Providers need more time before the Centers for Medicare & Medicaid Services would implement any adjustments to PDPM payment rates, operators and associations have told the agency in official comments.
Federal officials this spring proposed adjusting the parity rates after skilled nursing facilities collected $1.7 billion, or 5%, more than expected in Medicare payments in the first year of the Patient Driven Payment Model. The model was intended to be budget neutral, but it launched just months before the pandemic began and healthcare costs skyrocketed.
A review of more than 200 entries received and published in the Federal Register as of Tuesday finds that most providers are asking for a delayed implementation of any cutbacks. Also, many are asking that the agency reconsider making any adjustment at all given the financial impact of COVID-19 and the prevalence of higher-need patients over the last year. Providers argue those high-need patients justified higher reimbursements, accounting for the 5% increase.
PrestigeCare, a Washington-based operator of 79 skilled nursing and senior living facilities across the U.S., said it incurred $7 million in personal protective equipment costs and spent another $24 million on additional staffing expenses due to COVID-19.
“The pandemic has profoundly and permanently impacted how we provide care and the costs to provide care to residents regardless of a COVID-positive diagnosis,” an attorney for the company wrote. “Many of these additional costs will be permanent due to changes in patient care (and) infection control. Without a fair and predictable SNF PPS payment rate going forward, it will be difficult, if not impossible, to provide the high-quality care that CMS expects while also improving our care delivery processes.”
Some providers noted in their comments that CMS did not fully capture all the ways COVID-19 drove up costs, nor how it impacted patient acuity. While many praised PDPM’s ability to capture patient needs accurately, they noted that it wasn’t just COVID-positive patients increasing costs.
In his comments, Chris Chirumbolo, CEO of Ohio-based Carespring Health Care Management, said patients who were treated and recovered from COVID “presented more complexity than can be fully captured through PDPM.” Excluding pandemic expenses, the average per-patient cost remained the same from 2019 to 2020, he said. But in the first quarter of 2021, he noted that costs increased by $30 per-patient day.
“Based on these facts, we request CMS to approve the full market basket index within the MPPR adjustment and cancel plans for the 5% PDPM ‘correction’ for FY 2022,” Chirumbolo wrote. “Many of these additional costs will continue to be incurred by SNF providers for a sustained period due to changes in patient care delivery, infection control, reporting requirements, and other necessary costs.”
One reimbursement analyst told McKnight’s that a CMS case-mix recalibration could translate to a $12 per patient, pre-day loss for providers.
That could be devastating, said commenters, noting mounting, non-reimbursed expenses for items including air filtration systems, surveillance testing and additional staffing costs associated with the pandemic, as well as ongoing federal mitigation efforts.
Gliding toward implementation
Their concerns echoed those raised by the American Health Care Association/National Center for Assisted Living in an unofficial comment letter sent to acting CMS administrator Elizabeth Richter on May 21.
AHCA is working with Avalere Health to evaluate implications of the proposed, 5% parity adjustment and conducting an analysis of Minimum Data Set elements to specifically determine “whether all patients impacted by the COVID-19 public health emergency may have had claim rates affected by other one-time factors that were unrelated to the design of the PDPM case-mix model.”
AHCA leaders argued that CMS’ use of claims data in its analysis may not have captured all beneficiaries with COVID-19 ICD-10 codes. SNF residents who became COVID-19 positive and symptomatic during a Part A stay would have been reported on interim-payment assessments, and their inclusion in the CMS calculations could be one factor making the PDPM payments appear unintentionally higher.
If so, AHCA expects to ask CMS to remove such patient data from its analysis before finalizing the parity adjustment. AHCA has yet to submit its final comment; those are due by Monday (June 7).
AHCA has called for “a glide path” that would delay the application of the parity adjustment for at least one year and then phase it in annually with a maximum annual reduction of 1%.
“This approach recognizes the dire financial situation our members and other SNF providers continue to face as a result of the ongoing pandemic,” AHCA President and CEO Mark Parkinson wrote. “In 2020, nursing homes spent roughly $30 billion on personal protective equipment (PPE) and additional staffing alone…. As you have shared with us, these universal expenses applicable to caring for all patients are not adequately accounted for in the PDPM.”
Providers and their representatives from Baltimore to Arizona likewise requested CMS use a blended approach.
“With our members still reeling from the impacts of COVID, this is a decidedly wrong time to introduce significant rate reductions,” wrote a provider organization from South Dakota. “Such a policy at this time would erect a barrier to providing the high quality of care Medicare beneficiaries expect and deserve.”
