Spring is in the air.

Time to open the doors, let some fresh air in, and clean above, under and between every surface in our homes.

Spring is a season that allows my obsessive cleaning habits to become a bit more normalized. Maintenance is my general excuse when others, or the kids, ask why we have certain tasks that need to occur daily. 

Vacuuming, bathrooms, laundry that never stops, shoes not worn past the front door, trash cans emptied every evening, and made beds are required daily.  When we maintain best daily practices, the massive task of spring cleaning is much less daunting.


Similar themes should be noted in the increased audit and review activity communities and therapy teams alike are seeing with regulatory initiatives and proposed changes.

Where do your teams stand?

Do you have effective audit practices in place to be able to shift to a mode of maintenance and trending?

Are you white-glove-review ready at all times with rehab teams that have implemented audits in addition to monitoring and process improvement? 

Or are you unsure? 

If you are unaware of internal audit and review practices related to medical necessity, documentation of skill, and evidenced-based practice, now is the time to ask.

Spring is in the air, and three key recent regulatory updates we have seen as a result are below:

  1. Fiscal Year 2022 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1746)
  2. April 2021 release of CMS Program for Evaluating Payment Patterns Electronic Report (PEPPER)
  3. April addition of the Patient Driven Payment Model to the Office of Inspector General Work Plan

Fiscal Year 2022 Skilled Nursing Facility Prospective Payment System Proposed Rule 

While the proposed rule included a number of potential updates, the general, most significant changes providers will likely see in the coming years is related to the lack of budget neutrality achieved with the shift to PDPM.

The Centers for Medicare & Medicaid Services implemented PDPM with a goal to have budget neutrality. Spending was instead increased by approximately 5%, or $1.7 billion, in FY 2020.

Something must give.

As with past payment model transitions, CMS has conducted the data analysis to recalibrate the parity adjustment used to achieve budget neutrality under PDPM. 

While CMS also acknowledged that the COVID-19 public health emergency could have affected the data used to perform these analyses, CMS is seeking comment on whether any necessary adjustment should be delayed or phased in over time to provide payment stability.

Your takeaway here? CMS notes that they are reviewing our data. Therefore, as part of your internal review practices, providers should have an adequate understanding of their own data, trends and how they compare to others.  

Program for Evaluating Payment Patterns Electronic Report PEPPER

PEPPER reports were released to skilled nursing facilities on April 5. PEPPER uses national SNF claims data to identify areas within the SNF prospective payment system that could be at risk for improper Medicare payment. 

These areas are referred to as “target areas.” PEPPER is a data report that contains a single SNF’s Medicare claims data statistics (obtained from the UB-04 claims submitted to the Medicare Administrative Contractor [MAC]) for these target areas.

Additionally, an updated user manual has been developed and is helpful in navigating.

The following areas are presented for providers in the April 2021 release of PEPPER. Of note, the Q4FY20 additional focus on therapy components with functional status scores as derived from the MDS Section GG: Functional Ability and Goals (PDPM applicable areas) in the ranges from 10-23; and 24 (i.e. higher independence). This is an inverse score from prior PEPPER reports, which used MDS Section G: Functional Status and a focus on individuals with a greater level of dependence in late loss ADLs (bed mobility, transfers, eating and toileting)

Providers will benefit from review of these reports, which are intended to be used as a guide for auditing and monitoring and compare claims data over time. 

PDPM High Utilization Codes*new as of the Q4FY20 releaseN: Count of SNF claims where the first digit of the Health Insurance Prospective Payment System (HIPPS) code, representing the Physical and Occupational Therapy component, is one of the following: C, D, G, H, K, L, O, P.
D: Count of all SNF claims
20-Day Episodes of CareN: count of episodes of care ending in the report period with a LOS of 20 days
D: count of all episodes of care ending in the report period
90+ Day Episodes of CareN: count of episodes of care ending in the report period with a LOS of 90+ days
D: count of all episodes of care ending in the report period
3- to 5-Day Readmission*new as of the Q4FY19 releaseN: count of readmissions within three to five calendar days (four to six consecutive days) to the same SNF for the same beneficiary (identified using the Health Insurance Claim number) during an episode that ends during the report period
D: count of all claims associated with SNF episodes ending during the report period, excluding patient discharge status code 20 (expired) (See Appendix 1)

Your take-away here? Download your PEPPER reports! Review your trending areas with the entire interdisciplinary team and determine which metrics may warrant increased review, education, or further action. 

Office of Inspector General Work Plan

Finally, on the list is the focus at the OIG level, with skilled nursing facility reimbursement added to the OIG work plan.

As noted on the announcement:

“A skilled nursing facility (SNF) is a nursing home that provides skilled nursing care and rehabilitation services such as physical, speech, and occupational therapy to beneficiaries who need assistance after hospitalization. In October 2019, the Centers for Medicare & Medicaid Services (CMS) implemented a new payment system for determining Medicare Part A payments to SNFs. Specifically, CMS implemented the Patient Driven Payment Model (PDPM), a new case-mix classification system for classifying SNF patients in a Medicare Part A covered stay into payments groups under the SNF Prospective Payment System. Under PDPM, payment is determined by factoring in a combination of six payment components. Five of the components are case-mix adjusted and include a physical therapy component, an occupational therapy component, a speech-language pathology component, a nontherapy ancillary services component, and a nursing component. Additionally, there is a non-case-mix adjusted component to cover utilization of SNF resources that do not vary according to patient characteristics. We will determine whether Medicare payments to SNFs under PDPM complied with Medicare requirements.”

Your take-away here? Know where you are trending, understanding and appreciate your case mix areas, ensure medical necessity and skill are documented. In short: Have all of your PDPM systems in order.

In closing, spring is in the air.

After a year of being locked down in so many ways, we could use this fresh start. Use this time to purposefully review current and trending practices, and look forward to a fresh outlook in the year ahead!

Renee Kinder, MS, CCC-SLP, RAC-CT, is Executive Vice President of Clinical Services for Broad River Rehab and a 2019 APEX Award of Excellence winner in the Writing–Regular Departments & Columns category. Additionally, she serves as Gerontology Professional Development Manager for the American Speech Language Hearing Association’s (ASHA) gerontology special interest group, is a member of the University of Kentucky College of Medicine community faculty and is an advisor to the American Medical Association’s Relative Value Update Committee (RUC) Health Care Professionals Advisory Committee (HCPAC).