As our nursing home costs rise alarmingly and most states steady Medicaid reimbursement, our operations are “feeling the pinch.” Sad news of nursing homes closing down spans states from coast to coast with no end in sight.
Now, more than ever, nursing homes must be vigilant in their clinical care documentation to ensure they are reimbursed for every level of care and service they deliver. Accurate documentation is essential, as proper documentation directly impacts patient care, compliance, and facility ratings. The strategies discussed here are specifically relevant for nursing facility operators.
One of the most significant shifts in recent years has been the introduction of Medicare’s Patient-Driven Payment Model (PDPM), which provides for per diem payments based on a resident’s functional and clinical abilities at admission.
Only services covered under Medicare Part A can be reimbursed during a skilled nursing facility stay. Therefore, it is essential for nursing facility operators to understand what is included.
While PDPM began in 2019, two often overlooked components are Non-Therapy Ancillaries (NTA) and Interim Payment Assessments (IPA). These can increase your SNF operation’s revenues by hundreds of dollars per day for each resident.
Identifying NTA and when to perform an IPA can be challenging. Still, operators that closely monitor and manage their NTA and IPA processes and procedures are financially stronger than those that do not. Strategies to improve your 2024 NTA and IPA opportunities vary, but a few successful suggestions are listed below.
Improving nursing home revenues with effective PDPM strategies.
The Basics: What is the Patient-Driven Payment Model (PDPM)?
The Patient-Driven Payment Model (PDPM) is a Medicare payment system focusing on each patient’s needs and conditions rather than the volume of therapy services provided.
PDPM replaced the Resource Utilization Group (RUG) system, which previously categorized patients into a single group based on therapy minutes. In contrast, PDPM uses an individualized approach that considers each resident’s specific needs and goals.
Implemented on October 1, 2019, PDPM aims to improve the accuracy and appropriateness of Medicare payments for skilled nursing facilities (SNFs). Key policy updates and data collection periods for PDPM typically happen in July. This month is crucial for regulatory changes and reimbursement updates.
Key Components of PDPM
- Patient-Centered Care: PDPM emphasizes individualized care, aligning payments with the patient’s clinical condition and needs.
- Five Case-Mix Adjusted Components: PDPM classifies patients based on five components:
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- Physical Therapy (PT)
- Occupational Therapy (OT)
- Speech-Language Pathology (SLP)
- Nursing
- Non-therapy ancillary (NTA)
- Variable Per Diem Adjustment: Payment rates are adjusted throughout a patient’s stay to reflect changing resource needs.
- Interim Payment Assessment: An IPA can be conducted to reassess a patient’s classification when there is a significant change in the patient’s clinical condition or care needs.
Accurate patient assessments are crucial for maximizing PDPM and CMI rates.
PDPM Implementation and Management
The implementation of the Patient-Driven Payment Model (PDPM) marks a pivotal shift for skilled nursing facilities. It requires a strategic approach to both financial health and patient care.
Unlike previous models that emphasized the volume of therapy services, the driven payment model, PDPM, is designed to align reimbursement with each patient’s unique clinical characteristics, needs, and treatment goals. This patient-centered approach ensures that skilled nursing facilities are recognized and paid for providing appropriate treatment. This treatment is tailored to individual residents, rather than just focusing on the quantity of services delivered.
Successfully navigating PDPM implementation means understanding the payment groups based on patient characteristics, such as nursing, physical therapy, occupational therapy, speech-language pathology, and non-therapy ancillaries.
Each component is critical in classifying patients and determining accurate PDPM reimbursement. By focusing on each patient’s specific needs and conditions, facilities can improve payment accuracy and ensure that resources are allocated efficiently, supporting quality incentives and comprehensive care.
A key advantage of the PDPM model is its emphasis on reducing administrative burden. By streamlining documentation and focusing on the Minimum Data Set (MDS) for classifying patients, providers can dedicate more time and resources to patient care and management, rather than being bogged down by volume-driven paperwork.
This shift enhances the quality of care and promotes transparency and accountability in healthcare billing and reimbursement.
To ensure compliance and maximize the benefits of PDPM, skilled nursing facilities must stay updated on the latest CMS policies, tools, and resources. The Centers for Medicare and Medicaid Services (CMS) provide various support materials. These include fact sheets, FAQs, and training presentations. They aim to help providers implement PDPM changes effectively.
Regular staff education and training are essential to inform teams about evolving requirements, payment groups, and best practices for accurate documentation and assessment.
Under PDPM, the relationship between payment and quality measures is redefined, with payment incentives now closely tied to the delivery of high-quality, patient-driven care. By implementing PDPM changes and focusing on individualized treatment plans, providers can improve patient outcomes and financial performance.
The model’s structure under Medicare Part A ensures that facilities are reimbursed for the services provided, fostering a culture of accountability and continuous improvement.
Ultimately, PDPM’s impact on skilled nursing facilities is profound, requiring a dedicated focus on comprehensive care, accurate classification, and ongoing adaptation to policy changes. By embracing the opportunities presented by PDPM implementation, providers can enhance patient care, improve payment accuracy, and ensure their facility remains compliant and competitive in an evolving healthcare landscape.
Understanding the Case Mix Index (CMI)
The Case Mix Index (CMI) measures the complexity and resource needs of a facility’s patient population. Since the shift to PDPM, therapy service minutes have been reduced, which can impact CMI calculations and ultimately affect reimbursement rates. A higher CMI shows a more complex patient population that needs more resources. This can result in higher reimbursement rates under PDPM.
Standard Industry Strategies to Maximize PDPM and CMI Rates
1 Accurate and Comprehensive Assessments
Conduct thorough patient assessments to ensure accurate classification under PDPM’s components. Effectively utilize the Minimum Data Set (MDS) to capture the full scope of patient needs.
2 Ongoing Staff Training
Invest in regular training for your clinical and administrative staff to stay updated on PDPM guidelines and best practices for patient assessments and documentation. Using standardized and tailored content in staff training ensures ongoing education and helps maintain compliance with PDPM.
3 Utilize Technology
Implement advanced software solutions to streamline data collection, MDS submissions, patient monitoring and PDPM revenues. These tools can help facilities navigate the complexities of PDPM regulations and requirements. Tools from industry leaders like SNF Metrics are invaluable.
4 Interdisciplinary Approach
Foster collaboration among your care team. Include nurses as key members who are essential for proper documentation and compliance with PDPM. Also, involve rehabilitation specialists, nursing staff, and administrative personnel. This approach ensures holistic patient care and accurate documentation.
5 Focus on Rehabilitation
Emphasize the importance of rehabilitation and measurable patient outcomes.
Boost Your 2025 Revenues
Revisit Your NTA and IPA Processes and Procedures
Ensure all NTA classifications are included in pre-admission screening forms for accurate scoring.
Non-Therapy Assessment (NTA) Strategies
Considered the most transformative component of PDPM, the NTA “incentive” was provided when SNFs have residents with medically complex conditions. CMS realized that these patients require extra care and thus should be reimbursed at higher rates.
In one opportunity, the resident with a specific NTA condition can receive a triple reimbursement rate for this first 3 days of admission. In another opportunity, the NTA identifies multiple conditions and services as medically complex.
Points are awarded towards PDPM’s Comorbidity Score with the highest points receiving higher per-diem reimbursement. The challenge has been, these NTA opportunities are not always easily discoverable or well documented. Keeping staff trained and updated to identify these medically complex opportunities is a continuous process. Encourage your team to learn about NTA opportunities and the latest PDPM requirements to maximize reimbursement. Be diligent!
Consider reviewing these 4 opportunities with your team today:
- Ensure you have added all NTA classifications to your pre-admission screening forms. This will help remind staff what to look for, for NTA scoring purposes. Also, during morning meetings, is your team highlighting changes in residents’ conditions that may trigger a new NTA classification (thus an IPA—more on that shortly) and thus additional points.
- Are coding guidelines and requirements readily available to all staff? Clinical care and reimbursement are 100% aligned–ensure your staff is aligned as well. Particularly, are you constantly educating your team on the ICD-10 NTA Comorbidity Crosswalk?
- Is your team diligent and asking questions about NTA coding? Are they consulting with your physicians about potential NTA opportunities? One highly noted example would be if a Body Mass Index (BMI) score is noted, does it qualify for a “morbid obesity” diagnosis?
- Review your ongoing diagnosis reconciliation process to ensure diagnosis accuracy. Are your teams documenting resolved diagnoses and updating any inaccurate ones?
- Be aware of any upcoming November deadlines or compliance dates related to NTA or ROP requirements. Planning and preparation ahead of these November milestones is essential to ensure your facility remains compliant and avoids last-minute issues.
Staying proactive and closely monitoring your teams will be rewarded with improved revenues.
Interim Payment Assessment (IPA) Strategies
Considered the most transformative component of PDPM, the NTA “incentive” was provided when SNFs have residents with medically complex conditions. CMS recognized that these patients require additional care and should therefore be reimbursed at higher rates.
In one opportunity, the resident with a specific NTA condition can receive a triple reimbursement rate for this first 3 days of admission. In another opportunity, the NTA identifies multiple conditions and services as medically complex.
Points are awarded towards PDPM’s Comorbidity Score with the highest points receiving higher per-diem reimbursement. The challenge has been, these NTA opportunities are not always easily discoverable or well documented. Keeping staff trained and updated to identify these medically complex opportunities is a continuous process. Be diligent!
Consider reviewing these 4 opportunities with your team today:
- Ensure you have added all NTA classifications to your pre-admission screening forms. This will help remind staff what to look for, for NTA scoring purposes. Also, during morning meetings, is your team highlighting changes in residents’ conditions that may trigger a new NTA classification (thus an IPA—more on that shortly) and thus additional points.
- Are coding guidelines and requirements readily available to all staff? Clinical care and reimbursement are 100% aligned–ensure your staff is aligned as well. Particularly, are you constantly educating your team on the ICD-10 NTA Comorbidity Crosswalk?
- Is your team diligent and asking questions about NTA coding? Are they consulting with your physicians about potential NTA opportunities? One notable example: if a Body Mass Index (BMI) score is noted, does it qualify for a “morbid obesity” diagnosis?
- Review your ongoing diagnosis reconciliation process to ensure diagnosis accuracy. Are your teams documenting resolved diagnoses and updating any inaccurate ones?
Staying proactive and closely monitoring your teams will be rewarded with improved revenues.
Interim Payment Assessment (IPA) Strategies
This optional component of PDPM allows nursing homes to reassess the resident. While not required, an IPA should be a part of every nursing home’s PDPM strategy. As conditions change that require additional care and services, PDPM allows for a change in reimbursement as well. Residents can have multiple IPAs during their stay.
Ensuring staff is educated on the IPA process and PDPM scoring should be a part of your regular and ongoing staff education and training program.
Consider reviewing these IPA strategies with your team today:
- Almost all nursing homes now hold routine team meetings at regular intervals to review their Medicare residents’ care and PDPM scoring. If you do not have this in place, start one with the goal ensuring all Medicare residents are properly scored and your reimbursement aligns with the great care your team provides.
- Revisit your PDPM staff training program with each of your facilities. Is it consistent and ongoing? Is it well-versed in the IPA triggers and procedures? Most facilities today continue to have high staff turnover rates. With high turnover comes the increased need for regular and consistent PDPM training. Your diligence will reward you with increased revenue opportunities.
- Some facilities note the involvement of their physicians in this IPA determination process. Consider bringing them into your IPA decision-making process if you are not doing this today. It is essential that your physicians understand PDPM and its components. This includes the IPA and its relevance to revenue. Understanding these elements is crucial for the overall nursing home ecosystem.
- While not necessarily a revenue improvement opportunity, this is important for compliance and regulatory purposes. Where your teams submitted an IPA, is it well-documented as to what was occurring and why the IPA was submitted? Review your IPA documentation processes and procedures. Don’t let someone else realize your IPA decision was not carefully documented and thus possibly not warranted. Consider reviewing all resident IPA documentation during your Medicare meeting or possibly your QAPI meeting.
Conclusion
Your operation can’t afford not to perform some of the checks and opportunities presented in this report. CMS launched PDPM and all of its opportunities. The NTA and IPA are two that continue to be challenging today, but provide for potential improved revenue. Get diligent about them. Operators that do will realize additional revenues for their operation.
If you have other suggestions for improving NTA or IPA, please let me know so that we can share them with others.
- Contact: El Harris
- Email: eharris@snfmetrics.com
- SNF Metrics announces Hillel Zafir as its new CEO
At SNF Metrics, we are committed to supporting senior care facilities through innovation and technology. We support facilities with Apps and Analytics covering core components such as staffing, census, AR, managed care, pharmacy, risk management, referral management, clinical and billing. We also have a suite of PDPM tools available. For more information on our PDPM offering and other strategies to optimize your facility’s financial health, visit SNF Metrics.
