In less than 30 days, the long-term care industry will open for business under the most fundamental change to nursing home reimbursement since the prospective payment system was introduced 20-plus years ago.

At the heart of the new Patient-Driven Payment Model (PDPM) is a comprehensive revision to the Resident Assessment Instrument (RAI), the set of rules upon which Medicare and Medicaid reimbursement decisions are made.

How the rules are changing, and how skilled nursing facilities can maximize reimbursement under this new payment system, have been the focus of hundreds of webinars and white papers over the last two years. On October 1, the new era begins.

RAI manual changes

The significance of the latest version of the manual (v1.17), which nursing homes first saw in late May, is the sheer number of changes to reimbursement rules. A list of them occupies 117 of the latest manual’s 1,300 pages.

Still, as expert observers note, the really salient changes beginning Oct. 1 can be counted on one hand. While the manual will introduce new assessment formats to learn, fewer assessments are now required. CMS has touted a “lower administrative burden” as a key benefit under PDPM by dropping the number of assessments to just two during the entire course of a resident’s stay, admission and discharge, unless special circumstances occur.

While many view the change as a mixed blessing, fewer assessments mean fewer chances to fix mistakes and more chances to be saddled with a resulting under-reimbursement. The pressure to accurately assess and code each resident is much greater, and there will be certain financial perks for getting things correct, right from the start. 

There is a third, optional assessment, the interim payment assessment, or IPA, which could tweak the reimbursement rate, should providers choose to pursue it.

Accurate coding under Section GG, a big new part of the MDS data collection process, will reflect the elder’s function performance at the time of admission and at the time of discharge.

“Accurate coding of Section GG is, by necessity, a collaboration between therapy and nursing,” observes Karolee Alexander, RN, RAC-CT, director of clinical and reimbursement consulting for Pathway Health.

“Under RUG-IV [PDPM’s predecessor], we have often overlooked the nursing component because it hasn’t mattered, as long as you have your rehab and ADL scores,” notes Jim Shearon, vice president of clinical solutions for Real Time Medical Systems. “In the PDPM model, the nursing component will matter every single time.”

Coding accuracy

Jessie McGill, RN, curriculum development specialist for the American Association of Nurse Assessment Coordination, points out the changes in ICD-10 case-mix codes (I0020b) used for the primary diagnosis in the initial assessment and the range of codes (J2100-J5000) indicating “major” surgical procedure during an inpatient stay just prior to admission will be essential to get right. As McGill states, key RAI manual chapters to bone up on include Chapter 2, which clarifies the PPS assessment schedule under PDPM and provides additional definition and guidance regarding the new interrupted stay policy and the IPA, and Chapter 6, “the go-to section for Medicare SNF PPS reimbursement.”

To capture therapy delivery information over the course of a patient’s entire Medicare Part A stay, as it relates to the concurrent and group therapy limit under PDPM, CMS added items providers will report in terms of the amount of therapy minutes received by the patient, says Patricia Howell, RN BSN, WCC, CFCS, clinical support manager for McKesson Medical-Surgical. 

“If the total amount of group/concurrent minutes combined comprise more than 25 percent of the total amount of therapy for that discipline, a warning message will be issued on the final validation report,” she adds.

Section GG impact

The most prominent role of Section GG is data mining, centered heavily on the functional status of assessed residents at the beginning and end of their stay. 

“Per the RAI Manual, Section GG is intended to reflect baseline, usual function for a resident over the three-day lookback period — not the highest level of performance and not the lowest level,” notes Kathleen Weissberg, MS, OTD, OTR/L, CMDCP, CDP, education director at Select Rehabilitation.

Howell says the scoring methodology for the items used in calculating the GG-based functional score is reversed from the methodology used for the section G-based functional score. “Under Section G, increasing score means increasing dependence,” she says. “Under Section GG, increasing score means increasing independence.”

McGill adds that Section GG is pivotal in the payment process: “Section GG now has multifaceted potential to impact Medicare reimbursement — with one function score being used for the physical therapy and occupational therapy component and another for the nursing component. And [providers] risk having a two-percent reduction to their annual payment update (APU) for an entire fiscal year if they fail to submit eighty percent of the required Section GG data for the SNF Quality Reporting Program (QRP).” 

Perhaps even more significantly, McGill adds, the four Section GG outcome measures are slated to be publicly reported on Nursing Home Compare in calendar year 2020, “giving more opportunity for consumers to see and use section GG outcome data to make referral and admission decisions, all of which can impact the bottom line.”

Keeping tabs on mobility

Functional scoring will be an important exercise in the overall documentation and billing going forward.

“The function scores are based on responses in Section GG, and as a result, the importance of Section GG can’t be overstated,” says Jayne Warwick, director of market insights for PointClickCare, noting how the emerging PDPM system removes ADL scores in favor of functional scores to drive reimbursement.

“The functional score derived from questions in section GG of the MDS has been catapulted to the forefront of the calculation of PDPM reimbursement,” says Jennifer Leatherbarrow, RN BSN, RAC-CT, IPCO, QCP, CIC, manager of clinical consulting for Richter Healthcare Consultants. In fact, the functional score is used in the calculation of three of the PDPM component case-mix groupings.

Mobility is a significant part of Section GG; MDS items represent about two-thirds of its entire content.

“There is a lot of specific coding and assessment activity around mobility required in Section GG,” says Leah Klusch, RN, BSN, FACHCA, the executive director of The Alliance Training Center, an educational foundation focused on geriatric care and coding issues.

“We will need to coordinate more around how we are looking at the elder’s mobility between nursing and therapy. Nursing has many more clinical requirements for documentation than the current system. Therefore, therapy and nursing have to be on the same page when they are documenting mobility,” she says.

Some advice on coding

As Jacklyn Brown, a clinical consultant for Richter Healthcare Consultants, notes in a recent blog, many ICD-10 diagnosis codes will trigger a “return to provider” status on claims if selected as the primary diagnosis. This includes “diagnosis codes that lack specificity, as well as some commonly used treatment diagnoses,” Brown adds.

To illustrate then and now, consider how Shearon describes the change:

“Since the implementation of Section GG in October 2016, providers have focused on making sure that the Section GG items that impact the 80% compliance threshold for the SNF QRP are coded, but they often haven’t paid much attention to the quality of the data being submitted,” he says.

To maximize on all of the changes in Section GG, experts advise the following:


“Providers often struggle to gather the assessment data needed for accurate coding,” says Shearon. “The best practice is an interdisciplinary approach — morning meeting/stand up — where you obtain information from therapy and the nursing staff, and then have a conversation with the resident and the family members.” 

This includes the residents themselves.

“The RAI process was designed to be interdisciplinary, yet we often conduct discipline-specific assessments in silos,” notes Alexander. “The RAI manual directs us to consider information directly from the resident as well as documented information from staff. We often overlook the resident as an important source of information.”

Qualified staff

As Shearon observes, even a prior version of the RAI manual updated the Section GG coding guidance more than 20 times in order to emphasize that the clinician making coding decisions definitely should be “qualified. Providers need to make sure that a qualified clinician who meets those laws and regulations pulls together all of the information and makes the final ‘pen to paper’ coding decisions.”