With the future of the Patient Driven Payment Model, at least as it’s currently constructed, up in the air, now is the time for providers to ensure they are accurately capturing resident needs and acuity so they don’t miss out on reimbursement opportunities.
“[The Centers for Medicare & Medicaid Services] took on a huge initiative to implement PDPM because they felt that providers were gaming the RUGs system,” Colleen Muncy, founding partner of data analytics firm StarPro, recently told McKnight’s Long-Term Care News.
“Ironically, if CMS would have taken the time to better assess how the population that was being cared for in nursing homes had significantly changed over the past 20 years, they would have realized how ridiculous the budget-neutral prediction was to begin with,” Muncy added.
Muncy was one of several key stakeholders who provided their views of the payment model around its second anniversary. PDPM went into effect Oct. 1, 2019, and was the biggest change to the nursing home reimbursement system in at least a generation.
CMS in awkward position
Two years later, CMS is now considering changing the model after it found aggregate spending under PDPM unintentionally increased by 5.3%, or $1.7 billion, when compared to what it would have paid to SNFs under the old RUG-IV model.
Although government officials later conceded those calculations might have been higher than appropriate, it is still widely believed pay rates will be trimmed in the future. Any changes to PDPM reimbursements, however, won’t come before next year’s (FY 2023) SNF PPS proposed rule.
Muncy explained that “it’s no secret” most homes welcomed to switch to PDPM because the new system recognizes and reimburses providers for the highly complex patients they had been caring for all along.
“If [nursing] homes are caring for residents’ needs based on CMS’ own requirements for complex medical needs, co-morbidities & ADL status and have the accurate documentation to prove it within the reimbursement guidelines, what does budget neutral have to do with anything?” she questioned.
Muncy added that there are providers who figured out “how to game the system” — which is true with any industry, she said — but “penalizing the entire industry with payment reductions discourages the good operators who are focusing on delivering high quality of care and deserve to get paid for the good care they provide.”
“CMS is in an awkward position, so they are using nationally blended data at a high level to try and demonstrate widespread fraudulent behavior,” Muncy explained.
Documentation will be key
As of now, providers’ biggest concerns about PDPM moving forward should be documentation supporting services provided and the level of care needed for patients, and proof of achieving desired patient outcomes, according to Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care.
“In general, PDPM’s heart is in the right place,” Morton told McKnight’s. “Overall, I think PDPM was quite fortuitous for the pandemic – reimbursement and the statistical link to acuity and reimbursement seemed much more aligned under PDPM for the pandemic than it would have been under RUGs.”
Morton added that the delay of the proposed parity adjustment this year was appropriate since the COVID-19 pandemic changed provider caseload and costs in a manner that made it impossible to compare the reimbursement models.
“Unfortunately, it would be really difficult to make any adjustments to PDPM at this moment as all, or nearly all of our data around PDPM has been skewed,” she explained “Real data, under ‘normal’ circumstances is needed to make any adjustments, updates, changes to the reimbursement model.”
What should happen is a delay of changes to allow cleaner data so that adjustments are not skewed by the pandemic, Morton urged.
“Providers can become more successful with increased training of staff to accommodate higher levels of acute patients, added accommodations such as private rooms and trach or vent services, and improved EMR data entry for front line staff to allow proper capturing and coding,” she said.
Leah Klusch, executive director of the Alliance Training Center, added that she’s optimistic that operators will recognize the needs for accurate and reproducible data to be able to respond to CMS oversight.
“This is such a stressful time with staffing issues and increased clinical needs that the MDS process needs to be evaluated and supported as well,” Klusch said. “Senior managers need to determine the data process is important. If that can happen I am cautiously optimistic at this point.”
This is the second in a two-part series about the Patient Driven Payment Model. The first story can be found here.
