust claims, cancel the initial claim and all subsequent claims in the SNF stay then rebill in sequential order; or, hold adjustments (when allowable) until October when they will process correctly
    • We encourage you to submit a complete bill at the time of entry

    Sincerely,

    Robin Fritter

    Director, Division of Provider Relations & Outreach

    Provider Communications Group
    Centers for Medicare & Medicaid Services

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  • Q&A: Does anyone have an IPA Policy?

    By Maureen McCarthy, BS, RN, RAC-MT, QCP-MT, DNS-MT, RAC-MTA President/CEO Celtic Consulting, LLC - February 19, 2020
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  • SNF PPS Fact Sheet From Medicare Learning Network - Revised (1/20)

    By CMS - February 03, 2020
    The basics of SNF PPS and consolidated billing.
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  • Q&A: I was inquiring on how others’ buildings are composing their PDPM meeting?

    By Ellie Barton, Director of Nursing, Potomac Valley Rehabilitation and Healthcare Center - December 04, 2019
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  • Medicare Part A: 5 Key Requirements That Haven’t Changed Under PDPM

    By Caralyn Davis, Staff Writer - October 22, 2019

    Directors of nursing services (DNSs) often take a largely hands-off approach to Medicare Part A coverage issues, says Suzy Harvey, RN-BC, RAC-CT, managing consultant at BKD in Springfield, MO. “In many facilities, DNSs more or less delegate the entire Medicare program to the MDS coordinator or the Medicare consultant. This ability to delegate is important because DNSs have such a demanding job. However, DNSs ultimately are responsible for all aspects of resident care. The MDS is a part of that, as are Part A skilled services.”

     

    Consequently, DNSs still need to provide oversight—to be a member of the Medicare Part A team and to be aware of how well facility systems work by either auditing medical records or reviewing the results of delegated audits, suggests Harvey. “A DNS who just says, ‘The MDS coordinator handles that,’ could run into unexpected problems during medical review.”

     

    “The implementation of the Patient-Driven Payment Model (PDPM) changed the payment system used for traditional Part A residents,” notes Harvey. “It did not change the coverage policies for skilled services.”

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  • Q&A: What sections of the MDS allow us to include hospital look-back?

    By Frosini Rubertino, BSN, RN, RAC-CT and AADNS - October 08, 2019
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  • 5 Ways to Benefit From Skilled Therapy Under PDPM

    By Caralyn Davis, Staff Writer - September 25, 2019

    Therapy utilization will no longer be a payment driver under the Patient-Driven Payment Model (PDPM) in the Skilled Nursing Facility Prospective Payment System (SNF PPS), but skilled therapy services still have a key role to play. Liz Barlow, RN, CRRN, RAC-CT, DNS-CT, senior director of quality for RehabCare in Louisville, KY, offers five ways that directors of nursing services (DNSs) can work with the interdisciplinary team to get the most bang for their buck with therapy:

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  • PDPM Game Plan Tool

    By AAPACN - September 25, 2019
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  • CMS Makes Direct Link Between Outcomes and Medical Review

    By Caralyn Davis, Staff Writer - September 11, 2019

    Under the Patient-Driven Payment Model (PDPM), resident outcomes will be key to avoiding medical review, said officials with the Centers for Medicare & Medicaid Services (CMS) during the August 14 Skilled Nursing Facility Quality Reporting Program (SNF QRP) training session, Patient-Driven Payment Model: What Is Changing (and What Is Not). Note: Find the session slides here.

     

    The goal of PDPM is for SNFs to provide value-driven care, said officials. “Fundamentally, it comes down to a balance. A high-value and efficient provider is one that is able to achieve high-quality outcomes at low cost.”

     

    CMS measures SNF quality of care in three main ways:

    • The SNF QRP;

    • The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) program; and

    • The Five-Star Quality Reporting System on Nursing Home Compare.

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