Federal regulators are weighing changes to the three-year-old Patient Driven Payment Model to account for missed opportunities — and potentially inappropriate coding choices — a top Medicare official said Friday.
John Kane, a Centers for Medicare & Medicaid Services SNF team lead who handles payment policy, raised the issue during a presentation at a national conference for nursing home nurses and assessment professionals in Las Vegas.
“PDPM was never intended to be a finished product,” Kane told members of the American Association of Post-Acute Nursing. “It was supposed to evolve, just as things like the MDS do.”
Addressing weaknesses in the 2019 model was challenging in the two years after COVID took hold in the nation’s nursing homes, Kane said. But CMS officials are now convinced they have valid data to inform their approach to refining PDPM.
The good news for providers: Kane sees increases in the use of certain codes not as gaming the system, but as a sign that the new model accurately captures what is driving patient care. PDPM shifted payment away from a focus on rehab therapy to one that pays for patients’ individual needs across five categories that address nursing demands and comorbidities.
Kane pointed to increased diagnosis of depression, malnutrition and swallowing disorders as examples of trends the agency can study to identify how to make the payment system more accurate.
“There are a variety of metrics that have stabilized since PDPM implementation and didn’t seem to vary in any way due to the COVID-19 public health emergency,” Kane said. “There are things that we can absolutely know — maybe not the full extent or magnitude — but things that were connected to the implementation of PDPM.”
Therapy minutes also declined by about 33% immediately after PDPM launched. Therapy didn’t drop by more after that and Kane said the immediateness and non-variability of that change showed it was due to an intentional change related to PDPM.
But he eschewed “cynical” explanations that such changes were just about following the money under PDPM.
“What this is showing us, particularly in cases of depression … is it’s not a response necessarily to PDPM incentives,” he said. “Its’a response to the fact that PDPM incentives bright forth these things that were already happening. That percentage of stays with depression always existed, but wasn’t being reported properly. And I do believe that.
“When we talk about payment and we talk about trying to understand what this means for PDPM payment, we try to understand what these different data points, these different trends, these different narratives tell us about what we should be doing about PDPM payment.”
These changes would be outside of the current clawback meant to bring payment parity to the new system. The fiscal 2024 pay rule proposes a clawback reduction of 2.3% to make up for overall, unintended increases since PDPM launched. It is the second and final year of the reset.
Non-therapy ancillaries in focus
But Kane envisions other changes that look at specific, diagnosis-related tweaks that could affect coding and reimbursement. CMS might look at the non-therapy ancillary category, for instance, which reimburses providers for addressing patients’ comorbidities by assigning specific conditions higher point values.
“We have found over time that the NTA cost has gone down,” Kane said, noting that the number of stays with and payments for malnutrition has increased during that same period. “Why is it that we’re noticing a decrease in cost but increasing acuity? We see the same things when we look at things like [speech language] comorbidities … and percentage of stays with cognitive impairments.”
The decrease in per-patient cost reflects that more patients overall are receiving certain care.
For example, providers might only have documented patients with severe and more costly malnutrition issues under the previous payment system; now that they’re being asked to capture all patients with malnutrition, some whose conditions cost less to treat could be bringing down average per-patient costs. About one-third of stays are now including malnutrition, Kane noted.
“What should that tell us and where should we go from here?” Kane asked. “Should we be reevaluating what NTA comorbidities we use?
“Maybe malnutrition is not one we should look at,” he added. “Maybe there are other ones on that list that we should not look at. Maybe there are other ones on that list that maybe there are other ones on that list that we should have been paying for.”
One audience member pointed out that providers could use more ICD-10 diagnosis codes for speech language because the current system misses some opportunities for providers to capture payment for care they are providing.
Kane said CMS might need to review its non-therapy ancillary table more often, but other changes could also be in the offing. He called on nurse assessment professionals to start a dialogue with CMS, which would need to make changes to SNF cost-reporting requirements and audit that information to get a better understanding of payment drivers.
“How can we address this apparent discrepancy between payment and cost?” he asked. “How do we reset the system based on the existing data in a way that doesn’t adversely affect patient care, patient outcomes, or payment accuracy?”
